Rigged

AIG: The Fed Is a Really Bad Trader

"Now comes the part where the Fed makes a really bad trade for itself (and for the taxpayers) in its effort to bend over backwards to protect the banks. Under the terms being offered, the Fed will purchase these CDOs (which are worth who-knows-what on the dollar) at par value! And here's the kicker; according to the WSJ the banks get to keep the collateral AIG had to post, much of which came when the government made funds available to AIG in September!!"

Could you have misinterpreted the information above? Maybe it should be "the banks get to keep the colleteral AIG had to post and with them getting 50 cents on the dollar they are made whole = par?" Otherwise, you seem to imply that the banks will get "par" plus collateral which would not make any sense at all.