not_disinterested

Why Would Treasury Cut AIG's Interest Payment?

AIG cannot sell its business units in this market to pay off the loan, as the Fed and AIG expected. And no the Fed does not have an "unlimited source of equity" - all they have is a printing press, which if used in an "unlimited" fashion, can result only in "unlimited" inflation. So the Fed has to change terms or face AIG's bankruptcy, which taxpayers should rightly howl over in indignation

How AIG Failed

my understanding is that the the mark-to-market rule (FASB 157?) that required the write-downs was put in effect several years *after* Groton's analysis.

the authorization for the rule was claimed under the Sarb-Ox act - the draconian, life-sucking law that is, imho, partly responsible for the current meltdown