Basil Poledouris ~ Hymn to Red October
Now it’s no longer just a rumor. The US Fed is bailing out American International Group with an $85-billion package (you read that right). Apparently, AIG is indeed too big to fail. I tried to camp out of Philamlife chief Joey L. Cuisia’s office this morning (well, I really meant sit really demurely in the lobby) just in case he has time to talk to a lowly journalist.
Understandably, however, he was up to his ears with teleconferences and board meetings with this new development, but I’m on call the whole day. Some thoughts that come to mind: Wall Street’s latest convulsions show there might be more casualties out there and all that’s part of the restructuring happening in financial markets. I’ve heard the phrase “the market corrects itself” too many times that it hardly means anything anymore.
Now, I think the great white economists might not be speaking in tongues, after all. Second, does AIG’s case reinforce the principle to “go big” when you’re choosing financial products to buy? Certainly, in this case its size saved it, but I’m not yet sure what that means on the regulatory side. The debate is heating up in Wall Street on whether this is the dumbest or the smartest move made by the Fed.
