Someone Please Kill AIG

Good scoop by the WSJ publishing a partial list of AIG CDS counterparties.  They also give a succint and clear description of the magnitude of the CDS problem.  Naturally, the counterparties on the AIG CDS contracts received funneled payments of roughly $50 billion from the federal AIG bailout funds.   It's the usual suspects, including Goldman, B of A, Deustche Bank, Merrill, Barclays etc.  European financial institutions  had large exposures.  The fear of course is that not bailing out AIG on its insurance contract obligations will force all their counterparties to book the losses on their toxic transactions that AIG sold them insurance on.  As long as the counterparties had a good faith belief that AIG would make an insurance payout on their financial transaction they didn't need to book it as a loss.  But those days are over and the government(s) need to force everyone to book their losses, letting the weak die and saving the strongest by whatever means necessary.  Not bailing AIG out when it was about to collapse last fall would probably have been a bad idea, but the time has come to stop propping up this stinking international heap of greed and shortsightedness. 

How much taxpayer money are we going to shovel into this piece of shit insurance company before we take it out back and shoot it?  Really.  The federal government is posting cash collateral to AIG's counterparties?  Why bother with the middleman AIG?   We already pissed away $173 billion dollars into AIG's bottomless pit.   And Citigroup?  A penny stock.   I voted for Obama and all but Krugman is right:  the administration's economic dithering and weak kneed fantasies of private/public cooperation lifting us out of this apocalypse instead of the bullet to the head of nationalization and good old fashioned bankruptcy (and why are they so averse to bankruptcy? all their "too big to fail" policies do is delay it at a higher cost) are fatally naive.  May I eat my words.