$150 billion in aid for top insurer AIG
The U.S. government is bailing out insurance giant AIG again -- the Treasury Department announced it will buy preferred stock in AIG.
The Federal Reserve and the U.S. Treasury Department announced that AIG will receive another $140 billion dollars, which brings their rescue package to $150 billion.
Mary Williams Walsh, financial reporter for the "New York Times" is on "The Takeaway" to explain the AIG bailout: "It's a pretty amazing situation. They insured bonds ... a very, very complicated type of bond -- it's called a CDO -- and they insure them not with normal insurance policies like you and I would buy on our house or on a car, but with derivatives. And the derivatives ... is not regulated the way insurance normally would be; and so they sold a huge, huge book of business without really the kind of oversight that you would expect that would keep an insurance company from getting over its head."
Walsh says AIG is so woven into the economic system that the failure of insurance giant will cause the failure of many other financial institutions.
"Freakonomics" author Steven Dubner says the AIG bailout sends a signal that the government is trying to fix a big economic problem: "Also don't forget, the people writing the checks are going to change in a little while ... so you've got Obama right now assembling a very different kind economic team than Bush has had."
"The Takeaway" is PRI's new national morning news program, delivering the news and analysis you need to catch up, start your day, and prepare for what’s ahead. The show is a co-production of WNYC and PRI, in editorial collaboration with the BBC, The New York Times Radio, and WGBH.
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