AIG qualifies for bailout
The Treasury Department and Federal Reserve drew the line at bailing out Lehman Brothers, but the world’s biggest insurance company was another matter.
Bear Stearns was bailed out, along with Freddie and Fannie, while Lehman Brothers was allowed to fail. But with a trillion dollars in assets, American International Group turns out to be big enough to threaten the global economy, moving the Federal Reserved to agree to what the "New York Times" calls "the most radical intervention in private business in the central bank’s history."
The insurance company does business all over the world, insuring cars, houses, retirement plans and companies, along with a lot of exotic financial instruments based on risky mortgages.
On "To the Point" — why AIG will be backed up with $85 billion in taxpayer money. Will unprecedented government intervention ease the private financial crisis? Will other troubled companies be standing in line?
Guests:
– Justin Lahart: Economics Reporter, "Wall Street Journal"
– Raghuram Rajan: former Chief Economist, International Monetary Fund
– David Smick: Editor, "International Economy Magazine"
– Nomi Prins: former analyst, Lehman Brothers
– Steven Davidoff: Professor, Connecticut School of Law
Hosted by award-winning journalist Warren Olney, "To the Point" presents informative and thought-provoking discussion of major news stories — front-page issues that attract a savvy and serious news audience.