Save Of The Day

Why the Fed Pulled the Trigger on AIG

The government spend 85 Billion dollars in order to rescue insurance giant AIG from bankruptcy. The reason is because if AIG went down the "sky is falling" chants would rain down on wall street. Fear not, panickers. The sky is indeed falling but not as fast and it probably won't come all the way down. AIG will still have to sell off a lot of assets because help from the government does not come cheap. The government bail out also means the government now owns nearly 80 percent of AIG and the 85 billion dollar loan has to be repaid in two years with an 11.4 interest rate. Yikes.