The cataclysm sweeping across global financial markets is moving so fast that no-one can keep up. That includes readers of this blog.
I was chided last night for my comment of a few weeks ago that AIG was a dead man in chains. A few weeks ago that is what is honestly looked like. The nationalisation of AIG by the US government looked to be just a way of postponing the inevitable demise, of managing its departure from the scene. Who, it did not seem unreasonable to ask, would want to be insured by AIG? State owned insurers simply had no place in the financial firmament.
Now state owned financial institutions are almost commonplace. We have woken up this morning in the UK to the news that many of our banks are going to join Northern Rock and Bradford & Bingley on the list of banks wholly or partially owned by the taxpayer, a solution that seems not to have ended the panic on the markets – perhaps we should close the markets down for a few days and throw a bucket of cold water over the lot of them.
Anyway, where does that now leave AIG? I still think it is in chains - just look at the exchanges over its jolly for top salespeople in Congress yesterday if you think it can just carrying on as before. But it is alive and will be kept alive simply because the alternatives are unthinkable.
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