Tuesday, September 16, 2008


Fed's considering giving AIG a loan. How big I wonder? AIG, we must remember, is primarily an insurance company, with substantial other sidelines, and is very far from the Fed's normal domain which is commercial banks. Fed going to make a loan GM next? Not crazy given its heavy equity in GMAC.

When Chrysler was given loan guarantees of $1.2 billion, about $3.2 billion in today's money, over 25 years ago it was like a nuclear-sized event. And it required an act of Congress.