Why AIG Got a Bailout (and Lehman Didn't)

Geithner, Paulson face grilling over 'backdoor bailouts' for AIG clients

(NEWSER) - Two Federal Reserve governors expressed their unease about the Fed's rejection of a plan to force big banks to return $30 billion in cash they received from AIG before its bailout in late 2008. The officials warned that the decision to let the banks, including Goldman Sachs, keep the collateral they paid AIG on credit insurance contracts might be "a gift" to the firms, according to documents obtained by the New York Times. More»

$86K trip to England comes after feds' $85B handout, $38B loan

(AP) - The $440,000 spa weekend isn't the only outrageous splurge AIG seems to have indulged in after being bailed out by taxpayers last month. Now come news of an $86,000 hunting trip in England, turned up by New York Attorney General Andrew Cuomo. And the faltering insurance giant is also still paying lobbyists to fight against strict oversight of mortgage originators, the Wall Street Journal adds. More»

US must join UK's plan or face disaster: Krugman

(NEWSER) - Since the collapse of Lehman Brothers the financial crisis has gone from severe to terrifying, but the response of the United States and Europe has been "woefully inadequate," writes New York Times columnist Paul Krugman. We are now at a tipping point, and if world policymakers don't come up with a coordinated plan—this weekend—then we may well experience the "worst slump since the Great Depression." More»

(NEWSER) - These days, $85 billion just doesn't go as far as it used to. The Federal Reserve said today it will provide AIG with an additional $37.8 billion to help the beleaguered insurance giant out of its liquidity mess, Bloomberg reports. The money is on top of the massive loan it got last month. The New York Fed will provide the additional cash to AIG's life insurance subsidiaries in exchange for investment-grade, fixed-income securities. More»

Treasury chief pushes creation of agency; news lifts markets

(NEWSER) - The US government is considering the creation of a federal institution that would buy up bad debt from struggling Wall Street concerns, CNBC reports. Treasury Secretary Henry Paulson is reportedly pushing the proposal around Washington. By relieving financial institutions of toxic debt, they could return to lending money as per usual, perhaps stabilizing the country’s economy. News of the proposal gave stocks a huge lift today. More»