It seems AIG has scared the Fed into another bailout, after all:
Reuters: Bloomberg reported, citing a person familiar with negotiations, that the Fed is mulling a loan package for AIG.
DealBook: The Federal Reserve is considering participating in a $75 billion emergency financing package for the American International Group, people briefed on the matter said, in an apparent reversal of its refusal to bail out the sickly insurance giant.
Wall Street Journal: The New York branch of the Federal Reserve, where the meetings related to the AIG situation were talking place, had no comment on the report of possible Fed involvement in a bailout. AIG said in a statement issued after the close of trading that its "life insurance, general insurance and retirement services businesses, including its extensive Asian operations, continue to operate normally and remain adequately capitalized and fully capable of meeting their obligations to policyholders."
Our position: Let the parent fail, sell off the healthy subsidiaries.
