The following is from today's WSJ:
"a transaction sold to Hewlett-Packard shows that AIG's tax-cutting deals spread beyond the financial sector, filings in a case in U.S. Tax Court show. According to a person familiar with the business, AIG's tax-structuring operation was even bigger than the credit-default-swaps business that led to the company's meltdown."
AIG was the gold standard for high-end insurance products. In the same way that nobody ever got fired for buying IBM, AIG had special cachet. Now everything that it touched is turning to the opposite of gold.
As it will be impossible for the company to regain its former market status, it's too bad that we taxpayers own it.
On a longer term and more positive note, they helped put a serious dent in the market for products that are so complex no one can understand them.
The futures are down big this morning. If the main reason is in fact that the GM and Peogeot CEOs have been forced out, then I'm betting that cooler heads will prevail later today. The U.S. autos may be too big to fail, but I don't think they're big enough to do serious dmage to the U.S. economy from this level.
edit: It looks loke the market is more worried about Geithner's comments yesterday, where he opined that there are banks that are still in trouble.
Oil is getting hit accordingly, almost back below $50.