Cory Doctorow at Boing Boing recently posted a leaked memo from AIG to the Treasury in support of their request for another $30B. You can read the whole memo here.
The size and scope of the AIG business operations are breathtaking. The systemic risk associated with letting them fail is frightening, to say the very least. And, we find that the notional value of their derivatives risk is $1.6 Trillion covering 1500 corporate, governmental and institutional clients.
This is a sobering document in so many ways. The notion of creating financial behemoths that are "too big to fail" will go down in history as the single most foolish policy endeavor of our time. Undoing the excesses of this policy and restoring a functioning system will probably be regarded as the greatest accomplishment, if it can be done at all.