Wednesday morning is going to be very busy.  After leaving Lehman on the stake to be picked apart by the crows, the Federal Reserve has written an $85 billion dollar cheque to keep American International Group alive.  The media spin, and press monkeys are priceless:

The interests of taxpayers are protected by key terms of the loan. The loan is collateralized by all the assets of AIG, and of its primary non-regulated subsidiaries.  These assets include the stock of substantially all of the regulated subsidiaries.  The loan is expected to be repaid from the proceeds of the sale of the firm’s assets. The U.S. government will receive a 79.9 percent equity interest in AIG and has the right to veto the payment of dividends to common and preferred shareholders.

They can't repay their loans now; that is the whole problem.  The debt they already have is secured by the assets of AIG.  Why is this loan any different?

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