AIG insures everything. They insure oil rigs in the gulf against damage from storms. They insure airlines against losses caused by crashes. They insure Joe Sixpack against him crashing his car. They insure Jane Sixpack against her house burning down. Unfortunately, they also insured against all of the credit default swaps. That will be the death of them just as it has been the death of this economy. Unfortunately, it’s also going to take down the oil companies, airlines, and Joe & Jane Sixpacks with them.
Any business or individual that relies on insurance to operate will go down if AIG goes down. I’m not a fan of all of these cash injections, but what other options are there?
