The future of AIG?

AIG survives, but it will be a shell of its former self. Which may not be a bad thing. In agreeing to to an $85 billion bridge loan from the government, the insurer basically gave up operational control. The Federal Reserve could end up owning as much as 80 percent of the company, reports Fortune. The deal also requires AIG to sell businesses to raise capital, and to repay the debt. One unit that is toast: AIG's Financial Products unit, once hugely profitable thanks to the insurance guarantees it sold on credit default swaps tied to mortgages. Most people are guessing assets will be sold at fire sale prices. Just look at Lehman's pitiful deal for its investment bank. AIG competitors will be forced to take a hard look at some assets. You can bet jobs will be at stake.

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