You Can Put Lipstick On A Financial Crisis…

AIG ran into big financial trouble, largely because they insured and backed securities based on bad mortgage loans. So what does the U.S. government do? Give them a loan for $85 million. Are they throwing good loans after bad? Probably not. They can always repackage the loans to Bear Stearns, Fannie Mae, Freddie Mac, and AIG and sell them to investors like, well, Bear Stearns, Fannie Mae, Freddie Mac, and AIG.

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