Explain to me: Federal Bank Bailout

[asterroc]

Oh wise LJ-friends, explain to me this Feds bailing out / buying out the banks thing. Preferably in 3 sentences or less (so as to boil it down to what's most important).

I really do appreciate y'all's ability to boil down these topics I find remarkably complex and filled with too many details for me to grasp, into simple "here's what's important about the thing, and here's what you can ignore" sort of summaries. And I've a tag for them too.

So. Fannie May, Freddie Mac (what's with the names anyway?), and AIG. Three sentences. Go!

Comments

[spazzy444.livejournal.com]

I only know about AIG because I basically had to listen in on a conference call presented by Marsh (huge, nay one of the largest brokers) for my boss and write a summary on it.

Basically -
AIG, inc. is the parent/holding company of many other companies, specifically insurance companies. AIG, inc. does not insure anything...it invests.
It lost a lot of money in the stock market/investments.
The subsidiaries that are insurance companies are FINE, in fact they are pulling in substantial profits. Before the fed bailed them out but after they made note of their issue it still had a S&P rating in the A's as did all the subsidiaries.

so 3 or less sentence version:

AIG is an investment company that is the parent of several insurance companies. Investments lost money, insurance made a profit.