Too Big To Fail

Too big to exist.

Bottom line; AIG is a cancer that has successfully metastasized.

Amid the flap over bonuses at American International Group Inc. two of the company's top managers in Paris have resigned. Their moves have left the giant insurer and officials scrambling to replace them to avoid an unlikely but expensive situation in which billions in AIG trading contracts could default.

Representatives of the Federal Reserve, AIG's lead U.S. overseer, are talking with French regulators and AIG officials to deal with the consequences of a complicated legal scenario in which the departures of the managers in Banque AIG, a subsidiary of AIG's Financial Products unit, could trigger defaults in $234 billion of derivative transactions, according to people familiar with the situation and a document AIG provided to the U.S. Treasury.

Whether we'd like it to or not, I suspect in the end AIG will fall, and with it the global economy. What's worse, the executives set it up purposely to cause this kind of chaos. Well, actually, even worse yet; the governments of the world stood by and let it happen.

Welcome to globalization.