Breaking: Fed to Bail Out AIG

We enjoyed, and participated in, the 4 days of praise for the government's courageous position to stop rescuing American businesses (Lehman Brothers, GM, AIG, etc.). I guess Treasury Secretary Paulson enjoyed it too, so much so he felt he had to show his 'soft' side.

From the International Herald Tribune:

Acting to avert a possible financial crisis worldwide, the U.S. Federal Reserve Board reversed course Tuesday and agreed to an $85 billion bailout that would give the U.S. government an ownership stake in the troubled insurance giant American International Group.

AIG was in a freefall not because of their insurance business or the risk of not being able to cover insurance claims. They were in decline because their financial division was drunk off of risky mortgages - just like all the other companies that are failing. The "mortgage crisis" started over 13 months ago. Companies that find themselves in trouble today are those that have a poor decision-making streak equal to 13 months plus the months prior when they were buying risky mortgage backed securities.

Secretary Paulson, there is a hat maker that will suffer a decline in sales after November 4th. How about a bail out??