Mobile Audio Post / The AIG Collapse

When Lehman Brothers filed for bankruptcy on Monday, it became the latest but surely not the last victim of the sub-prime mortgage collapse. Financial institutions around the world have already reported more than half a trillion dollars of mortgage-related losses and that figure will most likely double before it’s all said and done.

The federal reserve obviously has deemed AIG too important to fail hence the $85 billion bail out. The reason may be that such a failure would pose a much larger threat to the financial system than Lehman Brothers due to AIG’s size and the fact that it plays an integral role in several key markets including: credit derivatives, mortgages, corporate loans and hedge funds.

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