AIG Devouring Money

Bailed-out (for now) insurer AIG is getting through it's emergency Fed funding package of $123 billion at an alarming rate.

Figures from the Fed show that $90 billion of the $123 billion available has already been drawn down.

How can a company claiming to be solvent in September could have developed such a big hole by October? Creative accounting?

Already it seems that $123 billion is not going to be enough to stop the rot at AIG. Edward Liddy, the insurance executive brought in by the government to restructure AIG, has already said that although he does not want to seek more money from the Fed, he may have to do so.

AIG has so far declined to elaborate on exactly what it has done with all this money. The company has outlined only broad categories: some is being used to shore up its securities-lending program, some to make good on its guaranteed investment contracts, some to pay for day-to-day operations and — of perhaps greatest interest to watchdogs — tens of billions of dollars to post collateral with other financial institutions, as required by AIG's many derivatives contracts.

We most certainly haven't heard the last of this one methinks. What does AIG stand for anyway? Accountant In Gaol?