US bails out AIG Insurance – in exchange for 80% stake !

AIG Insurance logo flag - bailout package from US Treasury Department

Well well, almost 1am, and some breaking news that BBC News is also about to release: The US Federal Reserve Bank “in full collaboration and with the support of the US Treasury Department” is going to throw a buoy out to AIG Insurance.

Essentially, they’re offering a USD 85,000,000,000 (ok, $85B for the playas) protection package for AIG… buying them time.

Interstlingly enough, Henry Paulson (numero uno at the US Treasury Department) did not want to extend a similar cash insurance for Lehman Brothers. I suppose the latter players’ golf round did not wind up the same…

My take: this is to shore up the US stock market, which is .. to put it mildy … in a state of shellshock. Will this quell the selloff currently underway? Not so sure…

Folks: follow the words of teh Berkshire Hathaway guru, and remember that Mr. Buffet loves longterm investments. At this very moment, I am certain he is guiding further acquisition of many depressed stocks.

Trick is: which ones?