scenes from a meltdown

Shares in AIG Open Around $2 (Updated)

David Paterson’s decision to offer AIG a lifeline seems not to have impressed investors so much. Shares in the insurance giant fell 60 percent to under $2 in pre-market activity this morning, and are currently, as this is being typed, at around $1.87. ($1.87!) And despite the fact that former chairman Hank Greenberg (Can anyone else not look at him without thinking of him sweaty and heaving with Barbara Walters by the way?)* cannot imagine a world in which the Fed allows AIG to fail (as he just told CNBC), and thinks they should give AIG a bridge loan, they’re not exactly rushing in there. Rather, yesterday they asked Goldman Sachs and JPMorgan to come up with a $70 billion cushion for them to rest upon. But, as Felix Salmon puts it: Where on earth are they supposed to find that kind of money? “The situation is dire,” a source told the Journal this morning.

Update: Charlie Gasparino at CNBC just quoted sources involved in the Fed meeting with A.I.G. going on right now as saying that a “government bailout is back on the table.”

AIG Down Again Amid Cash Crisis [WSJ]

AIG gets lifeline as shares go into free fall [AFP]

*Our bad, that was Ace Greenberg. But still.

Shares in AIG Open Around $2 (Updated)