The stiff upper lip evident in the willingness to let Lehman fail lasted exactly 24 hours. Yesterday the Bush administration panicked (yet again) and agreed to "rescue" AIG by providing it with a $85 billion Fed loan. As a result, the US taxpayer is now the majority owner of the insurance company - further adding to his/her portfolio of problematic (to put it very mildly) FIRE industry assets.
I won't go into the legality or other bureaucratic issues surrounding such bailouts/nationalizations (yet another falling knife caught at enormous cost...), but I do have a very simple question:
Excuse me, but who's going to ultimately salvage the salvager?