The Zero Hegdge blog has quite the bombshell story, a trader anonymously spilled the beans on AIG being used as a funnel for U.S. taxpayer money to other banks. In layman's terms:
For those to whom this is merely a lot of mumbo-jumbo, let me explain in layman's terms:
AIG, knowing it would need to ask for much more capital from the Treasury imminently, decided to throw in the towel, and gifted major bank counter-parties with trades which were egregiously profitable to the banks, and even more egregiously money losing to the U.S. taxpayers, who had to dump more and more cash into AIG, without having the U.S. Treasury Secretary Tim Geithner disclose the real extent of this, for lack of a better word, fraudulent scam.
Go to Zero Hedge in link for the technical trading details of the post.
We also noted this taxpayer screw job earlier.
But to hear it from a trader directly involved is amazingly damning.