IBM could pick up AIG for $5.00 a share ( in IBM stock ), Use IBM's AAA rating to reduce need for collateral for CDS's.AIG instantly solvent, IBM has time to sell the parts of AIG it doesn't want.
Those GD derivatives do nothing for capital formation. They don't create employment, they don't help find a cure for cancer. The crap is sold as insurance but the salesman is the devil in a casino.There are two sides to a derivatives contract. Losses are unlimited when the swing goes against you.Who has the other side of the AIG contracts? I will give you 100:1 odds it ain't OBL.