Think we're not?
Freddie and Fannie= Owned by the government. Controls over 1/2 of the mortgages in America.
A.I.G.= Owned by the government. Insures a huge percentage (globally) of all the 'mortgage debt instruments'.
And we're being dumb about it.
Sunday- A.I.G. asks for a $40Billion loan to stave off a change in it's credit rating.
Monday- Fed's say no. Monday night: Credit agencies lower A.I.G.'s credit rating
Tuesday- A.I.G. says it may have to liquidate. Tuesday night: Fed says, no no.. here's $85 Billion
$85 Billion vs. $40 Billion.
Why did it happen? The short answer appears to be the Fed's tried to scare the existing players (Goldmans, etc.) into funding A.I.G. and lost the stare down.
The cost to you and me? $45 billion.