So, USA bails out AIG which uses the funds to pay GS which has connections to senior USA officials. Now a USA bailout of GM is complicated by objections from GM bondholders, some of whom would prefer GM default so they could collect AIG-supplied credit default swaps, swaps which are claimable because USA bailed out AIG.
What a mess…
This is why the government really shouldn’t be in this at all.
But this isn’t the should-world, it’s the real-world. Sigh…
