Now you know the real anawer to why the Feds won't let AIG fail.
The Feds could have easily guaranteed all of the pension funds for far less than they've shelled out. The main reason for throwing 120B or whatever into it is to prop up the failed idea of credit default insurance. There's no way to spread the risk when the entire financial system fails, but if they didn't funnel out that money, the Feds believed the financial system would fail.
Rush was talking about this today. He said he has been unable to confirm. If anyone could confirm or deny for him, I’m sure he would appreciate a heads up.