Correct me if I’m wrong and enlighten me, please.  According to one dictionary assets are the entire property of a person or corporation.  If that is true, and here is my question, why is there a need to bail out AGI when it has over a trillion dollars in assets? 

Dee assets are only one side of the equation. If liabilities are figured in than we have to subtract them from the assets to come up with worth. In the insurance or banking there are guidelines that dictate that ratio. In other words if I have liabilities that reduce my assets below a set ratio, I must raise more capital to cover this to be in compliance.  When someone like AIG fails to meet those standards then the first thing that happens is that their credit rating get reduced. This means that the cost of business goes up. It is not that simple but for a general view that is the way the insurance and banking market works.

I hope this simple explanation works because the long one is very boring and to long to write out.

The essence of the AIG bailout is that we can not have a company that is as involved in so many markets and plays such a big role in the economy of so many countries, go down. There is less risk in this bail out than there is in Fanny and Freddie but the recent Resolution Trust scheme pretty much put both in the safe zone.

Are we out of the woods, NO! Are we on better footing, Yes! You see a lot of the market is perception and it is now perceived as being better. I think that the housing market got a big boost with the Resolution play and will benefit.

John McCain got chastised by saying that the economic fundamentals were good. In reality they were. If you are out of a job or a Realtor you have a hard time looking at economics in a fundamental way. The truth is that manufacturing, export and some of the things that make the fundamentals are not in bad shape. That doesn't mean that John Doe is doing good. It only means that the things that help John make a living have not collapsed. Probably not a good political statement but it is true.

We have a good system in place as flawed as is it, we will survive this bump in the road and in spite of our division on the political front we will come together in a unified front to cure some of the problems we have because I believe when we put the well being of all at the front of the line we will make the right decisions.

Good input, Gary!

Also, as they taught us in economics class, "assets" have various categories, including Fixed Assets, Long-Term Assets, and Intangible Assets.  

The media, and/or others can make the numbers appear absolute, but it would take a microscopic review to determine the classification and true worth of AIG's asset situation.

That's why we have (had) accounting firms like Arthur Andersen.   :)

Phil, I love your reference to Arthur Anderson. It shows what happens when the Fox is left watching the Hen House. It is exactly why our country is in the mess it is in - LOBBYISTS! And, it is also why Gary should not give mention to John McCain. He is part of the problem. YES, we can, Dee. YES WE CAN!!!!