I should think it was obvious what he knows.

The U.S. Government can't afford to bail out all of the AIG commitments, never mind all of the other AIG's out there. There's a universal run in the U.S. financial world/banks that is not getting better. It's getting worse.

The U.S. Government is openly on the hook -it has taken on the awful balance sheets of these banks and insurance companies. No one even seems to be able to quantify the counter-party risks. AIG could have, and probably did, hedge their risk by buying insurance from other providers. So all of the sudden when they lose a billion, it's insured through Manulife, and another company is going down.

The Government doesn't even have a choice about that, because it has guarranteed the insurance policies taken out by individuals with these companies, and has guarranteed the individual deposits of individuals up to (correct me if the number here is wrong) $200,000.00. Obama's damned if he does, and damned if he doesn't.

I ain't no genius, but if they had to pay off every major bank deposit in the U.S., and all of the crazy derivative insurance products (and it looks like they may have to),

Well, they just can't afford to.

They can't.