American International Group, Inc. (AIG)

[martingale]

The root cause of AIG's woes has been Credit Derivative Swaps
(CDS) and that has to do with the complex financial instruments which AIG used to insure clients from the possibility of mortgage backed securities (MBS) from defaulting.

With the government stepping up to buy the MBS now that will definitely ease the claims which AIG has been experiencing as of late. It is difficult to say if the CDS they have in place will "transfer" to the paper the FEDS are buying. If it does
then we may not experience much relief as up to 6.5% of all home mortgages are now 30 days deliquent or more (WSJ 9-20-08).

This is an article from the New York Times touching on the issues:

http://www.nytimes.com/2008/09/21/business/21econ.html?_r=1&hp&oref=slogin