derivatives of phantom products (I now forget the name) in essence bets on bonds of various sorts will pay off (bull) or will not pay off (bear)
these "instruments" for which there was NO market - had no regulation all of these instruments were contra built (one on one) They were made by insurance companies or TBTF banks or others. If you held a bond and were afraid it would not pay at the end- you could for highly leveraged small amounts - buy coverage from a bull (to insure your bear position or concern).
As I recall - there were about 80B of these contracts in $ value The writers et al -- agreed to a one day summit to "close positions" --- bull and bear As it turned out - other than AIG no participant lost a significant amount of money - as they ALL wrote about the same amount of bull and bear instruments ---- and made their money on the say 5% off the top for creating the instrument. AIG - alone - had massive exposure - and true to its insurance mind set was 100% bullish - costing them a fortune and a major reason that private market decisions - not the GOV - was the reason for their failure . F and F were targets of potential rumors and runs but had the cash to cover obligations (even if write downs of some assets (bonds) on a GAP basis had them Balance Sheet red) No way are they at all equivalent or
AIG is like bass-terd redheaded little boy caught stealing candy, the GSE's are like Leonidas I. There are no similarities to how both were took over, nor any similarities if either were allowed to fail. AIG does nothing similar to the GSE's. Its apples to watermellon comparison, and those trying to push it as the same are intellectually thought challenged.