Both Moody's and S&P have now downgraded AIG. We can talk chicken and egg here, but their stock price is now down volitile in the $2-4 range. The combined effect is that AIG is in a near-impossible position in trying to raise a massive amount of capital.

It will be interesting to see through the day how successful they are - the gov't is pushing Goldman and JP Morgan to lend nearly $75b to AIG. While the screws are being turned, we aren't hopeful that either bank is in a position to do a deal in this range. (The deal will have to be a widely syndicated deal, but given the complexity it seems highly unlikely to pull together a transaction of that size in such a short period)