For all the Agency and Company readers- you may not have read the fine print on the conservatorship from the Frannie and Feddie debacle last week. Afterall, its not that often that we get talking about these things.

So what is it? Essentially, it is a mechanism for the gorvernment to take control of an organization with the intent of continuing the run it - often times in preparation for a

Some details are emerging here - sounds like AIG will be placed into a conservatorship in return for a massive bridge loan. AIG has continued to reiterate that they are well collaterlized, but as issue is liquid capital to meet requirements. The bridge loan will enable to AIG to conduct an orderly liquidation to meet capital requirements.

We'll point out, though, that this loan will

Gasparino on CNBC is reporting that the Gov't is starting to cave somewhat on the AIG bailout.

By now its old news, but to recap - the issue isn't AIG's P&C lines, etc, but rather their exposure to other financial products. AIG is a counter party to billions of credit default swaps and other derivitives - essentially underwriting those assets with pretty much every major financial institution.

Both have confirmed that they are out of the deal. This vastly increases the pressure on both the Fed / Treasury, as well as AIG's board.

We've continued to hear rumors all day - and rampant speculation amongst industry analysts- that this deal would never happen. Now we are in a wait and see mode.

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

As an agency owner, the AIG situation likely has been cause for angst today. Keep an eye here as we continue to post analysis on what it means for you.