American Insurance Group, AIG, the largest insurance company of the world has collapsed and is being rescued by the US government with nearly 80 billion dollars worth of funding. The US government has decided to bail out AIG because the collapse can cause major panic among all investors towards US and US securities for decades to come. Still there could be more major bank failures in coming weeks which cannot be avoided due to the collapse of Lehmans, which has created billions of dollars of losses to all linked parties.
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