700 billion bailout is small beans. Geithner worries that because the troubled insurance
giant American International Group (AIG) is a conduit for the banks'
use of credit default swaps, a collapse of AIG (as an unintended
consequence of dismantling the big banks) could be catastrophic. AIG's
more than 300 million terrified holders of insurance-related
investments and pension funds, who have investments totaling $20
trillion (U.S. GDP is $14 trillion), could suddenly rush for
redemptions -- the equivalent of a run on a bank. Geithner would face
a worldwide insurance collapse to accompany his global banking collapse.