Then go the freakonomics blog. Guest bloggers Doug Diamond and Anil Kashyap provide an excellent guide to what is going on. They also assure us Mancunians that the blessed United is safe:
“… the Federal Reserve made a bridge loan to A.I.G., the largest insurance company in the world; perhaps best known to most of the world as the shirt sponsor of Manchester United soccer club, A.I.G. has assets of over $1 trillion and over 100,000 employees worldwide. The Fed has the option to purchase up to 80 percent of the shares of A.I.G., is replacing A.I.G.’s management, and is nearly wiping out A.I.G.’s existing shareholders. A.I.G. is to be wound down by selling its assets over the next two years. (Don’t worry, Man U will be fine.) The Fed has never asserted its authority to intervene on this scale, in this form, or in a firm so far removed from its own supervisory authority”.
So, that’s ok then. Meanwhile our comment to Ken Rogoff’s piece in yesterday’s FT on the impact of the crisis on the dollar argues that now is the time to invest in better social protection for the 37 million Americans in poverty. Bailing them out can help stabilize the domestic economy, and put a floor under the wobbly property market — and thereby help reduce the need to bail out the financial system. In the meantime, United becomes the first football club to be sponsored by a central bank. Thanks, America’s taxpayers!