AIG Granted Access to $20 Billion in Funding

AIG will be allowed to access $20 billion of assets held by its subsidiaries to use as collateral to borrow cash to fund its day-to-day operations.  The stock has ripped $1.50 on the news, which is quite the rally considering that AIG was trading at $4.50 before the news hit the tape.  This should buy the firm a bit of breathing room to dispose of assets to meet margin calls that it is more than likely receiving from its counterparties today.  The question remains is $20 billion enough to keep the firm afloat until it can find a more long term solution to its liquidity problems?  The market is still sorting it out.

I must admit that there has been shockingly little hard news today considering what a big weekend we had.  Banks are still trying to come to grips with their exposure to Lehman, AIG, WM, insert name of blow-up du jour.  The repercussions of these major events will be felt for some time.  Watch for more "analysts" and "pundits" claiming that this is truly the bottom.  I swear if I hear even one money manger on CNBC mention this as the bottom, I'm buying more puts.