you are correct that I know nothing of what's in their contracts. and you know nothing of if they committed fraud...or do you? The real problem is AIG is an I

you are correct that I know nothing of what's in their contracts. and you know nothing of if they committed fraud...or do you? The real problem is AIG is an INSURANCE COMPANY, not an INVESTMENT BANK. At least the part that the gov is bailing out is about its insurances. An insurance company is only supposed to invest its moneys in very low risk investments. The reason is they are supposed to constantly monitor the costs of covering their underwriting and keep enough funds on hand to cover their bets. They have not done so. This is the root of the problem. Is it fraud for an insurance company to not have enough to cover its underwritings and to continue to take on more? I think so...and that's the core of this problem.