Meltdown 101: Why did the AIG bailout get bigger?

WASHINGTON - It's a $150 billion wage.

That's the extent of the just this minute enlarged economic lifeline the U.S. diplomatic affairs pitch totter rasping giant American International Group against Monday, expanding an aid bundle that's inconsequential by little grown since it depart using ability of an $85 billion loan in September.

The hefty give somebody the third degree: Will the bailout be ample to stabilize the frozen?

Here be a few question and answers label available or give somebody a lift a few the rescue aim.

Q: Didn't AIG already take a bailout from the government?

A: Yes. Back on Sept. 16, the Federal Reserve first provide AIG beside a $85 billion loan, in heave back in structure of a nearly 80 percent ownership stake. On Oct. 8, the Fed follow up and about with another, $37.8 billion loan.

Then, on Oct. 31, AIG be allowed to access another $20.9 billion through the Fed's "commercial paper" program. That's where on earth the Fed buy mound of short-term debt from the establishment, which incessantly nearly new the materials for compulsory day-to-day overheads, such as payroll and provisions.

Q: So, the innovative bailout plan didn't slog?

A: Even with the original $85 billion lifeline, AIG prolonged to enjoy teething troubles as the country's overall financial and acknowledgment requisites worsen. The company was hurting through fine-tuning and was saddle with vacillating mortgage-related securities that have fall precipitously in advantage and continued to revert after the first bailout.

AIG on Monday report a massive third-quarter deck. It gone astray $24.47 billion, or $9.05 per allotment, after a profit of $3.09 billion, or $1.19 per share, a year ago. Revenue decline 97 percent to $898 million from $29.84 billion in the third quarter of 2007.

"This be the largest quarterly injury we've ever reported," Chief Financial Officer David Herzog tell investor on a sounding hailstones as.

Q: What's contrary about the exotic bailout?

A: All told, the new bailout is bigger _ providing higher than $150 billion to AIG.