AIG says it bought some Maiden Lane II assets (Reuters)

Money Morning submits: By Kerri Shannon

Zacks.com submits: American International Group, Inc. (AIG) has bought assets in the New York Federal Reserve's auction of mortgage backed securities, which was acquired by Fed from AIG during the height of the financial crisis.

A key player in the financial crisis was insurance giant AIG, which sold a huge volume of credit default swaps supposedly protecting buyers of mortgage-backed securities from losses due to default. But AIG had nowhere near the capital necessary to honor these guarantees when things went bad, and much of AIG's liabilities ended up being picked up by the Fed and the Treasury. On Tuesday the U.S.

It’s been a long time since I’ve thought about the JP Morgan/Bear Stearns shotgun wedding (see Rescue for Bear? and Rescue Update for background). Back when I wrote those blog entries, I wondered aloud whether, in addition to preventing Bear’s collapse, the Fed also orchestrated a backdoor bailout of JP Morgan in the process.

By Shock Exchange:American International Group (AIG) filed a lawsuit against Maiden Lane II, a vehicle created by the Federal Reserve of New York to facilitate a bailout of the insurer. Maiden Lane II was created in December 2008 and funded by the Federal Reserve to purchase residential mortgage-backed securities ("RMBS") from AIG to ease liquidity strains caused by losses in its securities lending unit.

Mike Maher submits:Maiden Lane II's creation was surrounded by controversy, and the ending of the vehicle is attracting a fair bit as well. As part of the bailout of AIG (AIG), in November 2008 the Federal Reserve agreed to purchase tens of billions of dollars in assets from the insurer, providing the firm with much needed liquidity.