Socialism at its best in troublesome economy

[italkcash]

When looking at USA some might wonder why the government is bailing out tons of companies. It seems to conflict with the free market forces as the government comes to the rescue of the world largest insurance company AIG. AIG will get an $85bn loan, in return for an 80% public stake in the firm.

The rescue of AIG - which has a trillion dollars in assets and insures bank loans around the world - prompted a tentative rally on Asian markets.
Wednesday trading saw gains in Tokyo, Taiwan, Singapore and Seoul, though prices in Hong Kong fell after starting higher.

The AIG plan calls for the government to seize up to 80% of the company and remove its management, in a similar fashion to the way it took control of mortgage giants Fannie Mae and Freddie Mac which were crippled by the US housing crisis.

Meanwhile, the Fed has left interest rates unchanged at 2%. The BBC's Matthew Price in New York said the bank had decided an interest rate cut would not help to alleviate the short-term financial crisis.

But leading indices across Europe ended lower, with banking shares being the worst hit.
Central banks around the world responded by carrying out emergency measures to keep markets liquid.