This blog aims to admit its mistakes. This is an admission that this post was spectacularly wrong.
The main reason why the that post was wrong was that I assigned a very large value to AIG's life insurance businesses - and in the meantime pretty well every life insurance company in the world has imploded. (See Hartford for a good example.)
With the written down value of life insurance companies (and AIG is fundamentally a life insurance conglomerate) there is no hope that core bits of AIG can be sold in any reasonable time frame. Hartford might come back as Peter Eavis posited in the WSJ - but I am not holding my breath. Likewise there is some hope that the life insurance bits of AIG can find a bid one day. But not today.
AIG was about 50% life insurance, 40% property and casualty and 10% the rest which included some very bad bits (mortgage insurance in the US) and some truly unbelieveably bad bits (AIG Financial Products).
Even if it had not been for AIG Financial Products a company as dependent on life insurance as AIG would be in deep trouble now. It would - for instance - almost certainly be trying to raise capital in the same manner as Manulife.