In a piece published by the New York Times money manger Michael Lewitt writes, “Wall Street isn’t remotely prepared for the inestimable damage the financial system would suffer if A.I.G. collapsed.”
“AIG has tentacles everywhere,” explains Lewitt on Fast Money. “And if it's unable to meet its obligations every institution with whom it does business is going to have one kind of problem or another.”
He goes on to explain that AIG “plays an integral role in several key markets: credit derivatives, mortgages, corporate loans and hedge funds."
Here’s where it gets really bleak.
"If something is not done (to help AIG), a lot of what was done with Bear, Freddie, Fannie will be for naught. Because we’re going to have some serious permanent systemic damage that’s going to take a very long time to unwind.”
We'll be watching.
New York Times: “Wall Street’s Next Big Problem”
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Trader disclosure: On Sept 16, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MSFT), (WMT), (UUP): Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman's Firm Owns (DVN), (GE), (MSFT), (NOK), (SUN), (TSO), (VLO), (PM); Finerman's Firm Is Short (XLF), (IYR), (IJR), (MDY), (SPY), (IWM); Finerman's Firm Owns (DNA) Calls ; Najarian Owns (AAPL) And (AAPL) Collar; Najarian Owns (AIG) And Is Short (AIG) Calls; Najarian Owns (MS) And (MS) Put Spread And Is Short (MS) Calls; Najarian Owns (NOK) And Is Short (NOK) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (TSO) Call Spread; Najarian Owns (WB) Put Spread; Najarian Owns (WM) And (WM) Puts; Najarian Owns (XLF) And (XLF) Collar
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