Loan or own?

Finance 101:

A bond's a loan.
A stock you own.

And AIG, is now what the Fed owns. How did that happen???

Remember Liddy's little lies?
http://aaronandmoses.blogspot.com/2008/12/aigs-liddys-little-lies.html

Liddy said that AIG was the only company that had a plan to pay back the Government $60 billion, and that AIG needed to pay them bonuses bonuses or AIG's people would go.

So much for that. But the government said that all the people at AIG can stay employed. Despite costing the taxpayer $182 billion!

But I digress--But I thought the Fed was in the business of loaning money--so who are the counterparties on the other side of AIG?

"The counterparties on most of the book are (European) banks that would be hammered if the U.S. walked away."
http://www.reuters.com/article/topNews/idUSN0134457520090301?feedType=RSS&feedName=topNews

So now the taxpayer is in the business of bailing out European banks.

No wonder Buffett said:

At the moment, it is much better to be a financial cripple with a government guarantee than a Gibraltar without one.

and

The First Law of Corporate Survival

Modest incompetence simply won’t do; it’s mindboggling screw-ups that are required.