I don't pretend to be smart enough to answer all the questions. In fact, I'm not even sure why some of these companies are getting government bailouts while others are being allowed to fail.
In steps Barry Ritholtz with an explanation understandable to the layperson:
Lehman Brothers was like the little kid pulling the tail of a dog. You know the kid is going to get hurt eventually, and so know one is surprised when the dog turns around and bites the kid. But the kid only hurts himself, so no one really cares that much.
Bear Stearns is the little pyro - the kid who was always playing with matches. He could harm not only himself, but burns his own house down, and indeed could have burned down the entire neighborhood. The Fed stepped in not to protect him, but the rest of the block.
AIG is the kid who accidentially stumbled into a bio-tech warfare lab... finds all these unlabeled vials, and heads out to the playground with a handful of them jammed into his pockets.
Personally, I'm glad to understand that. But it doesn't make me feel any better about what's on the horizon in AIG's portfolio...
Your can't wait to get through this mess Realtor,