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AIG and the Federal Reserve

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How should we read this mornings global liquidity injection? Japan added $24 billion. India's central bank kicked in some liquidity. The European Central Bank added $99 billion. The Swiss added $7 billion. The Federal Reserve accepted $50 billion in overnight repurchase agreements and said it stands ready to add more cash into the system. This is on top of the $70 billion the New York Fed added on Monday, the biggest cash injection since the aftermath of September 11th.
This suggests that the central bankers of the world have a coordinated plan to create a temporary liquidity surge. This suggests that depository banks themselves are hording funds following the collapse of Lehman Brothers and perhaps bracing themselves for the collapse of AIG.
"I'm reading this as an indication that AIG will be allowed to go. They're trying to make sure the markets don't freeze up in the wake of a catastrophe," one credit trader told us this morning.

We added a poll on whether AIG will file for bankruptcy over in the little permanent poll space on the right.