AIG could be placed in conservatorship

The AIG saga continues its twists and turns. The latest is a Bloomberg report that AIG may be placed into conservatorship, the same state of limbo in which Fannie and Freddie find themselves. this would seem to guard against a cascade-style collapse of AIG but would seem to wipe out shareholders. EUR/JPY is tumbling on the report.

Here is the Wikipedia emtry on conservatorship.