David Faber of CNBC says talks with Buffett over AIG ended over the weekend without a deal. He also reports that the US government has hired Morgan Stanley to negotiate a bridge loan with AIG. Morgan Stanley worked with the Treasury on the Freddie/Fannie bailout. AIG stock is under pressure once again as the Buffett talk dies down.
There continues to be a debate over whenther of not the Fed will ease tomorrow. The point is somewhat moot as the market has already eased for the Fed as the two-year note yield trades well below the Fed funds rate. It is unlikely the Fed would allow that situation to last long, so expect at least a 25 bp cut tomorrow or a back up in yields in the next few days.
