Don't say AIG never put anything in your wallets, taxpayers! The company just sold its Taiwanese securities unit to the Bank of East Asia, for something between ten and twenty million dollars, or between five and nine retention bonuses. Which brings us to the latest twist in the ongoing mystery of America's great black-scholes hole: why is it taking so long to sell off the pieces? Surely the rest of the company's units couldn't be as toxic as the one that had Joe Cassano in charge! Or could they? On Tuesday Ben Bernanke let it slip to Congress that had AIG Financial Products been allowed to bust, its bread-and-butter insurance businesses might have folded as well -- so buried were their balance sheets in lethal "products."

Cue the red tape gestapo!! But isn't insurance regulated? Says Institution Risk Analytics:

Speaking of poor fundamentals, when AIG released information about the amounts and recipients of roughly $100 billion of its government loans from September to December 2008, almost utterly unreported was the fact that the staid, boring, heavily regulated insurance businesses managed to run up losses on securities lending requiring $44 billion of government support.

By contrast, the free marketeers at Institutional Risk Analytics point out, the "credit derivatives widely blamed for bringing down the world's financial system" were only consuming $27 billion. "Could it be that the big story at AIG is the unsoundness of the insurer, not the credit default swaps?" they ask. "Why the misdirected coverage?"

We asked Bob Arvanitis, a former AIG executive and credit derivatives aficionado, whether the real scandal at AIG wasn't that everyone had managed to scapegoat the harmless credit default swap for the whole crisis simply because no one had heard of a credit default swap before a few billionaire hedge fund managers made way more billions loading up on them in anticipation the housing market would bust.

Not really, he said, in a nutshell. CDS and other such "products" brought down the company. Certainly AIG's insurance companies made some bad bets on real estate, Arvantis says, but they were scattered throughout subsidiaries with a combined trillion dollars in assets -- not the sort of things regulators would necessarily pick up. Which brings us to another problem the company faces selling its assets -- it's big. So big that at some point, in order to grow, the company needed to take on enough risk to sink the world economy; and after that happened, its once-profitable businesses leasing airplanes looked like less and less attractive acquisitions.