Is AIG a Zombie?

Bloomberg seems to think so:

Revised AIG Terms Begin Treasury Transfusions to 'Zombie' Firms

Bloomberg, By Craig Torres, November 11

The revised bailout of American International Group Inc. marks a new phase in the government's effort to shore up financial markets: It's the first time cash from the rescue fund Congress created last month has been committed to a failing company.

The Federal Reserve, which saved the insurer from collapse two months ago with an $85 billion loan, yesterday reduced that loan and offered lower rates, while the Treasury chipped in $40 billion from its bank-rescue fund to buy preferred shares. The new terms represent a departure for Secretary Henry Paulson, who until now has said he only wants to invest Treasury funds in ``healthy'' firms.

Taxpayers are ``keeping the zombie alive,'' said Robert Eisenbeis, chief monetary economist at hedge fund Cumberland Advisors and former director of research at the Atlanta Fed. ``We keep getting deeper and deeper into these holes.''

The shift is likely to vastly expand political demands for saving dying companies in the name of financial or economic stability....

Over at Dealbreaker, they think there are both similarities and differences between AIG and Zombies...