American International Group (AIG) officials are in talks with the U.S. Treasury Department on ways for AIG to regain its independence, according to The Wall Street Journal.

Of all the government bailouts, AIG was the worse one. In the heyday of the housing bubble, AIG insured billions in shaky loans, loans that blew up when the housing bubble burst. As a consequence, the government has shifted $182.3 billion of taxpayer money into AIG to keep it afloat. Now, two years later, the government is looking for ways to get its money back.

Monday morning, embattled insurer American International Group (AIG) announced that it is repaying $4 billion in bailout loans to the government.

The loans will be repaid thanks to a recently completed $4.4 billion debt sale at International Lease Finance Corp. -- the company's aircraft leasing company. This payment should cut AIG's remaining balance with the Federal Reserve Bank of New York to $15 billion (or so).

The current investigation of the American International Group (AIG) bailout by Congress has brought to light the inner workings and secret deals that were made.

Center stage in the investigation is the New York Federal Reserve. There are 12 Federal Reserve Banks that operate under the supervision of Federal Reserve's Board of Governors, chaired by Ben Bernanke. Member bank presidents are appointed by the nine member board, who themselves are appointed by other bankers.

The U.S. banking crisis is getting more and more bizarre by the minute. We now focus on AIG. This is probably the greatest understatement of the decade: "AIG, American International Group Inc. (NYSE AIG) is in one hell of a mess." The US Treasury has bailed out AIG several times since last September to the tune of at least $180 billion. No one knows for sure where the money went. Regulators refuse to identify AIG's counterparties. The US Federal Reserve refuses to publicize a list of AIG's derivative counter parties.

How would you like to lose $460,000 per minute. That's how much the $60 billion fourth-quarter loss amounts to for AIG. Remember, back in September 2008, American International Group Inc (NYSE AIG) imploded, so the government gave it $85 billion. That was not enough, so the government upped the ante to $123 billion. It still was not enough, so the government upped the ante again to $150 billion. It still was not enough, so now the government is adding another $30 billion.

The government is also making more lenient terms on an existing preferred investment and lower interest rate on a $60 billion government credit line. It is expected that the London Interbanks offered Floor Rate on the interest AIG pays to the government will be removed, saving the company $1 billion a year.