This is a fascinating story -- a behind-the-scenes scenario that is the stuff of conspiracies.

During the housing bubble, a huge number of questionable mortgages were created in what is called the subprime market. Many of the home buyers had shaky credit and, eventually, fell into foreclosure. Goldman Sachs (GS) held some of these securities but wanted protection against default. Where do you buy such insurance? American International Group (AIG), of course.

Under the terms of the insurance, Goldman was entitled to collect payments if the securities fell below certain agreed-upon values. You guessed it. When the housing bubble started to burst, Goldman demanded $2 billion from AIG to cover its losses.

Can you imagine this! American International Group (AIG) is paying its employees $100 million in bonuses.

This is after AIG was bailed out to the tune of $182 billion by the U.S. government. The government owns 80% of the insurance giant. AIG employees have agreed to a $20 million cut. However, some employees are screaming that that is not enough. They claim that their contracts dated earlier than the bailout must be honored.

The Obama administration is announcing plans to impose a "financial crisis responsibility fee" on large banks that received TARP money.

The tax will seek to raise $90 billion to cover expected losses on TARP, and will be levied only on large institutions: about 50 companies will have to pay it.

The Federal Reserve picked up a $52.1 billion profit last year, a record for the organization. The result is due largely to its 2009 bailout efforts. Of the profit generated, $46.1 billion will be handed over to the Treasury Department -- the largest profit payment made since records began back in 1914. The previous record was $34.6 billion, in 2007. Last year, the Fed turned $31.7 billion over to the Treasury Department.

According to the Associated Press, the profit didn't come from the $700 billion lent to financial institutions -- and then to auto companies like General Motors. Rather, it was the result of earnings from the securities it had in its portfolio last year. Several investment programs were launched last year to help kickstart the U.S. economy and drive down rates on mortgages and consumer debt. Through the programs, the Fed bought $300 billion in government debt, and under another, it's on a trajectory to buy $1.25 trillion in Freddie Mac and Fannie Mae mortgage securities.

Retailers appear to have been rescued at the last minute, according to data from the International Council of Shopping Centers. Shoppers looking for deals the week before Christmas -- and making up for the day lost to stormy weather on the East Coast -- spent aggressively, sparing the retail sector a dismal 2008-like performance.

The healthy conclusion to the holiday season led to a positive change from November and made December one of only three months (including September and October) in which retail sales increased year-over-year.

Did the Federal Reserve gag American International Group (AIG)? Emails first reported by Bloomberg News show that the insurer wanted to disclose information about the payments it made to such banks as Goldman Sachs (GS) and Deutsche Bank (DB) to cancel some financial deals. But, lawyers for the New York Fed, which was led by Timothy Geithner at the time, told AIG to pull that information out of a report it was going to issue.

The AIG bailout is being questioned by watchdogs, which accuse the Fed of doling out billions of dollars to banks that weren't necessary -- especially now that big bonuses are piling on.

Stock futures on Wall Street were modestly higher ahead of a much-anticipated report on December employment, due at 8:30 a.m. Eastern time. The Dow Jones industrial average was higher by 6 points to 10,551, while the Nasdaq ticked up 2 points to 1,879.50 and the S&P 500 was up slightly to 1,137.60.

Friday's latest Employment Situation Report from the government is expected to provide further evidence that the nation's jobs picture continues to improve. A Labor Department report yesterday showed that although initial claims for jobless benefits inched 1,000 higher to 434,000 in the latest week, continuing claims plunged 179,000 to 4.8 million to their lowest level in a year. And on Wednesday the ADP National Employment Report showed private-sector employers cut the fewest number of jobs since March 2008. Expectations are the nation lost 25,000 non-farms jobs in December, while the unemployment rate inched up to 10.2%, according to Briefing.com.

More than 20 million people received unemployment benefits last year, a new record. While they didn't all do it at the same time, the activity was enough to run the unemployment rate up to 10%, leaving everyone with the belief hope that 2010 just has to be better.

The severity that has characterized the job market since the woes of American International Group (AIG) and Lehman Brothers made headlines in September 2008 eased up a bit as 2009 marched toward its conclusion. The layoffs slowed down a bit, but a dearth of hiring means that we aren't seeing a pickup for the 5.8 million who've been out of work for more than six months ... let alone everyone else.

Can you imagine this! Anastasia Kelly, chairman for legal, human resources, corporate affairs and corporate communications resigned effective December 30. She claims to be eligible for severance pay under the company's executive severance plan of $2.8 million dollars.

The employees at American International Group, Inc. (AIG) have so far been able to mix arrogance with incompetence to a new level. First off, it was their incompetence that took AIG to its knees. AIG had to be bailed out to the tune of $180 billion dollars by the U.S. government. The government owns 80% of AIG.

Let's chalk up one of the first casualties to the salary limits imposed by the government. American International Group's (AIG) vice chairwoman for legal, human resources, corporate affairs and corporate communications, Anastasia Kelly resigned Wednesday for "good reason."

And what was that good reason? It sure seems that it's the pay restrictions levied by Kenneth R. Feinberg, the pay czar assigned by the Obama administration to monitor pay at companies that received taxpayer bailouts. At AIG, the 26th through the 100th highest-paid employees (along with the other firms) have had their cash salaries limited to $500,000.

American International Group (AIG) is holding onto its property/casualty division for a while. It originally planned to unload 20% of Chartis (formerly named AIU) via an initial public offering or through a private transaction involving institutional investors.

But CEO Robert Benmosche is concerned that he'd be giving up the operating unit at discount prices. Selling cheap to repay the government won't benefit anybody – not even taxpayers – so he's waiting until an appropriate price can be fetched.

The job market shifted in 2009 from the heaviest cuts in almost a decade to one in which signs of recovery were, though limited, struggling to be seen. It isn't turning around yet, and unemployment could still go higher, but it seems that the worst is behind us.

According to Challenger, Gray & Christmas, the job market should come around in 2010, as job creation finally pulls ahead of job losses. Increased hiring, which is expected to gain momentum next year, may take a while to move the needle on unemployment, though, since there are millions of people who have been out of work so long that they are no longer counted as unemployed for the official number that now sits at 10%.

More than a year after American International Group (AIG) reached the brink of collapse, insurance buyers are still using it to lay off their risk. A survey by Barclays Capital (BCS) find that 80% of commercial buyers use Chartis, the property/casualty unit of AIG.

Since the damage to AIG in 2008 was precipitated by the company's financial products group rather than its insurance operation, the use of Chartis to cover a company's risk isn't a problem, as the division has long been successful for AIG, regardless of the name used.

TheStreet.com's Jim Cramer says Goldman and JPMorgan are acting terribly amid all the offerings and deals.

Why do Goldman Sachs (GS) (Cramer's Take) and JPMorgan (JPM) (Cramer's Take), the good ones, go down all of the time or act terribly? I think because the equity offerings of the bad ones are just too compelling and the universe of buyers of this merchandise is severely limited.

These stocks are limited because they are not worth the headline risk trouble. If they weren't being bashed by the president or taken to the woodshed by Congress or dumped on by Meredith Whitney, the most powerful bank analyst on earth, then maybe they would be worth owning. But the more successful you are, the worse it looks. Is Goldman Sachs supposed to get into the home mortgage business? Is it supposed to write a check for $10 billion to the government as a thank you for AIG (AIG) (Cramer's Take)? Is JPMorgan supposed to start raising its dividend when it would be branded as a fat cat?

Were we all too fast to blame AIG (AIG)?

The insurance giant's role in precipitating the worldwide financial crisis has been covered at length since it teetered on the edge of disaster in September 2008, thanks to a series of high-risk transactions executed through its financial products group. Well, Goldman Sachs (GS), which has recovered quickly from last year's woes and is already figuring out how to pay some hefty bonuses, may have played a larger role in these transactions than everyone realized.