AIG (AIG) plans to sell its auto insurance unit, annuity operations, and aircraft leasing division. It sounds a lot like Lehman’s (LEH) plan to spin-off its commercial real estate pool and sell a majority interest in its asset management unit.

Wall St. did not buy into the Lehman strategic plan and sank the company like a plywood PT-boat. There was not even a slick of oil to show where it went down.

AIG is trading off nearly 70% at $4 today. Investors have realized that the insurance company will not get the $40 billion short-term loan it wants from the government. The Fed can see that AIG is in such trouble that it has no means to pay the money back.

AIG has been in talks with several private equity firms. All of them have sense enough to buy the parts of AIG in a week and not invest in the defiled whole. The Lehman bankruptcy taught the market that lesson in the space of three days.

AIG will release the details of its turnaround plan later today. There have been been so many inaccurate statements about the future from Merrill Lynch (MER), Morgan Stanley (MS), and Lehman, that management at large financial firms has lost its credibility.

AIG will be broken to pieces . It is only a matter of days.

Douglas A. McIntyre

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