The morning's headline at MarketWatch reads, "AIG details $105 billion in payouts", but it might as well read, "AIG funnels taxpayer funds to counterparties".

Well, at least that's the case as far as I can tell (and I'm far from an expert on the ever-growing AIG bailout story). Apparently, AIG's payouts of bailout funds to its counterparties is great news; the "blue chip penny stock" is up over 60 percent (about 30 cents) in today's trading.

Here's more from MarketWatch:

"American International Group revealed on Sunday details of $105 billion of government funds that it paid to U.S. and international banks including Goldman Sachs, Deutsche Bank and Societe Generale.

The cash paid to AIG's so-called counterparties was used to cover collateral payments, cancel derivatives contracts and meet obligations at its securities lending business.

Now majority-owned by the government, AIG (AIG) has received more than $170 billion in bailout funds to keep it in operation since mid-September, when it found itself on the verge of collapse. Most of the leading U.S. and European banks were represented on the list of recipients of AIG payouts. Goldman Sachs Group (GS) got the biggest single total, receiving $12.9 billion."

Of course, no such story would be complete without an ex-government employee to vouch for the soundness of this ongoing AIG bailout. I mean, without it we'd all be totally screwed right?

Take it away Bloomberg:

"Banks that bought credit-default swaps or traded securities with AIG got $22.4 billion in collateral, $27.1 billion in payments from a U.S. entity to retire the derivatives, and $43.7 billion tied to the securities-lending program, AIG said yesterday in a statement. States, including California and Virginia, got $12.1 billion tied to guaranteed investment contracts.

"It puts a sour taste in the American taxpayer's mouth, but you have to look at that in terms of the bigger picture," said Donald Powell, chairman of the Federal Deposit Insurance Corp. from 2001 until 2005. "If you're going to have any chance of recovery you probably have to stay with it."

Government has delivered us from the market's evil wrath. Prosperity is just around the corner!

As you may well know, this latest disclosure comes hot on the heels of yesterday's outrage over executive bonuses (to be paid out with taxpayer funded bailout money) at AIG.

Related articles and posts:
1. Goldman Sachs wins big in secret bailout - Clusterstock.
2. AIG: is the risk systemic? - Big Picture.
3. The myth of systemic collapse - Real Clear Markets.
4. Hugh Hendry: AIG is no longer with us - Finance Trends.