Splitting up and the the risk that comes with this

Implications: Financial firms grew over the past decade as apparent disparate firms were cobbled together. The idea may have been to offset the risk - each part of the firm operating on a slightly different schedule of the economic cycle.

Analysis: Well the idea was smart.  At the time that is. What happens when you get a perfect storm? When the financial market as a whole is threatened then there is no shelter.

Bankers are famous for lending you an umbrella when the sun is shining and taking it back when the rain starts.  Well, right now its suddenly more than raining.

The breakup of AIG - or at least the splitting off of ILFC - is fraught with risk.  ILFC is exposed to some of the nastiest parts of business at this point - specifically the airline industry. The current situation is that every airline is hurting. Those bodes ill for leasing firms that must be able to finance assets like planes cheaper than an airline can. ILFC makes its money between its cost of capital and that of an airline.

Can ILFC gets cheap capital without AIG?  Could ILFC get capital more cheaply than airlines?  Its not such an obvious call.  Especially when so many planes are headed back to the desert with one airline bankruptcy after another. Would you lend your money to ILFC - even if they are world's biggest and best airplane leasing firm? 

Its a risky play and no fault of ILFC whatsoever. Right now the perfect storm is only growing bigger and nastier.