Think of AIG as a sandcastle being lapped by encroaching waves. Rather than abandoning it for a new one on higher ground, a determined child may be able to repair the battlements by pouring on ever more sand until the tide finally recedes. The remaining heap may vaguely resemble the pristine structure that preceded the onslaught, but little of the original material will remain.

AIG's shareholders, who have seen the value of their holdings quadruple in three months, can only lay claim to those original grains of sand. The market is implying that the castle can resist those waves with far less reinforcement, and hence dilution, than seems realistic. Cheering the latest “good news” – yesterday's agreed sale of its Taiwanese operation – AIG's share price values the whole company at $30bn once government warrants for 80 per cent of it are counted.

If two remaining big businesses pledged against loans sell for the upper end of expectations (a combined $45bn) then a net $20bn may flow back to AIG. This, plus remaining assets such as property and casualty insurance and aircraft leasing, could form a going concern. But they would be swamped by a remaining $60bn or so in liabilities to taxpayers, not to mention tens of billions more to private lenders.