Mar 22: Greg Peters on AIG backlash

Part 2: Greg Peters, head of global fixed income and economics research at Morgan Stanley, says the "backlash on the AIG front is critically important, as I think that's setting the tone. And so this public-private partnership [for buying toxic assets] is just that: a partnership. And so I think there's a real reluctance for investors to partner up with the government for, once again, fear of being trotted in front of Congress. And so the AIG, in and of itself, is a very big issue." Mr Peters says the "politicization" of government funding programmes may hurt their success. "We need to refocus on the main event, which is dealing with the housing problem, with the contraction in consumer credit problem, and keeping the financial system stabilized. And I think that was lost, and has been lost over the past month or so with this massive backlash around AIG, Merrill, et al. So I want to refocus onto the problem itself. And I think the markets would respond very favorably to that."