Several weeks ago, I did a blog entry looking at American International Group's appalling accounting. There are serious questions about how this company claimed to be solvent when it was stopping people inside from properly valuing its liabilities.

It was a disturbing picture but now we are seeing how bad it is with the New York Times reporting that AIG is rapidly running through the $123 billion emergency loan put up by the Federal Reserve. This raises three questions. The first two are obvious: where has the cash gone and is it filling in a hole created by irregular accounting?

But the third question is even more important: is there enough money in the system to bail out the world's biggest insurance company with its businesses entangled in the financial industry right around the world?

If there isn't, the knock-on effects to the world's financial system are too awful to contemplate.