In two astonishing pieces of news, giant insurer AIG will receive an $85 billion loan from the fed in return for an 80% interest…

The precise details of the government's plans were still being formulated late Tuesday. The primary option being hammered out involved the Fed providing AIG with a short-term "bridge" loan of $85 billion, according to people familiar with the situation. In exchange, the government would receive warrants in AIG representing the right to buy its stock, under certain conditions. That could put the government in a position to potentially control a private insurer, a historic move, particularly considering that AIG isn't directly regulated by the federal government.

…and Barclay's will buy Lehman Brothers core North American businesses for $1.75 billion. This will preserve 9000 jobs.

The new plan enables Barclays to buy much of Lehman's securities business without taking the risk of further losses on the firm's commercial real estate and mortgage assets; but it is unclear how many of Lehman's 26,200 employees will keep their jobs. Early estimates pin the number at about 9,000 to 10,000.

So what does this all mean? Well it is a short-term bandaid for the markets. It prevents the nearest-term possible crisis. Longer term it doesn't solve much and the idea of the Federal government controlling the country's largest insurance company cannot be a good thing over time. In terms of Maui real estate, this will quell some concerns buyers have over the general state of the financial markets, but only for a short time.