AIG: And Worse

We now find out that AIG was incompetent in unwinding its problems with government money. And for these its experts get bonuses??  AIG was unwinding its credit default swap positionswith government money by buying the assets that were underlying the positions.  This, in theory, makes sense.  Rather than pay increased collateral for the increased risk of default by AIG on the contracts, AIG buys the debt instruments insured by the credit default swap from the counterparty and cancels the swap contract.  The problem?? AIG overpaid for the underlying assets; paying par value for assets that have discounted value due to increased credit risk.  The counterparty then pockets the gain from the overpayment and taxpayers take the hit. Taxpayers break even only if the can resell the assets at par value when markets recover.  Even if the counterparty does not own the underlying assets it will go out and buy cheap and sell them dear to AIG that pays with government money.  To make a long story short: AIG is playing the sucker in these unwinding strategies with taxpayer money.  Can it get worse??