(Sep 15, 2008) We may be on the verge of a stock market crash reminiscent of 1929.

I was watching a special CNBC program on the financial crisis when the news came across that Moody's had downgraded the Insurance giant AIG (American International Group.)

This company was already on the ropes Monday when its stock crumbled to $4.75 from $11, %60 in one day. It was down from a $70 52-week-high. The company had gone to the Fed for a bailout. It was estimated it needed $40 billion.

Because of the Moody's downgrade, it emerges that it will need alot more money to avert bankruptcy. This is a massive company that holds the pensions of millions of employees. A money manager estimated that a trillion dollars would be lost if AIG declares bankruptcy. The whole world financial system could be taken down. He said banks in the Far East were already acting like this is inevitable, and the collapse already has been set in motion.

As you can imagine, the CNBC commentators were frantic.