Independent analysts are smelling something fishy:

American International Group is rapidly running through $123 billion in emergency lending provided by the U.S. Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.

Do I have to quote Inspector Renault from Casablanca?

They’ve already blown through $90 billion of their $123 billion loan, and there simply are not enough posh retreats in the world to generate a burn rate that fast.

It’s less than reassuring that they still haven’t said where that money has gone.

There are stories of conflicts within the insurance giant, and people who gave warnings being shunted to the side.

Expect more of this from the Hank Paulson, “Bail out my Buddies” plan.