Why are financial stocks like AIG selling off like crazy right now?

Because the company still has a lot of issues. The little rally that you saw a few weeks ago is nothing but false speculation. The government still owns 70% of the company. Look at their earnings. It's horrible.

The simple answer is that there are more sellers than buyers.

It has been declining for several days, attracting more sellers and accelerating.

You'd be surprised how often this same question is asked every day for every stock. Much of the time, there is no answer other than that given.

Econ 101: in a free market, price is determed by supply and demand. There is very simply more supply right now than demand.

This is not a one-day "dip" as you suggest. This is steady price erosion. Face the facts that it may not be worth $40, develop a plan, place a Stop. Nobody knows why, and there doesn't have to be a "why."

The possible answers to "Why" are too numerous; take your pick. Because it ran up too far, too fast? Because the stock market is declining? Because the economy sucks? Because the Fed is printing too much money? Because the latest PMI survey was disappointing? etc., ad nauseum.

billionaire drowned in his pool