Bailout fund top up for US insurance giant AIG
Al Jazeera English
Transcript
for decades it was one of the world's biggest and most important companies now almost 50 years after AIG morphed from a small asia-based operation into a global insurance giant it's turned in the biggest quarterly loss in Us corporate history The Firm ensured many of the Bad Assets that arose from the US mortgage crisis and AIG can't afford to pay out on all those policies the US Treasury still considers AIG too big to fail and is ifying the terms of a multi-billion doll bailout and adding a further 30 billion it's the fourth time the US authorities have stepped in to rescue AIG which has already received a whopping $180 billion in government Aid compare this to City Group which has taken 50 billion and Bank of America 45 billion the main stock market in New York was sharply lower in early trading on Monday dipping below 6,900 mainly because of AIG but the bad news didn't stop there with the insurance Giant on the economic front us construction spending was down sharply last month and in Europe one of the world's biggest banks HSBC turned in a huge loss and issued an $18 billion rights issue to raise money even a surprise increase in US consumer spending couldn't raise Spirits deep discounts as much as 90% off brought in the customers all right but badly hurt the bottom line of retailers John terret Al jazer New York
Florida hit by construction crisis 02 March 09
Al Jazeera English
Transcript
Miami is famous for its Skyline but lately it's not getting any higher LED amongst the highrose hotels and apartment blocks are dozens of abandoned construction sites developers have simply run out of money as credit from the banks to the developers and property buyers has dried up well what's happened is the a lot of the projects have stalled because the construction lenders are afraid that the people who agreed initially to close such as a lot of my clients uh might may not close so the um the lenders are wary to keep funding the developers with more money Robert Cooper is an attorney representing buyers who are trying to get their deposits back he's filed about 60 lawsuits so far against building companies who have failed to complete their projects Cooper says a lot of the money which was poured into Miami properties came from overseas so you've got people who had a broker the broker in Miami tell the broker in in Europe or or Kuwait or wherever it may be how great this is in as an investment and people you know were putting deposits down sight on scene not knowing what they were getting into Alie Perez is one of those foreign investors she's from Venezuela more than 3 years ago she invested $70,000 into a $300,000 property then about a year ago construction on her Investments stopped and she's heard nothing since they should out of respect and ethical obligation tell the owners what's happening and give them options to withdraw the money or in the project Florida is one of the states hit hardest by the US housing crisis in the Miami area foreclosures more than doubled last year to more than 56,000 and demand has collapsed with thousands of homes and investment properties lying empty it's unlikely the sounds of a construction boom will start up again anytime soon in Miami buyers seduced by the promise of a foolproof money-making condominium in one of the glitziest cities in the United States are now stuck with an investment on paper which may never become a reality Kath Turner Al jazer
March 2: Dow at First Close Below 7000 Since '97
Associated Press
Transcript
the Dow Jones Industrial Average has fallen below 7,000 for the first time in more than 11 years battered by the recession and worries about financial companies the market tumbled after insur AIG posted a staggering quarterly loss and the government agreed to inject another $30 billion into the company I think that the headline event was uh aig's reporting of a 61.7 billion loss and the need for additional Capital uh in addition to that we saw a venerable Bank HSBC say that it too needs to raise Capital the Dow Jones Industrial Average Hemorrhage 300 points and the session at 6763 broader stock indicators also declined the standard and pores 500 Index fell 34 points to 701 and the NASDAQ was down 55 points to 1323 as far as stocks have fallen analysts say more volatility is likely and the bottom has yet to be reached our technicians uh our chart readers in a sense are the ones who are saying that we believe that the market will probably bottom out between 625 and 675 on the S&P 500 so basically anywhere from uh 25 points to 75 points more to go to the downside the Dow last closed below the 7,000 level on May 1st 1997 and the recent descent has been Swift it's taken only 14 sessions for the average average to go from above 8,000 to below 7,000 so far this year the Dow is down 22 1.5% Mark hamri the Associated Press
Bailouts Scaring Wall Street
CBS
Transcript
Wall Street bracing for some more bad news this morning CBS News correspondent priia David is at the New York Stock Exchange with more good morning Harry good morning to you Insurance giant AIG has just posted a record-breaking fourth quarter loss 61.7 billion dollar overseas markets traded poorly overnight on the expected earnings reports the Nik and the hangsang were both off almost 4% here in the US the Futures are off 178 points the market is expected to open lower this morning as the government continues to pour billions of taxpayer dollars into bailing out insurance giant AIG aig's $62 billion loss today is the largest since Time Warner Cable's $54 billion drop in 2002 AIG had been in talks with the government on a revised bailout that now adds $30 billion in Aid to its existing $150 billion rescue package on Friday the government agreed to take up to a 36% stake in City group as part of a revised plan the continued Financial Gloom has even investor Warren Buffett one of the industry's leading bulls turning into a bear the economy will be in shambles throughout 2009 Buffett wrote and for that matter probably well beyond now Warren Buffett does point out the country has faced worst challenges in the past including major Wars and the Great Depression in all of these cases Buffett says without fail we've overcome them that's the word from the optimistic INF famous investor and just to reiterate the government is pouring another $30 billion into AIG Harry all right thanks very much priia David at the New York Stock Exchange joining us from Washington Economist Peter macei good morning sir good morning 30 billion more for AIG and top of 150 billion tarp money by the billions and billions and hundreds of billions is there any end to the amount of money that these financial institutions are going to need to stay propped up with the policy the Obama admin ministration is pursuing no he's not dealing with the fundamental problem in the market and that is all these uh mortgages that are failing and the free fall and housing prices which is creating the losses that AIG Mis Finance because it guarantees the mortgage back Securities along with the fact that it's good businesses are now suffering because no one has confidence in the AIG insurance companies so people are steering away from it it's losing business the company's melting down so these Banks nationalized well if you nationalize them you still have the same problem that unless you change your overall approach to financial markets the basic packages for the companies fail AIG tried to sell its good businesses but the buyers couldn't get credit because the financial markets are not there so in the end is the real problem is the underlying problem on this still the same problem that we started with 9 or 12 months ago the collapse of the housing market exactly and the mortgage back Securities the mortgages and so forth the federal government is refusing to create a bad Bank like the resolution trust that we had in the savings loan crisis to sweep all these Securities off the books of the banks work them out do triage and put a floor under the housing market until that's done these one-offs at City Bank Bank of America AIG one after another will fail we'll end up putting $2 trillion into all this instead of 750 billion before we're done Warren Buffett in his letter to investors over the weekend said it describes the economy as being in a shambles is there a light anywhere as far as you can see on the horizon no I don't I don't believe the stimulus package will be nearly enough because it's poorly structured and I believe that Obama's plans to raise taxes while we can discuss the merits of who should pay taxes and how income should be distributed is very wrong-headed at this time Timothy G's Financial stability plan scared the market uh his Obama's stimulus plan scared the market and now Obama's budget has scared the market the Obama people should understand what Bill Clinton learned to listen to the markets they're a good sounding ground for what you're proposing Peter Maurice as always we thank you for your time this morning thank you sir take care [Music]