jakncoke
03-02-2009, 08:48 AM
(CNN) -- Wall Street was braced for fresh punishment Monday with the benchmark Dow Jones sliding below 7,000 points straight off the opening bell after U.S. insurance giant AIG revealed monumental quarterly losses of $62 billion.
AIG's quarterly losses amounted to some $460,000 per minute.
1 of 2
AIG's announcement came hours after the U.S. government announced a $30 billion lifeline for the ailing company on top of $150 billion it has already received in bailout funding.
Wall Street was already teetering on the the edge of 12-year lows after bruising selloffs Friday.
The bleak financial outlook prompted dismal trading sessions in Europe and Asia.
In London, the FTSE dropped more than 4 percent in morning trading to hit six-year lows -- with banking stocks leading the slide. By 1410 GMT, the FTSE had pared some of its losses, down 3.6 percent.
HSBC shares shed up to 20 percent in value after revealing a 62 percent slump in profits to $9.3 billion and plans to bolster its capital base through a $17.7 billion shares issue. Watch HSBC boss discuss profit slump ยป
Elsewhere, Paris' DAX was down 3 percent while Frankfurt's DAX was down 2 percent.
In Asia, Japan's Nikkei average finished the day down 3.8 percent, while Australia's All Ordinaries index closed down 2.8 percent. In Seoul, the KOSPI lost 4.2 percent and the Hang Seng index in Hong Kong dipped 3.8 percent.
AIG, which had 74 million customers at the end of 2007, received government funding totaling $123 billion in September when bad mortgage debts left it on the brink of collapse.
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That sum was increased to $150 billion in November when the government revised its bailout package. AIG shares have lost 99 percent of their value in the past 12 months.
In a statement issued Sunday, the U.S. Treasury Department said the $30 billion in extra funding for AIG would "help stabilize the company, and in doing so help stabilize the financial system."
Despite AIG's results -- the largest quarterly loss in corporate history, amounting to around $460,000 per minute -- analyst Robert Haines of CreditSights said letting the insurer fail was not an option because of the consequences for the wider financial system.
"The government really does not have the option of letting AIG totally blow up," Haines told CNNMoney.com. "The counterparties on most of the book are (European) banks that would be hammered if the U.S. walked away. Hopefully, the third bailout will be the charm."
Aside from AIG's problems, a slew of U.S. economic data due to be released this week -- including reports on housing, consumer spending, government spending, bank rescue efforts, manufacturing and the labor market -- is expected to provide further evidence of a deepening malaise at the heart of the world's largest economy.
wow just wow :/, I wonder what the record for largest qtr loss in corporate history was before AIG lost 62 billion
AIG's quarterly losses amounted to some $460,000 per minute.
1 of 2
AIG's announcement came hours after the U.S. government announced a $30 billion lifeline for the ailing company on top of $150 billion it has already received in bailout funding.
Wall Street was already teetering on the the edge of 12-year lows after bruising selloffs Friday.
The bleak financial outlook prompted dismal trading sessions in Europe and Asia.
In London, the FTSE dropped more than 4 percent in morning trading to hit six-year lows -- with banking stocks leading the slide. By 1410 GMT, the FTSE had pared some of its losses, down 3.6 percent.
HSBC shares shed up to 20 percent in value after revealing a 62 percent slump in profits to $9.3 billion and plans to bolster its capital base through a $17.7 billion shares issue. Watch HSBC boss discuss profit slump ยป
Elsewhere, Paris' DAX was down 3 percent while Frankfurt's DAX was down 2 percent.
In Asia, Japan's Nikkei average finished the day down 3.8 percent, while Australia's All Ordinaries index closed down 2.8 percent. In Seoul, the KOSPI lost 4.2 percent and the Hang Seng index in Hong Kong dipped 3.8 percent.
AIG, which had 74 million customers at the end of 2007, received government funding totaling $123 billion in September when bad mortgage debts left it on the brink of collapse.
Don't Miss
HSBC set for shares issue as profits slide
CNN/Money: U.S. takes another crack at AIG rescue
Blog: Business 360
That sum was increased to $150 billion in November when the government revised its bailout package. AIG shares have lost 99 percent of their value in the past 12 months.
In a statement issued Sunday, the U.S. Treasury Department said the $30 billion in extra funding for AIG would "help stabilize the company, and in doing so help stabilize the financial system."
Despite AIG's results -- the largest quarterly loss in corporate history, amounting to around $460,000 per minute -- analyst Robert Haines of CreditSights said letting the insurer fail was not an option because of the consequences for the wider financial system.
"The government really does not have the option of letting AIG totally blow up," Haines told CNNMoney.com. "The counterparties on most of the book are (European) banks that would be hammered if the U.S. walked away. Hopefully, the third bailout will be the charm."
Aside from AIG's problems, a slew of U.S. economic data due to be released this week -- including reports on housing, consumer spending, government spending, bank rescue efforts, manufacturing and the labor market -- is expected to provide further evidence of a deepening malaise at the heart of the world's largest economy.
wow just wow :/, I wonder what the record for largest qtr loss in corporate history was before AIG lost 62 billion