Skip to main content

Fed offers $85B in return for 80% stake in AIG


Seems like we can avoid another scene like that in AIA Singapore again. 

No rate cut was made. The Federal Reserve is readying a loan of $85B to AIG, in exchange for an 80% stake in the insurer. Barclays is buying some of Lehman's assets, where the US bankruptcy judge approves "automatic stay" status for JP Morgan to continue providing trade-clearing advances to Lehman's broker-dealer unit. WAMU is also up 16% due to talks of fresh interest from a large institution. 

Thus, has all these events salvaged the turbulence in Asia, and create a positive spur of sentiment for the international markets? Let's take a quick snapshot in early Asia and US closing markets in the morning.

All Ordinaries  Australia 4,843.4 8:28AM SGT Up43.600 (0.91%)
Nikkei 225 Japan 11,830.34 8:28AM SGT   Up220.62 (1.90%)
KOSPI  Korea 1,425.59 8:48 AM SGT   Up37.84 (2.73%)
S&P 500 US 1,213.59 Up20.89 (1.75%)
DJIA 11,059.02 Up141.51 (1.30%)
Nasdaq 100 1,724.08  Up18.62 (1.09%)


As mentioned on my earlier posts, the move of nationalising more private sectors into public sectors may mean that the longer term growth outlook for the US may be dampened for the longer term. In my opinion, this nationalization of AIG may be for good as it is natural that money making institutions will be not be sold, where only companies that are in losses will be sold in the name of privatisation. With AIG having a globally omnipresent diverse structure with a trilion dollars worth in assets, it could be one lucrative asset for the government to generate revenues. 

Lastly, I wonder if they may continue to sponsor Manchester United in 2009 again. ;) 
Labels:

Comments

Post a Comment

Popular posts from this blog

Financial Crisis Management

Back in the 80s, when the US government had to deal with a crisis where the Resolution Trust Corporation, which is a holding company formed and housed within the Treasury, to deal with distressed real estate that was funded by loans and savings, the strategy was deemed a sucess where it was later reused by the HK and Indonesian government during the asian financial crisis. This indeed managed to give immediate liquidity and confidence to the markets during such turbulent times. In addition, this came as a win-win situation for the governments, because as these distressed assets were bought in a 'fire-sale' price, which was significantly cheaper than its face value, the governments made profits from such transactions, where in today's case, the similar situation applies. The target of this plan for the purpose of restoring order in the banking system, so banks will remain confident to lend, as well as to free up funds for further lending and use when the economy grows.  Afte...
Post a Comment
Read more

Market Call

After much thoughts as to how my market calls should be made in order to create the best effect and authencity, here are some details that I would like you to know: All trades made on this  trading  account no. 77104 will be 'real' live trades. A report in the format (shown on the right) will be reported on a weekly and monthly basis. Trades and market calls made by me, are only for the purpose of reference, and is no indication for you to trade and follow.  Entry and exit of trades may be in a matter of minutes, therefore, I would urge readers to follow them closely or to backtrack the results with the use of their charts for authentication of results. See ya soon on market call.
Post a Comment
Read more

Elliott Wave FreeWeek Feb 12 to 18

Greetings, Our friends at Elliott Wave International have just announced the beginning of their wildly popular FreeWeek event, where they throw open the doors to some of their most popular paid services to non-subscribers for one week only. If you’re not taking part right now, you’re already missing the valuable opportunities your peers are getting for free. This unique opportunity only comes along once or twice a year. Learn more about EWI’s FreeWeek here Cheers
Post a Comment
Read more