CNBC reports AIG needs additional funds to cover a $60 B loss
AIG, the huge insurance and financial instituion is said to be asking the US government for further capital. The firm has already gotten 150 Billion in a bailout plan. They would need more as it is reported that they expect to report a 60 billion dollar loss next week. A loss of this size would likely lead to credit downgrade and possible bankruptcy. This is unlikely given the amount of funds already used to keep it alive. The problem with AIG is its tentacles extend a long way. Banks, insurance companies, hedge funds, etc all have exposure and unraveling the web from its dealings would be catostrophic to the financial industry.
This should not be good news for equities. It should also be a problem for other industries who are looking for handouts (like autos). With regard to currencies, I would think Yen crosses /dollar might be pressured as well. So far, the response is minimal, however.
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