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According to documents obtained by a congressional panel examining Tuesday the chain of events that forced the government to bail out the conglomerate, executives at the American International Group Inc. (AIG) hid from its auditors the full range of risky practices at its financial products division even as losses mounted.          As losses from risky… Continue reading Documents Reveal AIG Hid Risk Warning from Auditors

The Federal Reserve announced on Tuesday that it’s creating a special facility to help the $1.7 trillion commercial paper market. The Commercial Paper Funding Facility will buy unsecured and asset-backed commercial paper directly from eligible issuers. The operation will be supported by the Treasury Department, which will make a “special deposit” at the Federal Reserve… Continue reading Treasury and Fed Take Steps to Help Defrost Credit Markets

According to the J.D. Power and Associates 2008 “Homeowners Insurance Study” released on Monday, the gap in customer satisfaction between homeowners and auto insurance providers has steadily widened since 2004, with homeowners insurance customer satisfaction remaining essentially flat during the past five years.    Now in its eighth year, the study measures customer satisfaction with… Continue reading Satisfaction Gap between Homeowners and Auto Customers Widen

Bank of America Corp said on Monday it would cut interest rates and principal on some troubled mortgages originated by Countrywide Financial Corp as part of a settlement with state attorneys general that could be worth as much as $8.6 billion.    Bank of America, which bought Countrywide in July, reached an agreement with state… Continue reading BofA Settlement over Countrywide Loans Could be $8.6B

Hartford Financial Services Group said on Monday that Germany’s Allianz will invest $2.5 billion in the U.S. life and property insurer, sending its shares up, even though the company cut its quarterly dividend and forecast losses.    Hartford lost half its market value last week amid worries it would have to raise capital to address… Continue reading Hartford Announces Deal with Allianz

If turmoil in the credit markets continues to impede a state’s access to financing, California Governor Arnold Schwarzenegger told the U.S. Treasury that his and other states may need emergency federal loans.    “This credit crisis has the power to grind the U.S. economy to a halt,” Schwarzenegger wrote in a letter e-mailed to Treasury… Continue reading Schwarzenegger Tells Treasury State May Need Emergency Loan

Governor Arnold Schwarzenegger vetoed half a dozen bills that could have raised costs in the state workers compensation insurance system. The system’s overhaul in 2004 was one of the governor’s biggest achievements.      The most significant of the bills sent to him by the Democratic-controlled Legislature would have doubled benefits paid to victims of on-the-job… Continue reading CA Governor Kills Comp Bill, Boost for Employers

The Labor Department said today that the economy lost 159,000 jobs last month — the biggest one-month drop since March 2003 and pushing the economy closer to a recession. The government reported that businesses from automakers to retail stores slashed payrolls last month. In addition to continued drops in construction and manufacturing jobs, the Labor… Continue reading Job Losses Reaches Biggest One-Month Drop Since ’03

American International Group Inc. (AIG) said it will focus on property and casualty coverage and sell “a number of extraordinary businesses.” “We have already been contacted by numerous strong, stable parties, and we expect that buyers will recognize the value of these properties,” said Chief Executive Officer Edward Liddy, the former Allstate Corp. head, in… Continue reading AIG to Concentrate on P/C, Says Liddy

Wells Fargo & Co announced on Friday an agreement to purchase Wachovia Corp for more than $15.1 billion, trumping a U.S. government-backed Citigroup Inc bid for some of its assets, in a deal that would bring Wells Fargo to the top ranks of national consumer banks. The proposed purchase would give Wells Fargo a strong… Continue reading Wells to Buy Wachovia, Citi May Challenge Bid