Tuesday, October 07, 2008

Updates and Miscellaneous on the Economic Crisis

The debate has started as I am finishing this collection. I am going down to see if John McCain's head explodes. Truth be told , the last headline might contain the real story of how we got into this mess: money for nothing and chicks for free?

Insurance giant AIG's role in market crisis probed

WASHINGTON (AP) - Executives at American International Group Inc. hid the full range of its risky financial products from auditors as losses mounted, according to documents released Tuesday by a congressional panel examining the chain of events that forced the government to bail out the conglomerate.

Amid the rising losses, Federal regulators at the Office of Thrift Supervision warned in March that "corporate oversight of AIG Financial Products ... lack critical elements of independence."

At the same time, AIG's auditor, Pricewaterhouse Cooper confidentially warned the company that the "root cause" of its mounting problems was denying internal overseers in charge of limiting AIG's exposure access to what was going on in its highly leveraged financial products branch.

2 firms selected for mortgage securities program

"WASHINGTON (AP) - The Treasury Department has picked two financial institutions to manage a program it unveiled last month to provide support for beleaguered mortgage-backed securities.

The government announced Friday it was hiring London-based Barclays Global Investors and State Street Bank and Trust Co. of Boston to manage its program to purchase mortgage-backed securities."

Retirement accounts have lost $2 trillion

"WASHINGTON (AP) - Americans' retirement plans have lost as much as $2 trillion in the past 15 months, Congress' top budget analyst estimated Tuesday.

The upheaval that has engulfed the financial industry and sent the stock market plummeting is devastating workers' savings, forcing people to hold off on major purchases and consider delaying their retirement, said Peter Orszag, the head of the Congressional Budget Office.

As Congress investigates the causes and effects of the financial meltdown, the House Education and Labor Committee was hearing from retirement savings and budget analysts on how the housing, credit and other financial troubles have battered pensions and other retirement funds, which are among the most common forms of savings in the United States."
Iceland pays price for rapid economic growth

"LONDON (AP) - As the world suffers a hangover from the financial excesses of the past few years, the tiny island nation of Iceland has a bigger headache than most.

The Nordic country was until recently lauded for its rapid generation of wealth despite its small stature on the world stage, with the deregulation of the domestic financial market in the 1990s fueling a stock market boom that in turn underpinned an acquisition spree across Europe by cash-rich Icelandic banks and companies.

But that very success could become its downfall. The country's banking sector has grown to dwarf the rest of the economy with assets at nine times annual gross domestic product of 14 billion euros ($19 billion), leaving Iceland heavily exposed to the global credit squeeze."

US 'casino' mentality blamed for planet's meltdown

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