Stories related to: credit crisis

American International Group posted a record-breaking $7.8 billion first-quarter loss yesterday, reports the Wall Street Journal . The insurance giant blamed the poor results on the sagging housing market, the credit crunch and the see-sawing stock market. It announced plans to raise $12.5 billion to patch up the damage to its balance sheet from heavy writedowns. More »

The House today shrugged off a veto threat from President Bush and passed a wide-ranging rescue plan for US homeowners, Reuters reports. The centerpiece of the legislation would allow people to trade in risky, fast-rising mortgages for more stable government loans. The $300 billion measure would help an estimated 500,000 homeowners at risk of foreclosure. More »

The US is emerging from the credit woes triggered by the turmoil over subprime mortgages—despite the continuing wave of foreclosures across the nation, according to Treasury Secretary Henry Paulson. Paulson, in the most positive comments yet from the White House on the nation's economic troubles, in part credited the federal bailout of Bear Stearns, reports the Wall Street Journal. More »

As the US teeters on the brink of recession and most investors remain sidelined by the credit crunch, Warren Buffett is poised to spend more than $40 billion to scoop up bargains. Berkshire Hathaway rose 22% over the last 12 months while other stocks sputtered, and now, Bloomberg reports, the company is one of the few with the cash on hand to profit from a bear market. More »

Deutsche Bank posted its first quarterly loss in 5 years today, reflecting the impact of the credit crisis on its investment banking activities. Germany's largest bank reported a net loss of $220 million and admitted that the short-term outlook for the firm remained highly uncertain. Deutsche also took $4.2 billion in writedowns, writes the Financial Times . More »

Credit Suisse has announced it lost a mammoth $2.1 billion in the first quarter, reports the Financial Times. The Swiss banking group, which until recently appeared to have escaped the worst of the credit crunch, continued to post strong earnings from its private banking sector—but that wasn't enough to outweigh writedowns of $5.2 billion. More »

In a sign of just how bad the credit crisis has become, Deutsche Bank has forbidden its employees from using expense accounts to pay for brothel visits and hotel porn, the Independent reports. It's unclear if execs have been seeking relief from subprime woes—the German giant has written down $4 billion—in fleshier pleasures, the paper adds. More »

The credit crunch isn't such a big deal if you're rich, the Financial Times reports. New figures show the number of millionaires grew quickly last year, to 8 million worldwide, and that the wealthy are getting richer relative to their compatriots. More »

Venture capitalists’ investments declined 5% in the first quarter to $7.1 billion, compared with $7.5 billion this time last year, suggesting entrepreneurial concerns over startups in a troubled economy, the AP reports. The change marks the first year-to-year dip since late 2005. Still, the figure was the fifth-largest for a single quarter since 2001. More »

Royal Bank of Scotland is preparing to issue new stock after conceding it was facing serious cash flow problems. After consulting with the Treasury and the nation's financial oversight authority, Britain's second-largest bank is planning a rights issue for around $24 billion to rebuild its capital reserves. The move may trigger a wave of other appeals for help, writes the Telegraph . More »

American communities once reliant on the manufacturing industry are increasingly being supported by the growing healthcare sector, the Wall Street Journal reports. Over the past 10 years, the former paper-mill town of Bangor, Maine, lost 3,700 factory jobs—but gained 3,500 healthcare jobs, a hopeful sign for an economy teetering on the brink of recession. More »

Group of Seven finance ministers ended 3 days of meetings in Washington yesterday by endorsing a plan to create greater transparency and oversight in financial markets to avert future crises, but no emergency measures to stem the current one. Despite a downbeat report on the likelihood of worldwide recession, and even hunger riots as the cost of food continues to soar, responses to the credit crisis remain national responsibilities, writes the Wall Street Journal . More »

Ailing bank Wachovia will get a $6 billion-$7 billion shot in the arm from outside investors, the Wall Street Journal reports. Specifics of the capital infusion, designed to help the company recover from the credit crisis, haven’t been finalized. Details may be revealed when the company reports first-quarter earnings Monday; it moved the announcement up from Friday without explanation. More »

The Bank of England today cut its benchmark interest rate 25 basis points to 5%, reports Bloomberg, hoping to keep the nation’s economy out of recession. Despite the third cut since December, BoE’s rate remains the highest among the Group of Seven industrialized nations; policymakers have drawn fire for being “behind the curve” in responding to the credit crisis. More »

The International Monetary Fund says world economic growth will slow drastically in the next two years. In its new report, the IMF states that the world downturn will be led by the US, which will slip into a "mild recession" this year, the BBC notes. The report calls the current crisis "the largest financial shock since the Great Depression." More »

Venture capital in Silicon Valley is drying up as angel investors, wary of the fickle stock market and tightening credit markets, become more cautious with their cash, the New York Times reports. Their hesitance has slowed the pace of job growth and expansion at tech start-ups, and has dramatically cut the number of firms going public. More »

UK home prices tumbled 2.5% in February—the largest fall since the 1990s—as the International Monetary Fund warned that Britain could face a housing crisis similar to the US. British PM Gordon Brown insisted yesterday the decline was containable, but the Bank of England is now under serious pressure to cut interest rates at its meeting tomorrow, the Times of London reports. More »

Slowing sales, rising inflation, and skyrocketing energy costs have small-business owners cutting back on hiring and tightening their spending as they brace for a continuing economic slowdown, USA Today reports. A National Federation of Independent Business survey puts small-business confidence last month at its lowest quarterly point since 1980. More »

Homeowners struggling to avoid foreclosure are about to get a boost from the Federal Housing Administration. The FHA commissioner is expected to announce plans to expand an aid program that will allow borrowers saddled with negative equity to write down part of their mortgages and refinance their homes with cheaper FHA-insured loans, reports the Wall Street Journal. More »

The Democratic Party of Japan has accepted a new central banker just in time for the crucial meeting of G7 finance leaders in Washington on Friday, reports the International Business Times . The top spot has been vacant since March 19, leaving the bank vulnerable during an unsteady economic time. Masaaki Shirakawa is expected to be formally nominated today as Bank of Japan chief. More »