THE NEW VILLAGE RADIO  

Show Notes

• Archived Blog Post

  Date / Time: 11/12/2008 2:38 AM UTC

  CRISIS CLAIMS MORE US VICTIMS? CANADA LAY OFF AS WELL?
  

  The credit storm swept through Wall Street and Main Street with renewed virulence on Monday as AIG and Fannie Mae reported huge losses, a leading US retailer filed for bankruptcy and multinationals such as DHL cut thousands of jobs.
  
  The bad news from both the financial and corporate sectors underlined the broadening of a crisis that claimed its first victims among banks and insurers but has now spread through the global economy.
  
  Robert Zoellick, president of the World Bank, was set to announce on Tuesday a big increase in financial support for developing countries caught up in the credit crisis. The move comes ahead of this weekend’s G20 summit on the world economy, which will bring together leaders from leading industrialised and developing nations. The S&P 500 index on Monday fell 1.3 per cent as investors reacted to the poor performance of sectors ranging from insurance to logistics, and the announcement that the US electronics retailer Circuit City had filed for bankruptcy protection.
  
  The retreat in stock prices came despite a 10 per cent jump in the shares of AIG, which confirmed details of a new $150bn government bail-out package. News of the federal rescue, which comes less than two months after the Federal Reserve lent AIG $85bn to prevent its collapse, overshadowed the insurer’s announcement of a $24.5bn third-quarter loss.
  
  AIG’s ailing financial health prior to the government intervention was highlighted by a $7.5bn quarterly writedown in its troubled financial services unit. The company has recorded more than $31bn of credit-related writedowns since the crisis began.
  
  Fannie Mae, the mortgage finance group that was nationalised in September, on Monday added to the gloom, reporting a record $29bn quarterly loss.
  
  The company warned that it might require further government funds to avoid a collapse.
  
  Circuit City became the largest US chain store to fall victim to the current crisis, as it filed for Chapter 11 protection. A week ago, it said it would close a fifth of its more than 700 stores, with the loss of some 7,000 jobs.
  
  DHL, the logistics group, announced 9,500 job cuts and is scrapping its express package delivery business within the US.
  
  Nortel, the Canadian maker of telecommunications equipment, was also downbeat, reporting its largest quarterly loss since 2001 and revealing 1,300 job cuts. The company said the cost cuts should save $400m a year and would help cushion the blow of dwindling orders.

  • Tags:
  • MASS LA OFF FOR USA
  • Permalink