UK’s refinancing timebomb

CORPORATE BRITAIN is facing a refinancing timebomb this year as more than £50 billion of bank debt expires during the biggest credit crunch in global history.

The soaring cost of capital and the paucity of available debt financing will squeeze even blue-chip companies which need to renew or restructure existing loan facilities.

According to the ratings agency Standard & Poor’s, a £140 billion debt mountain needs to be refinanced in the UK between now and 2011. Meanwhile, a cumulative total of €1.6 trillion (£1.5 trillion) of debt rated by S&P will mature across Europe between now and then.

Read moreUK’s refinancing timebomb

Ruble Falls to Record Low Versus Euro as Russia Weakens Defense

Dec. 29 (Bloomberg) — The ruble fell to a record low against the euro as Russia devalued the currency for the 12th time in seven weeks after the government forecast its first budget deficit in a decade.

The managed currency weakened 2.6 percent to 41.7245 per euro, the lowest since the European currency started trading in 1999. It fell 0.7 percent to 29.1797 versus the dollar, a four- year low. Bank Rossii allowed the ruble to fall 1.7 percent against its basket of 55 percent dollars and 45 percent euros, the most since the measure was introduced in February 2005, according to a central bank official who declined to be identified, citing bank policy.

Read moreRuble Falls to Record Low Versus Euro as Russia Weakens Defense

Motorola downgraded to junk status

Ratings agency downgrades Motorola on worries about the impact of the global financial crisis on mobile phones

Motorola fell into junk territory yesterday after Standard & Poor’s (S&P) downgraded the telecoms company.

The ratings agency cut Motorola’s rating by two notches to BB+ from BBB, putting the company one notch below investment grade.

S&P blamed problems in Motorola’s mobile phone business, saying that the ratings action reflected “continual operational challenges … which are not likely to be reversed over the intermediate term”.

Read moreMotorola downgraded to junk status

Pakistan Agrees to $7.6 Billion IMF Bailout Program

Nov. 15 (Bloomberg) — Pakistan agreed to a $7.6 billion loan package with the International Monetary Fund, to help the south Asian country avert defaulting on its debt with the first such program in four years.

The loan “will be used for the balance of payments and to build our foreign reserves,” Shaukat Tarin, the finance adviser to the prime minister, said today at a televised news conference in Karachi. The IMF will give the loan in installments over 23 months at interest rate of 3.5 percent to 4.5 percent, he said.

Pakistan has been forced to seek funds from the IMF after its foreign-exchange reserves shrank 75 percent in the past year to $3.5 billion last week, the equivalent of one month’s imports, and a group of donor nations declined to provide funds.

“The IMF loan will help in stabilizing the economy only if the government shows the political will to implement the Fund’s program,” said Samiullah Tariq, head of research at InvestCapital & Securities Ltd. in Karachi. Pakistan’s civilian governments from 1988 to 1999 did not complete seven separate IMF loan programs because of “tough” IMF conditions, he said.

Read morePakistan Agrees to $7.6 Billion IMF Bailout Program

US May Lose Its ‘AAA’ Rating

The United States may be on course to lose its ‘AAA’ rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.


Source: YouTube

“The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system” and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.

“In the United States there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off,” Hennecke told CNBC.

In order to solve or stem the economic slowdown, Hennecke suggested the US would have to radically reduce spending across all sectors and recall all its troops from around the world.

As for a stimulus package, there is not much of an industry left to stimulate back into life, Hennecke said.

10 Nov 2008 | 07:49 AM ET

Source: cnbc

U.S. Stocks Post Biggest Post-Election Drop on Economic Concern


Traders work on the floor of the New York Stock Exchange in New York, Nov. 5, 2008. Photographer: Ramin Talaie/Bloomberg News

Nov. 5 (Bloomberg) — The stock market posted its biggest plunge following a presidential election as reports on jobs and service industries stoked concern the economy will worsen even as President-elect Barack Obama tries to stimulate growth.

Citigroup Inc. tumbled 14 percent and Bank of America Corp. lost 11 percent as the Standard & Poor’s 500 Index and Dow Jones Industrial Average sank more than 5 percent. Nucor Corp., the largest U.S.-based steel producer, slid 10 percent after bigger rival ArcelorMittal doubled production cuts amid slowing demand. Boeing Co., the world’s second-largest commercial planemaker, lost 6.9 percent after UBS AG forecast a 3 percent drop in global air traffic next year.

Read moreU.S. Stocks Post Biggest Post-Election Drop on Economic Concern

Federal Reserve Cuts Rate to 1% to Avert Prolonged Recession

Oct. 29 (Bloomberg) — The Federal Reserve cut its benchmark interest rate by half a percentage point to 1 percent, matching a half-century low, in an effort to avert the worst U.S. economic downturn in the postwar era.

“Downside risks to growth remain,” the Federal Open Market Committee said today in a statement in Washington. “Recent policy actions, including today’s rate reduction, coordinated interest-rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth.”

Central bankers worldwide are trying to revive credit and stop a self-reinforcing downturn in consumer spending and bank lending from triggering a global recession. Today’s decision follows the half-point reduction the Fed coordinated with the European Central Bank and four other central banks on Oct. 8. Borrowing costs were pared today in Norway and China.

Read moreFederal Reserve Cuts Rate to 1% to Avert Prolonged Recession

Dow’s 2nd best day ever

Dow rises 11% on big rally, but October is still shaping up to be one of the worst months in Wall Street history.

NEW YORK (CNNMoney.com) — The Dow rallied as much as 906 points during Tuesday’s session, as investors dove back into stocks near the end of one of the worst months in Wall Street history.

The Dow Jones industrial average (INDU) added 889 points after having risen as much as 906 points earlier in the session. It was the Dow’s second-biggest one-day point gain ever, following a 936-point rally two weeks ago. The advance of 10.9% was the sixth-biggest ever.

The Standard & Poor’s 500 (SPX) index gained 91.6 points or 10.8%, its second-biggest one-day point gain ever and its fifth-best one-day percentage gain.

The Nasdaq composite (COMP) rose 143.6 points or 9.5%. On a percentage basis, it was the fourth-best one-day gain ever for the tech-fueled Nasdaq. But on a point basis, it didn’t crack the top 10.

The broad advance occurred as the two-day Federal Reserve meeting got underway, with a decision on interest rates expected Wednesday afternoon. Policymakers are widely expected to cut a key short-term interest rate.

Stocks ended Monday’s session at the worst levels in more than five years, with the major gauges down more than 25% for October. Global markets had fallen too, as investors worldwide bailed out of stocks amid the credit crisis and weak economy.

Read moreDow’s 2nd best day ever

Russian default risk tops Iceland as crisis deepens

Russia’s financial crisis is escalating with lightning speed as foreigners pull funds from the country and the debt markets start to price a serious risk of sovereign default.


S&P has cut its outlook for Russia, which has been propping up the rouble: a man on a phone passes a board displaying currency exchange rates in Moscow Photo: Reuters

Russia’s financial crisis is escalating with lightning speed as foreigners pull funds from the country and the debt markets start to price a serious risk of sovereign default.

The cost of insuring Russian bonds against bankruptcy rocketed to extreme levels yesterday. Spreads on credit default swaps (CDS) reached 1,123, higher than Iceland’s debt before it sought a rescue from the International Monetary Fund.

Moves by Hungary, Ukraine and Belarus to seek emergency loans from the IMF have now set off a dangerous chain reaction across Eastern Europe.

Romania had to raise overnight interest rates to 900pc on Wednesday to stem capital flight, recalling the wild episodes of Europe’s ERM crisis in 1992. The CDS spreads on Ukraine’s debt have topped 2,800, signalling total revulsion by investors.

Rating agency Standard & Poor’s issued a downgrade alert on Russian bonds yesterday, warning that a series of state rescue packages worth $200bn (£124bn) could start to erode the credit-worthiness of the state.

Read moreRussian default risk tops Iceland as crisis deepens

Credit-Rating Companies ‘Sold Soul,’ Employees Said


Deven Sharma (R), president of Standard & Poor’s and Raymond McDaniel, chairman and CEO of Moody’s Corporation listen to remarks by committee members as they display a quote on a screen during the House Oversight and Government Reform Committee hearing on “Credit Rating Agencies and the Financial Crisis,” on Capitol Hill in Washington October 22, 2008.

Oct. 22 (Bloomberg) — Employees at Moody’s Investors Service told executives that issuing dubious creditworthy ratings to mortgage-backed securities made it appear they were incompetent or “sold our soul to the devil for revenue,” according to e-mails obtained by U.S. House investigators.

The e-mail was one of several documents made public today at a hearing of the House Oversight and Government Reform Committee in Washington, which is reviewing the role played by Moody’s, Standard & Poor’s and Fitch Ratings in the global credit freeze.

“The story of the credit rating agencies is a story of colossal failure,” Committee Chairman Henry Waxman, a California Democrat, said at the hearing. “The result is that our entire financial system is now at risk.”

Moody’s and S&P in recent months had to downgrade thousands of mortgage-backed securities, many of which were originally given top AAA ratings, as delinquencies on the underlying loans soared well beyond the companies’ estimates and home values fell faster than they expected.

Read moreCredit-Rating Companies ‘Sold Soul,’ Employees Said

House prices to plummet by 35% – the biggest ever fall in Britain

House prices will fall a record-breaking 35 per cent by next autumn, a leading firm of economists warned yesterday.

The collapse will be the biggest fall ever seen in this country.

The claim, from the consultancy Capital Economics, will horrify homeowners who face being plunged into negative equity.


Not needed: Estate agent boards piled up in a yard in Hull

According to the forecast, around £65,000 will be wiped off the value of the average home. At the height of the property boom last year the average home was worth £186,000. By next autumn it will be worth around £120,000.

Capital Economics had originally expected house prices to drop 35 per cent by the end of 2010.

But yesterday it amended this forecast in the light of recent economic turmoil. The consultancy still expects the same fall, but squeezed into a much shorter period.

Prices are then predicted to stagnate for 18 months before a tentative recovery begins in 2011.

Ed Stansfield, property economist at Capital Economics, said: ‘The sheer speed of adjustment is causing alarm.’


The housing market has been affected by the credit crunch that has frozen the world’s financial markets

Read moreHouse prices to plummet by 35% – the biggest ever fall in Britain

CDO Cuts Show $1 Trillion Corporate-Debt Bets Toxic

Oct. 22 (Bloomberg) — Investors are taking losses of up to 90 percent in the $1.2 trillion market for collateralized debt obligations tied to corporate credit as the failures of Lehman Brothers Holdings Inc. and Icelandic banks send shockwaves through the global financial system.

The losses among banks, insurers and money managers may spark the next round of writedowns on CDOs after $660 billion in subprime-related losses. They may force lenders to post more reserves against losses after governments worldwide announced $3 trillion in financial-industry rescue packages since last month, according to Barclays Capital.

“We’ll see the same problems we’ve seen in subprime,” said Alistair Milne, a professor in banking and finance at Cass Business School in London and a former U.K. Treasury economist. “Banks will take substantial markdowns.”

The collapse of Lehman Brothers, Washington Mutual Inc. and the three banks in Iceland prompted Susquehanna Bancshares Inc., a Lititz, Pennsylvania-based lender, to lower the value of $20 million in so-called synthetic CDOs by almost 88 percent last week.

Read moreCDO Cuts Show $1 Trillion Corporate-Debt Bets Toxic

Britain faces crisis as negative equity to reach 2 million

Estate agents signs outside a row of properties

Collapsing house prices are plunging 60,000 homeowners a month into negative equity, which means the country is on course for a worse crisis than the 1990s crash.

At current trends, 2m households will enter negative equity by 2010, outstripping the 1.8m affected at the bottom of the last housing slump.

New research from Standard & Poor’s, the ratings agency, coincides with evidence that banks are aggressively seizing homes whose owners have slipped just a few hundred pounds behind on their mortgage payments.

It is a further signal that the financial crisis is now infecting the real economy as hundreds of thousands of families face the prospect of being unable to move house because their home is worth less than the value of their mortgage.

Many more homeowners will now be afraid that the bank may suddenly repossess their property. Repossessions have soared to 19,000 in the first half of the year, up 40% on the previous six months. That figure is expected to rise to 26,000 in the second half of 2008.

Economists believe house prices will fall by up to 35% from their peak by 2010. This compares with a drop of only 20% in the early 1990s.

Read moreBritain faces crisis as negative equity to reach 2 million

South Korea Backs $100 Billion in Debt to Calm Markets

Oct. 19 (Bloomberg) — South Korea will guarantee $100 billion in bank debts and supply lenders with $30 billion in dollars to stabilize its financial markets.

The government will provide tax benefits for long-term equity and bond investors, while the Bank of Korea will buy repurchasing agreements and government bonds to boost won liquidity, the heads of the finance ministry, central bank and financial regulator said in a statement from Seoul. Policy makers held an emergency meeting on Oct. 17 to hammer out the plan.

South Korea is struggling with Asia’s worst-performing currency, a shortage of U.S. dollars and a stock market that has lost 38 percent this year. The guarantee on bank debts comes after Standard & Poor’s said last week it may cut the credit ratings of the nation’s largest lenders, which triggered the worst plunge in the won since the International Monetary Fund bailed the nation out in December 1997.

“They have to do that because the market was pushing them by attacking the Korean won,” said V. Anantha-Nageswaran, chief investment officer for Asia Pacific at Bank Julius Baer (Singapore) Ltd., part of Switzerland’s biggest independent money manager for the wealthy. “They know what the stakes are. The currency could completely careen out of proportion.”

Read moreSouth Korea Backs $100 Billion in Debt to Calm Markets

GM chief running out of time and options


If Rick Wagoner, chairman and chief executive of General Motors, fails to get a merger deal, he could go down in history as the executive who presided over GM’s demise. (Rick Wilking/Reuters)

DETROIT: Rick Wagoner is running short of time and options to save General Motors and salvage his legacy as the leader of the biggest automaker in the world.

With GM burning through cash and auto sales sinking to historic lows, Wagoner is pushing hard for a merger with Chrysler – in talks first reported by The New York Times a week ago – after testing the waters for a similar deal with Ford Motor.

That Wagoner is even considering a merger with one of his crosstown rivals illustrates GM’s precarious state.

Wagoner, the company’s chief executive since 2000 and chairman since 2003, has not granted interviews since the Chrysler talks were revealed. But Wagoner and GM’s president, Frederick Henderson, are convinced that the automaker is in dire need of the cash, additional revenue and cost savings that a merger could provide, according to several people with knowledge of the talks.

Read moreGM chief running out of time and options

Financial crisis: Countries at risk of bankruptcy from Pakistan to Baltics

A string of countries face the risk of “going bust” as financial panic sweeps Asia, Eastern Europe, and Latin America, raising the spectre of a strategic crisis in some of the world’s most dangerous spots.

Nuclear-armed Pakistan is bleeding foreign reserves at an alarming rate leading to fears that it could default on its loans.

There are mounting fears that Ukraine, Kazakhstan, and Argentina could all now slide into a downward spiral towards bankruptcy, while western banks exposed to property bubble across Eastern Europe have seen their share price crushed.

The markets are pricing an 80pc risk that Ukraine will default, based on five-year credit default swaps (CDS) – an insurance policy on a country being able to pay its debts.

The country’s banking system has begun to break down after years of torrid credit growth; its steel mills are shutting as demand collapses; and the political crisis is going from bad to worse.

Read moreFinancial crisis: Countries at risk of bankruptcy from Pakistan to Baltics

GM, Ford, Chrysler Face Bankruptcy Risk on Crisis, S&P Says

Oct. 10 (Bloomberg) — General Motors Corp., Ford Motor Co. and Chrysler LLC, the three biggest U.S. automakers, may be forced into bankruptcy as the global credit freeze damps U.S. sales, Standard & Poor’s analyst Robert Schulz said.

“Macro factors could overwhelm them at some point” even as GM, Ford and Chrysler vow to stick with their turnaround plans, Schulz, S&P’s lead automotive credit analyst, said today in a Bloomberg Television interview in New York. The companies said they have no plans to seek bankruptcy protection.

His assessment underscored the pressure on the industry as the worsening credit crisis makes it harder for buyers to get loans and dealers to finance their operations. S&P said yesterday it may further trim credit ratings for GM and Ford on forecasts for 2009 auto demand to fall to its lowest since 1992.

With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a “strategic” decision, Schulz said.

Read moreGM, Ford, Chrysler Face Bankruptcy Risk on Crisis, S&P Says

Mutual Fund Withdrawals a Record as Investors Flee

Oct. 9 (Bloomberg) — Investors pulled a record $52.1 billion from U.S.-managed stock and bond mutual funds in the past week, seeking the safety of government-insured bank deposits as the financial crisis worsened.

Shareholders took $43.3 billion from stock funds and $8.8 billion from bond funds in the week ended Oct. 8, according to data compiled by TrimTabs Investment Research in Sausalito, California. The exodus followed $72.3 billion of outflows in September, the most in a single month. Investors deposited $185.5 billion into bank accounts last month through Sept. 22, TrimTabs said, citing U.S. Federal Reserve data.

“People are scared,” Conrad Gann, TrimTabs’ chief operating officer, said in an interview. “This market is different from what we’ve seen before.”

The five largest diversified U.S. stock fund managers, including Fidelity Investments and Vanguard Group Inc., posted an average 28 percent loss this year through Oct. 6, about 2 percentage points worse than the Standard & Poor’s 500 Index, according to Morningstar Inc. Investors mostly switched into fixed-income through August, putting $97 billion into bond funds while withdrawing $74 billion from stock funds, TrimTabs said.

Read moreMutual Fund Withdrawals a Record as Investors Flee

Dow plunges 679 to fall to lowest level in 5 years

NEW YORK – Stocks plunged in the final hour of trading Thursday, sending the Dow Jones industrial average down 679 points – more than 7 percent – to its lowest level in five years after a major credit ratings agency said it might cut its rating on General Motors Corp.

The Standard & Poor’s 500 index also fell more than 7 percent.

The declines came on the one-year anniversary of the closing highs of the Dow and the S&P. The Dow has lost 5,585 points, or 39.4 percent, since closing at 14,198 on Oct. 9, 2007. The S&P 500, meanwhile, is off 655 points, or 41.9 percent, since recording its high of 1,565.15.

U.S. stock market paper losses totaled $872 billion Thursday and the value of shares overall has tumbled a stunning $8.33 trillion since last year’s high. That’s based on preliminary figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies’ stocks and represents almost all stocks traded in America.

Read moreDow plunges 679 to fall to lowest level in 5 years

Paulson: “Some financial institutions will fail.”

Dow slides 189 points despite global interest rate cuts

Dow Jones Industrial Average falls for six successive days, losing 14.7% of its value


Specialists check a screen on the floor of the New York Stock Exchange on Wednesday. Photograph: Richard Drew/AP

A gloomy day on Wall Street ended with another plunge in stocks after the US treasury secretary, Henry Paulson, warned that financial “turmoil” will not end soon and that more banks are likely to bite the dust.

Cuts in interest rates around the world failed to provide any lasting cheer as the fell by 189 points to 9,258. The index has fallen for six successive days, losing 14.7% of its value, amid signs of weariness and capitulation among investors.

Leading US retail chains including Target and JC Penney produced poor trading figures, fuelling concerns of a high-street slowdown. America’s largest aluminium producer, Alcoa, saw its shares slide by 15% as it cut back on capital spending after a dive in profits.

At a press conference to provide details of the US government’s $700bn bail-out package, the treasury secretary said it would be several weeks before the treasury is ready to begin cleaning up banks’ balance sheets by buying distressed mortgage-related assets.

In a prepared statement, Paulson used the word “turmoil” seven times to describe the financial environment and he made efforts to limit expectations on the rescue package: “One thing we must recognise – even with the new treasury authorities, some financial institutions will fail.”

Read morePaulson: “Some financial institutions will fail.”

Global Stocks Tumble: $2.5 Trillion Global Equities Erased

Credit Crisis Widens


Sam Farhood, left, and James Denaro work on the floor of the New York Stock Exchange prior to the Opening Bell in New York, on Oct. 6, 2008. Photographer: Andrew Harrer/Bloomberg News

Oct. 6 (Bloomberg) — Stocks tumbled around the world, the euro fell the most against the yen since its debut and oil dropped below $90 a barrel as the yearlong credit market seizure caused bank bailouts to spread. Government bonds rallied.

The Standard & Poor’s 500 Index retreated 5.9 percent, extending the worst weekly slump since 2001, as concern slower global growth will curb demand for commodities sent Alcoa Inc. and U.S. Steel Corp. down more than 7 percent. The MSCI Emerging Markets Index headed for its biggest loss in at least two decades and exchanges in Russia and Brazil halted trading. Europe’s Dow Jones Stoxx 600 Index had its steepest decline since 1987.

Today’s plunge erased about $2.5 trillion from global equities after the German government was forced to bail out Hypo Real Estate Holding AG, overshadowing the $700 billion U.S. Treasury plan to revive credit markets. The euro weakened 6 percent against the yen, the most since 1999.

Read moreGlobal Stocks Tumble: $2.5 Trillion Global Equities Erased

WaMu shares plummet 25%

WaMu Said to Approach Blackstone as Bailout Debated

Sept. 25 (Bloomberg) — Washington Mutual Inc.’s options may be dwindling as potential bidders shy away from making an offer because it’s not clear how much the proposed $700 billion U.S. bank rescue package will benefit the Seattle-based lender.

Five banks that were considering bids, including JPMorgan Chase & Co., have failed to make an offer in the week since WaMu put itself up for sale. WaMu next approached Carlyle Group and Blackstone Group LP, two people briefed on the matter said. Those talks are preliminary, and hinge on the government’s role in helping WaMu, which faces an estimated $19 billion in bad loans, the people said, speaking anonymously because the discussions are private.

“A WaMu deal is likely frozen until the bailout gets worked out,” said Steven Kaplan, a finance professor at the University of Chicago Graduate School of Business. “People aren’t in a hurry to make any decision until they know what’s coming out of Washington.”

WaMu is under increasing pressure to strike a deal as its stock sags and ratings companies pummel its debt. Standard & Poor’s yesterday cut WaMu’s rating for the second time in nine days, dropping it to CCC from BB-. WaMu’s regulator, the Office of Thrift Supervision, and the Federal Deposit Insurance Corp., which guarantees customer deposits, have declined to comment.

Read moreWaMu shares plummet 25%

Stocks rally on report of entity for bad debt

Stocks end sharply higher on report that government will create entity to hold banks’ debt

NEW YORK (AP) — Wall Street rallied in a stunning late-session turnaround Thursday, shooting higher and hurtling the Dow Jones industrials up 400 points following a report that the federal government might create an entity to absorb banks’ bad debt. The report also cooled investors’ fervor for the safest types of investments like government debt.

The report that Treasury Secretary Henry Paulson is considering the formation of a vehicle like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s left previously solemn investors ebullient. Wall Street hoped a huge federal intervention could help financial institutions jettison bad mortgage debt and stop the drain on capital that has already taken down companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc.

Read moreStocks rally on report of entity for bad debt

Wall Street’s Next Big Problem


WHEN I drove to the Beverly Hills offices of Drexel Burnham Lambert on Feb. 13, 1990, the last thing I expected to hear was that the investment bank where I worked was going under. Yet early that morning, we were told that the company was filing for bankruptcy. I was, to put it mildly, blown away. At the time, Drexel had $3.5 billion in assets and was the biggest underwriter of junk bonds.

It all seemed like a very big deal at the time. But what’s happening this week makes me pine for the good old days.

Read moreWall Street’s Next Big Problem

AIG falls 42% in cash scramble

Nation’s largest insurer races to raise capital after being hit by credit raters.

NEW YORK (CNNMoney.com) — Shares of American International Group tumbled Tuesday as the company scrambled to raise as much as $75 billion to keep itself afloat.

The pressure on the nation’s largest insurer reached fevered pitch on Monday night as the troubled insurer was hit by a series of credit rating downgrades.

The cuts could prove deadly to AIG (AIG, Fortune 500), forcing it to post more than $13 billion in additional collateral.Shares were down 42% in early morning trading, after falling more than 70% in early morning trading and losing 61% of their value the day before.

Read moreAIG falls 42% in cash scramble