October 3, 2008 (Friday): Bailout Bill Becomes Law; AIG Burns Through Loan

Published Oct. 3, 2009 at 4:00 a.m.

Bailout Bliss

After rejecting an earlier version of the $700 billion bailout bill on Monday, the House of Representatives changes course today and approves the plan. Having spent most of the week lobbying for it, President Bush immediately signs the bill into law. Monday’s stock market drop after the House’s first rejection convinced lawmakers that more damage awaited if the bill collapsed. (For more on this news, click here, here and here.)

AIG Angst

The troubled insurance giant American International Group says it has already used $61 billion of an $85 billion emergency loan from the Fed. The company plans to sell off most of its assets in order to pay the debt, but it has used the loan more quickly than anticipated. In a conference call with analysts, Edward Liddy, the company’s CEO, calls the question of what’s needed for AIG to pay back the Fed and remain sufficiently capitalized “a Rubik’s cube.” (For more on this news, click here, here and here.)

Vanishing Act

The Department of Labor reports a ninth straight month of job losses today, with September taking the prize. The economy shed 159,000 jobs in September 2008, the most of any month since March 2003. 2008 has seen 760,000 jobs disappear so far, and the latest figures indicate that the economy and employment outlook will remain harsh well into 2009. (For more on this news, click here and here.)

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Back | Read more at Smart Money