American International Group Inc. said Wednesday it is working on resolving nearly $10 billion in soured investments without asking taxpayers for more money. The exposure stems from investments in mortgage and corporate debt assets, and may make it more difficult for the battered insurer to repay the federal government for its bailout package. AIG spokesman Nick Ashooh confirmed the company’s exposure Wednesday, after The Wall Street Journal reported the trades may be the first sign that the New York-based insurer has been gambling with its own capital.
Crude oil prices rise on Saudi rumors
Oil prices rose in volatile trading Wednesday after rumors spread that Saudi Arabia told major customers of significant production cuts. Prices quickly had given up strong early gains after the government reported U.S. gasoline inventories were well above expectations, suggesting that American motorists continue to drive less. Around midday, however, prices spiked close to 10 percent, the same time the Saudi rumor began to float, said Phil Flynn, an analyst with Alaron Trading Corp. Light, sweet crude for January delivery rose 3.4 percent, or $1.45, to settle at $43.52 on the New York Mercantile Exchange. Investors tend to exit the market as the year closes out, creating volatile trading. That appeared to be the case on Wednesday as well, with huge price swings.
Home foreclosures lag in November
The number of American homeowners dragged into the housing crisis fell last month to the lowest level since June as new state laws lengthened the foreclosure process, RealtyTrac reported today. “We’re going to have a pretty significant spike in January,” said Rick Sharga, RealtyTrac’s vice president for marketing. Nationwide, more than 259,000 homes received at least one foreclosure-related notice in November, down 7 percent from October, but 28 percent higher than a year ago, RealtyTrac said.
Federal deficit hits a record
The federal government ran a record budget deficit in November, putting Uncle Sam on track to post an all-time high annual shortfall of $1 trillion or more. In just the first two months of the budget year that started Oct. 1, the deficit totaled $401.6 billion, nearly matching the record gap of $455 billion posted for all of last year, according to Treasury Department data released Wednesday. If the deficit does top $1 trillion for the current budget year, it also would be a post-World War II high when measured as a percentage of the economy. The increased red ink stems from both lower tax revenue and increased spending that is a result of the recessionary economy.
Todd directors approve dividend
Todd Shipyards Corp. announced Wednesday that its directors have declared a five-cent dividend per share to be paid March 20 to all shareholders of record as of March 5. The company’s wholly owned subsidiary, Todd Pacific, performs a substantial amount of repair and maintenance work on commercial and federal government vessels. The company also owns Everett Shipyard.
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