AIG 1st-quarter loss narrows to $4.35 billion

Insurance agency AIG reported that it’s losses for the first quarter of 2009 were drastically smaller than those record setting losses they posted in the fourth quarter of last year. This quarter AIG posted a loss of 4.35 billion, this was much better than the 61.7 billion they lost in the fourth quarter of 2008. AIG has received nearly 180 Billion dollars in loans from the federal government in order to stay business. In exchange for the funds, the federal government now has control of approximately 80 percent of the firm.

The improvements made by AIG are just further evidence that the recession may becoming to an end, but that we aren’t out of the woods yet. Also proven by AIG’s reports is that we can now assume the government is going to attempt to be more involved in working with the banking and insurance agencies.

http://news.yahoo.com/s/ap/20090507/ap_on_bi_ge/us_earns_aig

Obama touts $17 billion 'lot of money' budget cuts

President Barack Obama has proposed cutting funding to or completely eliminating 121 federal programs in order to rein in spending by the federal government. Obama compared the cutting of programs to the belt tightening most Americans are doing. President Obama has claimed that his proposed cuts will save approximately 17 Billion dollars.

Republicans have pounced on these proposed cuts by saying they are not nearly enough. A few of the proposed cuts include: tax breaks for oil and gas companies, cutting more then half the benefits for family members of slain police officers. Another proposal is to increase the air fare taxes starting in 2012.

It still remains to be seen how much of an impact these cuts will have on reducing the federal budget. I agree with his decision to start removing tax breaks from larger oil and gas industries; however, I don’t feel raising taxes on airlines or any form of transportation is the best way to raise capital when Americans are already unwilling to travel due to economic constraints.

http://news.yahoo.com/s/ap/20090507/ap_on_go_pr_wh/us_obama_budget

Stress tests find 10 big banks need $75B more

On Thursday, The United States received the eagerly anticipated “stress test” results from 19 of the largest banks in the United States. The findings showed that 10 of the largest banks still need approximately 75 billion dollars to withstand losses if the recession were to take a turn for the worse. The results did show that just like the rest of the U.S. Economy, there is improvement across the board. However, we are not out of the clear yet. Among the 10 banks that could possibly ask more funding are Bank of America, Wells Fargo, Citigroup and Morgan Stanley.

I find the news from this article to be uplifting, and that makes me very optimistic about the health of the banks because some of the banks are no longer requiring additional federal funds, and that the continued support of these banks by the federal government shows that these banks will not fail.

http://news.yahoo.com/s/ap/20090507/ap_on_bi_ge/us_banks_stress_tests;_ylt=Aqn8GiZcAp7NgUiXX6OCX2ms0NUE;_ylu=X3oDMTJtNTAxZW12BGFzc2V0A2FwLzIwMDkwNTA3L3VzX2JhbmtzX3N0cmVzc190ZXN0cwRjcG9zAzEEcG9zAzMEc2VjA3luX3RvcF9zdG9yeQRzbGsDZnVsbG5ic3BzdG9y

Treasury says about $110B left in bailout fund

On Tuesday April 21st, the United States Treasury Department reported that only 109.6 Billion dollars in resources remain in the government’s 700 billion dollar financial rescue fund. So far the United States Government has committed more then 117 Billion dollars to insurance giant AIG, banks such as Citigroup and Bank of America, and auto companies such as General Motors and Chrysler.
An additional 218 billion dollars has also been committed to banks to bolster their capital reserves. The federal stimulus package has also allocated more then 200 billion dollars to more then 500 banks nationwide, with even more banks continually applying for additional federal funding.

http://news.yahoo.com/s/ap/20090421/ap_on_bi_go_ec_fi/us_bailout_fund;_ylt=AnpXU9ubyY7DA5.t5SzMBg2yBhIF

Obama says he'll cut wasteful programs

President Obama announced that he would eliminate dozens of wasteful and ineffective as part of an effort to restore fiscal accountability to the federal budget. Obama’s plan is to cut funds from unnecessary programs and have the government take more of a responsibility for their actions.
"As surely as our future depends on building a new energy economy, controlling healthcare costs and ensuring that our kids are once again the best educated in the world, it also depends on restoring a sense of responsibility and accountability to our federal budget," Obama said.
Due to two large bailout packages, and other subsequent expenditures, the United States has posted a $956.8 billion budget deficit for the first half of the fiscal year. That is three times larger then at this time last year. Obama has made cutting spending one of his top priorities and promises that the spending he has done in the first three months of his Presidency will not continue for the rest of it. "If we're to going to rebuild our economy on a solid foundation, we need to change the way we do business in Washington," Obama said. "We need to restore the American people's confidence in their government - that it is on their side, spending their money wisely, to meet their families' needs."

http://money.cnn.com/2009/04/18/news/economy/obama_address.reut/index.htm?postversion=2009041813

Banking Industry Showing Signs of a Recovery

A little over three months ago, many of the top banks in the United States were on life support. However, over the last couple days many of these same banks are beginning to recover. Recently, JP Morgan Chase, Goldman Sachs and Wells Fargo have all announced that they had huge profits in the first quarter this year. Citi Bank and Bank of America also have been reporting that their profits are up, and that the worst of the recession is over.
Low federal interest rates have caused many citizens to refinance their houses at these better rates, and thus increasing consumer activity. Many analysts are now reporting that the outlook of the housing market is improving, but that we are not out of the woods yet concerning our economic problems.
“We are in the eye of the storm,” Gerard Cassidy, a banking analyst at RBC Capital Markets. “The worst is behind us for housing. For commercial real estate and corporate lending, there is still a big dark cloud.”

http://www.nytimes.com/2009/04/17/business/17bank.html?_r=1&ref=todayspaper

Fed officials suggest worst of recession is over

Today, top U.S. officials offered reassurances that the worst of the economic downturn is now likely over, helped by an unprecedented effort to keep credit flowing. These same officials still however say that the recovery will be slow. When the financial crisis began in 2007, federal interest rates were at 5.25%, those rates have now been slashed down to as low as 0.25% or 0%.
An economic recovery is still reliant on the turnaround of the housing market, which has been pretty bad over the last 16-18 months. The United States and the rest of the world are by no means out of the woods yet, but will recover, it is just a matter of when.

http://news.yahoo.com/s/nm/20090418/bs_nm/us_usa_fed;_ylt=AnTo.j_Manu1be4Uktoz642yBhIF