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Thread: US lends 85 billions dollars to AIG!
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[quote=FRANKENSTEIN,323367]Lehman Brothers’ bankruptcy is not the end. AIG seems to be in trouble too. The Federal Reserve said that it would lend 85 billion dollars to AIG as emergency funds in order to protect this giant insurer. If AIG goes bankrupt, it will cause another earthquake in global financial system. In return, the government will take 79.9 per cent shares and gain the effective control of this company. This is the US government’s second intervention to combat the global credit crisis. As the news says, the government will appoint new executives to take control of this company. On the other hand, the government has the veto power over major decisions at the company. Although the financial crisis seems to rage in global markets, the US government didn’t change interest rates. Yesterday, it was 2 percent. However, the central banks in other countries have started to inject money in the market to relieve liquidity. The central bank of China had announced to cut the interest by 27 points. However, Shanghai stock market was not encouraged by this move. Yesterday, it plunged below 2000 points, 4.5 percent down. In Hong Kong, the Hang Seng index slumped 5.4 percent. As some economists foresee, global economy has entered its downturn period. When will it be over? [/quote]
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