COMMENTS: Congratulations! You are now in the Insurance Business

For the third day in a row, all three network newscasts led with the financial markets. American International Group, the world's largest insurance conglomerate, was taken over by the federal government. The Federal Reserve Board extended AIG a loan of $85bn to save it from going bust in return for 80% ownership. "You are now the proud owner of a massive insurance company," was the way NBC anchor Brian Williams kicked off his newscast, congratulating the taxpaying public. CBS led with the AIG angle. NBC and ABC led with the impact of the bailout on the stock market--which was bearish. The Dow Jones Industrial Average fell 449 points to 10609. Stocks were the Story of the Day.

As it did on Monday, NBC again used the resources of its sibling financial news cable channel, CNBC, to kick off its newscast. Carl Quintanilla led off with the disappointed hopes that the bailout of AIG would "calm the market--investors today sold anyway." Anchor Brian Williams inquired whether the Federal Reserve had enough capital to continue a policy of bailouts: "It sound strange but the Feds' wallet is, in the words of one Fed official, infinite…The ability to raise money, rescue funds, is basically without end." The only problem with "printing money until the cows come home," Quintanilla commented, is "sparking inflation."

Next Williams moved on to CNBC's trio of financial reporters Sue Herera, Joe Kernen and David Faber. Faber warned that, after AIG, Washington Mutual, a huge savings and loan, and Morgan Stanley, a leading investment bank, could be the next financial institutions to disappear. AIG's bailout, he added, has the nickname The Bridge Loan to Nowhere "because it really did not get us that far." Herera told us that "global cash was going into gold--the biggest move to the upside in gold in history." Kernen confessed that he once worked as a broker at the now bankrupt Lehman Brothers and the now taken over Merrill Lynch. "What are the other shoes that are going to drop here?" Williams asked. "It could be a millipede."

On ABC, Betsy Stark variously described the financial mood as "terrified" and "frantic," concluding that "Wall Street has been turned upside down." She checked off the bailouts so far: Bear Stearns $29bn, FannieMae and FreddieMac $200bn, AIG $85bn, not to mention new FHA loans for distressed homeowners. In her excitement, Stark told us that "London based Lloyds insurance is selling itself to a big Scottish bank" when she meant that a Scottish mortgage broker was being bought by Lloyds TSB, a London based bank. CBS' financial coverage concentrated on the overnight negotiations to take over AIG. Anthony Mason offered the tick-tock.


You must be logged in to this website to leave a comment. Please click here to log in so you can participate in the discussion.