AIG Bailout: crumbles financial markets further

If the financial markets were not already in turmoil, Wednesday trading battered the share prices even more, sending the European and US share prices plunging following the news that British bank HBOS are in talks to be taken over and the huge federal bailout of one of the world’s largest insurers AIG.

Wall Street took a pounding when fears the US governments $85 billion loan to American International Group may not be enough to stabilize the insurer in the crumbling financial markets. On Wednesday The White House said that the United States had enough strength to overcome the current financial crisis and that recent US economic news showed a very mixed picture.

Although earlier on Wednesday the bailout of AIG had cheered European and Asian exchanges, the Dow Jones Industrial average fell by 2.48 percent to 10,785.20 while Nasdaq was down 3.47 percent to 2,138.06 in mid-afternoon deals.

The FTSE 100 index in London slid 2.25 percent to 4,912.40 points, also the Frankfurt Dax slid 1.75 percent at 5,860.98 and over in Paris the CAC 40 list 2.14 percent to 4,000.11 points. The AIG collapse could set off a wave of failures elsewhere analysts warned.

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