AIG's Loss, Need for Cash Add to Pressure on Sullivan (Update3) : “American International Group Inc. , the world's biggest insurer by assets, said it needs to raise $12.5 billion after two straight quarterly losses as pressure builds on Chief Executive Officer Martin Sullivan.
AIG fell 8.3 percent to $40.50 in early trading at 7:27 a.m. in New York after the company reported a first-quarter net loss yesterday of $7.81 billion, compared with earnings of $4.13 billion a year earlier. The New York-based insurer disclosed more than $15 billion in pretax writedowns, prompting Standard & Poor's and Fitch Ratings to cut the company's credit grades.”
Not exactly unexpected. Not sure why this is always surprising to the talking heads over at CNBC. There is going to be so much more of this in the quarters to come it won’t even be funny…
AIG earnings could be the catalyst here for the wedge break DOWN and out. Pre-market S&P 500 is trading around 1380. A break below 1370 would seal the deal next week.
Oil hit $125 overnight and is now quietly melting higher. It now basically has to hit $130 as that number acts like a magnet.
Oil Rises to Record Above $125 as Nigeria Cuts Curb U.S. Supply: “Oil rose to a record above $125 and was set for the biggest weekly gain in more than a year on speculation reduced exports from Nigeria will curb U.S. supplies during the peak summer driving season
Nigeria production, which fell to the lowest level in a decade in April, has been cut further this month by rebel assaults on Royal Dutch Shell Plc pipelines. OPEC said yesterday it doesn't need to increase supplies, even as its president warned prices may reach $200 a barrel.”
At some point this should just trigger a rapid implosion somewhere in the economy. Consumers are turning to their credit cards so fast and hard that it can't be good. It must be to pay for necessities like gasoline and food.
The Federal Reserve Statistical Release on Consumer Credit was freakish. The annual rate of increase in revolving (credit card) debt was nearly 8% in March, more than double the annualized rate of increase in wages.
“Look! It's our credit card statement.”
“My eyes! The goggles, they do nothing!”
Those stimulus checks are already spent.
The Bears are back.