Remember AIG? It was once the world's largest insurer, and two years ago this month, at the height of the financial crisis, it got a multi-billion taxpayer bailout to save it from collapse. Today, the company announced a plan to repay taxpayers and bring government ownership to an end. The company's CEO, Robert Benmosche, called the agreement a "pivotal milestone."
Under the plan, AIG will repay $20 billion and close a credit line established by the Federal Reserve Bank in New York. AIG will make the payments using money from the sales of some of its companies, and public stock offerings. The insurer will also repay $49 billion in taxpayer money by converting preferred shares owned by the U.S. Treasury into common stock. That stock can later be sold. AIG plans to begin the payoffs in the first three months of next year.
In other business news, employers appear to be laying off fewer people. The Labor Department reports first-time unemployment claims fell by 16,000. And mortgage rates have fallen yet again. Freddie Mac reports the average rate for a 30-year fixed loan dropped to 4.32 percent, the lowest on record since 1971.
Federal and state law enforcement authorities in New York announced charges against more than 60 people today, for hacking into computers and stealing about $3 million from the bank accounts of individuals, small businesses and banks themselves. Many of those charged were foreign students living in the U.S. who opened accounts at Chase or other banks so money stolen from those hacked accounts could then be transferred. Others charged in the cyber crime live in eastern Europe.
How worried should we be about computer hackers? Avivah Litan, a security analyst with Gartner, spoke with Amy Eddings about how the suspects gained access to accounts, how effective law enforcement has been at stopping cyber crimes, and how consumers can protect themselves. Listen to the conversation in the audio clip at the top of this page.
In markets, the Dow closed down 47 points today, at 10,788. The S&P 500 dropped four points, to 1,141. The Nasdaq shed 8 points, ending the day at 2,369.