Current Futures: Dow +58.00, S&P +7.30, NASDAQ +7.00
European Trade: European equity markets continued to trade in positive territory this morning, posting gains from the opening bell. Asian markets and U.S. futures also advanced overnight.
A staggering number of shares listed on the Dax and Ftse rose tonight. In the U.K., Land Security, the biggest U.K. property company in the country, and Barclays led the gains, jumping close to 11%. Barclays’ shares moved higher as the bank said it was profitable in the first part of the year. Additionally, Barclays said it is looking at ways to improve its Tier 1 capital, without giving a stake to the U.K. government. On the other hand, Lloyds declined 3.50% tonight.
AIG released a statement tonight, showing where parts of the four bailouts packages went. Most of the $105 billion disclosed went to private banks, while the states of California and Virginia got $12.1 billion for investments contracts. According to the bank, Goldman received $12.9 billion; SocGen received $11.9 billion, while Deutsche Bank got $11.8 billion from AIG. Even though AIG is a state-owned company now, it had refused for a long period to disclose its counterparties.
Many of the sums owned by AIG to its counterparties came from wrong and somewhat risky bets, which eventually dragged the company down to the brink of bankruptcy. Most of the losses came from credit-default swaps, in which banks bought protection from AIG against a default on the underlying asset. As such, the buyer paid a premium to AIG, looking for default protection on some debt (most likely mortgage backed securities).
In the last few weeks Mr. Bernanke said, in public appearances, that AIG made some “terrible bets”, and that it is unfair to rescue to company with public money, but otherwise the market would be at risk.
Tonight, the Nikkei rose 134.87 points (1.78%) to 7,704.15. The Australian S&P/Asx gained 3.20 points (0.10%) to 3,348.40. The U.K. Ftse rose 58.67 points (1.56%) to 3,812.35, while the German Dax added 105.63 points (2.67%) to 4,059.23.
Crude oil declines, after OPEC did not reduce production. Crude oil for April delivery fell $2.20 to $44.05
Gold trades between the 20 and the 50-day moving averages. Bullion for immediate delivery fell $0.80 to $929.40.