US President Barack Obama stressed the severity of the crisis in an effort to get a $3.55 trillion budget through a sceptical Congress.
The stumbling economy was also foremost on the minds of top Chinese leaders, with Premier Wen Jiabao quoted by state news agency Xinhua as saying the worldwide slump had yet to reach a bottom.
Looking to stem the damage to its export-driven economies from the crisis, leaders of Southeast Asian nations agreed to ease monetary policy and resist protectionism, according to a draft statement from a regional summit.
In the United States, the collapse in profits at Berkshire Hathaway, the wide-ranaging conglomerate led by Buffett, showed just how hard the corporate sector was reeling from the slump. “The economy will be in shambles throughout 2009 and for that matter, probably well beyond,” Buffett said in a letter to investors, in which he admitted to “doing some dumb things.”
British Prime Minister Gordon Brown for this part stressed the need more rigorous supervision of the global banking system, a day before EU leaders meet to thrash out ways to tackle the financial crisis ahead of an April 2 G20 summit to be held in Britain.
Brown showed little sympathy, at least in rhetoric, for bankers whose dodgy lending practices and bonus culture brought the international financial system to the brink of collapse. “Some practices are indefensible and they have got to be cleaned up now. It’s time to set new rules for the banks of all countries,” he said.
In a sign of the very human toll of this crisis, local authorities in England were seeking powers from the government to use shops for community facilities in the face of an increasing number of retail premises being left vacant because of the recession.
The US government, AIG and credit rating agencies, including Moody’s, S&P and AM Best, are in discussions, according to a source familiar with the matter, as the firm prepares to post a quarterly loss of roughly $60 billion. That shortfall equates to about $460,000 a minute, and would be the largest in corporate history.\ AIG is considered too vital a pillar to the global financial system because of its central role in the market for credit default swaps, securities that have been blamed for accelerating the pace of credit losses in global markets.
A key focus of the talks is to avoid a ratings downgrade, which could have serious ramifications on the insurer’s liquidity and hurt its businesses, with possible ripple effects throughout an already fragile financial sector.