Bailout passes Senate; Insurance concerns pop up
"The Senate last night easily approved a massive plan to shore up the U.S. financial system, but the measure faces a tougher test tomorrow in the House, where leaders will try to reverse the stunning defeat the legislation suffered earlier this week.
"As the Bush administration issued fresh warnings that Congress's failure to act would have dire consequences for the economy, the Senate revived the package the House defeated Monday and voted to approve it, 74 to 25.
"The proposal -- which calls for spending up to $700 billion to buy bad assets from faltering financial institutions -- was heavily revised to attract wider support. The bill passed last night would extend an array of tax breaks worth $108 billion to businesses and families next year. It would also temporarily increase the limit on federal insurance for bank deposits to $250,000 from $100,000."
Meanwhile, the other thing I'm watching is the carnage in the insurance sector. Several of the stocks are coming under fire amid concerns they'll be the next to suffer investment losses. One firm -- Zurich Financial Services -- came out and warned of investment losses tied to a SIV that's dying on the vine and Lehman Brothers. Here's an excerpt from Reuters:
"Zurich Financial Services is writing down $615 million worth of investments related to Sigma Finance Corp, Lehman Brothers and Washington Mutual, the Swiss insurer said on Thursday.
"Zurich will write down $275 million due to the notice of default of Sigma Finance, a limited purpose finance company which announced this week it will cease trading as a result of financial-market turmoil.
"Zurich also said it was taking an impairment of $295 million on its previously announced exposure to Lehman Brothers and a further $45 million related to Washington Mutual's debt instruments."