AIG: Please, Sir, Can I Have Some More?

A new bailout for AIG? That's the word this morning from the Wall Street Journal, which reports that the Treasury Department will rip up the original $123 billion bailout supposed to save the troubled insurer in favor of a $150 billion lifeline. The deal, reached Sunday night (and likely to be confirmed today when AIG reports its latest financial results), would be the third infusion of taxpayer money injected into the firm in the past two months. The idea behind the $150 billion bailout package, the Washington Post writes, would be to establish "easier terms that would get federal officials more involved in AIG but aims to reduce the strain on the company." Still, the plan is bound to cause ripples in Washington. It could, the WSJ writes, "spark a political backlash, especially from congressional Democrats, because the Treasury, while adding to its AIG obligations, has thus far refused to extend a hand to the struggling Big Three auto makers." You can bet Detroit will be watching closely.

The Bush administration may still be opposed to extending the $700 billion bailout fund to the auto industry, but that hasn't stopped the automakers' lobbying efforts. The Big Three this weekend succeeded in securing vital allies in two Democratic leaders: House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. Pelosi and Reid sent a letter to Treasury Secretary Henry Paulson urging the administration to free up money for the auto industry. They argued that it was the implosion of the financial markets, along with the slowing economy, that "imperiled our domestic automobile industry and its work force," the Associated Press reports. President-elect Barack Obama also supports aid for the auto industry; he is scheduled to meet with President George W. Bush today, according to the WSJ.

The Asian stock markets opened the week with a bang, according to the New York Times, rising strongly on the heels of China's $586 billion stimulus package, introduced Sunday. "Though the two-year package appeared to include some previously announced measures, its size was clearly designed to revive the fading confidence of Chinese businesses and consumers, and impress foreign governments," the WSJ writes. Even with the stimulus package—equal to about 16 percent of China's economic output last year—the Chinese economy is expected to limp along for at least another two quarters before showing signs of recovery.

China wasn't the only regional player trying to jump-start the economy this weekend. Taiwan cut its benchmark interest rate for the fourth time in eight weeks, the WSJ reports, while South Korea on Friday also slashed its main interest rate. The two economies, export powerhouses, are particularly vulnerable to a global recession.

The roots of the current financial crisis are front-and-center in the minds of European leaders as they prepare to use next weekend’s G20 summit in Washington to "urge the U.S. to back reforms of the world’s financial system, amid claims that Americans should help clear up a mess they created," the Financial Times reports. France, the United Kingdom, Germany, and Italy are all said to be cooling their heels at what they view as "as a lack of urgency over reform by George W. Bush." French President Nicolas Sarkozy wants the G20 to agree to “ambitious, operational decisions” that would then be reviewed and cemented after Barack Obama’s inauguration in January, the FT says. Brazil leads a group of developing nations that also wants a greater say in global financial affairs, the NYT reports. The nations blame the U.S. and other developed countries for "spreading financial gloom to all corners of the globe." As Brazilian President Luiz Inácio Lula da Silva said on Saturday, the economies of all nations are "being infected by problems that originated in the advanced countries.”

And those problems continue. More than 70,000 U.S. financial-sector jobs could go in the next few months as "Wall Street banks slash costs to cushion the blow of further market turbulence and deepening economic woes in 2009," the FT reports. Meanwhile, thousands of jobs in Ohio are under threat because DHL intends to restructure its U.S. operations. Parent company Deutsche Post looks set to curtail a significant part of DHL's ground deliveries, and that could mean a loss of 12,000 jobs with 8,000 of those coming from the company's hub in Wilmington, Ohio, CNN Money reports.

And, finally, YouTube has some good news to report (for a change) in its latest dealings with Hollywood. The Google-owned video-sharing site reached an agreement over the weekend with MGM, "the financially troubled 84-year-old film studio," as the NYT puts it, to broadcast full-length television shows and movie clips. It will start by showing old episodes of American Gladiators, films like Bulletproof Monk and The Magnificent Seven, and clips from popular movies like Legally Blonde, the newspaper reports. Ads will run alongside the video.