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Treasury Plan For Buying Toxic Assets Is Complex Beyond Belief
According to the paper, “the framework, designed to expand existing programs and create new ones, relies heavily on participation from private-sector investors.” The question which will remain unanswered for some time is whether hedge funds and other pools of private money will risk being partners with the US government in programs designed to help the banks improve balance sheets. The taxpayers exposure of these programs is significant for two reasons. The first is that the government will, in many cases, provide loans to private capital firms so that they can buy toxic assets. These will be “non-recourse” loans. If the value of the assets being purchased falls sharply, the government absorbs most of the losses beyond what private capital firms have invested to buy the assets. The other potential problem is that private capital firms will have to negotiate with banks for the prices to buy toxic assets. If two parties cannot agree on price, what happens? The troubled paper could remain on bank balance sheets, which defeats that purpose of the entire set of programs, or, the government can “bridge” the difference by offering to offset the amount between what banks will take for toxic paper and what private equity will pay for them. That puts taxpayers at greater risk for losses. Sine the taxpayer has become the lender of last resort for the entire financial and credit system bailout, that should come as no surprise. Douglas A. McIntyre       Source: 247 Wall Street | 21 Mar 2009 | 1:02 pm Wholesale Credit Unions Seized
According toMarketWatch, National Credit Union Administration said Lenexa, Kan.-based U.S. Central Federal Credit Union and San Dimas, Calif.-based Western Corporate were placed into conservatorship “to protect retail credit union deposits and the interest of the National Credit Union Share Insurance Fund.” The NCUA will almost certainly need money from the Treasury to cover supporting these institutions and others the are likely to need assistance. Taxpayers get to foot another bill. Douglas A. McIntyre       Source: 247 Wall Street | 21 Mar 2009 | 12:41 pm NewsWatch: Calamitous day sees banks, credit unions seizedThe pace of the ongoing credit crisis quickens significantly as regulators seize three banks and placed two large corporate credit unions into conservatorship, citing a need to “stabilize the corporate credit union system.”Source: MarketWatch.com - Top Stories | 21 Mar 2009 | 12:00 pm Japan warns Africa over economyJapanese Foreign Minister Hirofumi Nakasone warned that the global economic crisis would affect Africa for at least two years, as he opened a development conference in Botswana on Saturday.Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 11:14 am 'Obstacle' Hungary PM to resignHungarian Prime Minister Ferenc Gyurcsany says he will quit because he is an obstacle to the country's economic recovery.Source: BBC News | Business | World Edition | 21 Mar 2009 | 11:06 am Personal Finance Daily: The week's 10 best Personal Finance stories: March 16-20In case you missed them, here are the top 10 Personal Finance stories from MarketWatch for the week of March 16-20:Source: MarketWatch.com - Top Stories | 21 Mar 2009 | 11:01 am Charities Use Credit Cards Creatively to Keep Funds Flowing InThinkingMoney.org can report that charities must be more creative to generate income; 30% of charities are suffering from falling income as a result of the credit crunch, 52% of...Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 10:00 am Third bidder joins race for SatyamThe board of India's Satyam Computer Services met Saturday to review a list of bidders for the fraud-hit outsourcer as a third company announced it had joined the race. Potential biddersSource: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 9:45 am Declining fortunesRussians tell how they scrape a living in economic crisisSource: BBC News | Business | World Edition | 21 Mar 2009 | 9:32 am Auto Review: 2009 Mercedes Benz S550: As good as a sedan getsThere is an eternal struggle among automakers -- some who want performance and others that emphasize luxury. The S550 proves that you can have both.Source: MarketWatch.com - Top Stories | 21 Mar 2009 | 9:01 am China clears Johnson & Johnson baby products after probeBEIJING (Reuters) - Chinese health authorities said on Saturday that they had found no evidence of cancer-causing chemicals in baby products made by U.S. company Johnson & Johnson.Source: Reuters: Business News | 21 Mar 2009 | 8:42 am UPDATE1-China clears Johnson & Johnson baby products after probeBEIJING, March 21 (Reuters) - Chinese health authorities said on Saturday that they had found no evidence of cancer-causing chemicals in baby products made by U.S. company Johnson & Johnson .Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 8:23 am Rock, paper, tournamentYou've played the game to pick kickball teams or settle who does the dishes. Now, thanks to a tireless promoter, college students are playing it for money.The one they call Naco faces his opponent, fist raised, trying to ignore TV cameras, jeers from spring-break revelers and women in itsy-bitsy bikinis a few yards away. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Despite discounts, travel spending takes a holidayDespite bargain air fares, cheaper hotels and theme park discounts, Americans and foreign visitors have cut U.S. tourism spending to the lowest level since the terror attacks of 2001, reports show.Despite bargain air fares, cheaper hotels and theme park discounts, Americans and foreign visitors have cut U.S. travel spending to the lowest level since the terror attacks of 2001, new government and industry statistics show. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Home builder Lennar seeks to regain some or all of Newhall Ranch stakeThe company had sold a 68% interest in developer LandSource to CalPERS at the top of the housing bubble. It has a tentative agreement to buy back an undisclosed amount -- presumably at a big discount.Home builder Lennar Corp., which sold a controlling interest in the the massive Newhall Ranch project to the California Public Employees' Retirement System, now wants to buy back some or all of its stake. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Goldman Sachs defends $13-billion payment from AIGThe Wall Street powerhouse says money it received from the bailed-out insurer was fully justified. Critics say Goldman should have accepted less than it was owed.Beleaguered Wall Street powerhouse Goldman Sachs Group switched to offense Friday, contending that the $13 billion the firm received from bailed-out American International Group Inc. was fully justified and in fact was good for taxpayers. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am California unemployment hits 10.5% in FebruaryAfter 116,000 jobs are lost for the month, the state's unemployment rate is the highest since April 1983.California employers led the nation in mass layoffs in February as the state's unemployment rate hit 10.5%, the highest level since April 1983, state and federal labor agencies reported Friday. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Blacks lose ground in job slumpCalifornia has a 10.5% unemployment rate -- but 12.5% for African Americans. Nationally the gap is even wider.California's unemployment rate rose for the 11th straight month in February, hitting 10.5% as a recession-racked economy shed a higher-than-expected 116,000 jobs, the state reported Friday. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Bonus backlash hits Wall StreetCongress may undo a decades-old compensation system, alarming bankers but pleasing those who believe 'financial buccaneers' deserve payback.As Washington's anti-bonus zeal intensified Friday, alarm spread across Wall Street that the government's sudden taxation fervor could ensnare thousands of workers and affect every major financial firm. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Bernanke says compensation at banks must be monitoredThe Federal Reserve chief also makes a fresh pitch for an overhaul of banking regulations to prevent another financial crisis.Federal Reserve Chairman Ben S. Bernanke on Friday called for banking supervisors to pay "close attention" to compensation practices as they examine the soundness of financial institutions. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Repayment begins sooner for new college loansStudents who borrow from Sallie Mae must make interest-only payments while still in school.Attention class, there is about to be a major change in student loans. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Regulators seize top two U.S. 'wholesale' credit unionsWestern Corporate Federal Credit Union of San Dimas and U.S. Central Federal Credit Union of Lenexa, Kan., are placed under conservatorship to stem mounting losses caused by mortgage-related bonds.Federal regulators seized control Friday of the nation's two largest "wholesale" credit unions -- with combined assets of $57 billion -- in an emergency move to stabilize the nonprofit banking system used by 90 million Americans. Source: L.A. Times - Business | 21 Mar 2009 | 7:00 am Despite discounts, travel spending takes a holidayDespite bargain air fares, cheaper hotels and theme park discounts, Americans and foreign visitors have cut U.S. tourism spending to the lowest level since the terror attacks of 2001, reports show. ...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am Goldman Sachs defends $13-billion payment from AIGThe Wall Street powerhouse says money it received from the bailed-out insurer was fully justified. Critics say Goldman should have accepted less than it was owed. ...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am Bernanke says compensation at banks must be monitoredThe Federal Reserve chief also makes a fresh pitch for an overhaul of banking regulations to prevent another financial crisis. ...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am Regulators seize top two U.S. 'wholesale' credit unionsWestern Corporate Federal Credit Union of San Dimas and U.S. Central Federal Credit Union of Lenexa, Kan., are placed under conservatorship to stem mounting losses caused by mortgage-related bonds. ...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am Stocks pull back but log a second week of advancesDow falls 122, S & P 15 amid profit taking and concern that Federal Reserve action may stimulate inflation. ...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am IATSE ratifies three-year contract that cuts health benefitsThe union, which represents more than 35,000 film and TV workers, fends off a campaign by dissidents who accused their leaders of selling them short at the bargaining table. ...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am GM, Chrysler may need 'considerably' more aid than requestedThough the Detroit carmakers have asked for as much as $21.6 billion in additional government funds, they may need even more money, according to Steven Rattner, the Treasury's chief auto advisor. ...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am Blacks lose ground in job slumpCalifornia has a 10.5% unemployment rate -- but 12.5% for African Americans. Nationally the gap is even wider. ...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am Repayment begins sooner for new college loansStudents who borrow from Sallie Mae must make interest-only payments while still in school. Attention class, there...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am Home builder Lennar seeks to regain some or all of Newhall Ranch stakeThe company had sold a 68% interest in developer LandSource to CalPERS at the top of the housing bubble. It has a tentative agreement to buy back an undisclosed amount -- presumably at a big discount...Source: RSS feed - channel BNPaperBusiness | 21 Mar 2009 | 7:00 am China clears Johnson & Johnson baby products after probeBEIJING (Reuters) - Chinese health authorities said on Saturday that they had found no evidence of cancer-causing chemicals in baby products made by U.S. company Johnson & Johnson.Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 5:58 am China clears Johnson & Johnson baby products after probeBEIJING, March 21 (Reuters) - Chinese health authorities said on Saturday that they had found no evidence of cancer-causing chemicals in baby products made by U.S. company Johnson & Johnson .Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 5:57 am White House considers reforms for nonbank fin firmsWASHINGTON, March 21 (Reuters) - Establishing a formal process for the U.S. government to unwind failing non-bank financial firms, like AIG, has moved to the top of the Obama administration's financial...Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 5:05 am Singapore needs foreigners for economic survivalSingapore, which is facing its worst recession in history, needs foreigners to survive in the long-term, founding father Lee Kuan Yew said. The city-state is not reproducing itself fast...Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 4:55 am Cos. looking at options to union organizing billStarbucks Corp. and other companies are exploring alternatives to a bill that would make it easier for workers to unionize, but the idea of any compromise drew the wrath of business groups...Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 4:41 am Union of film, TV workers approve new contractA union that represents more than 35,000 film and television workers has approved a three-year contract with Hollywood producers. Officials from the International Alliance of Theatrical...Source: RSS feed - channel BNewsBusiness | 21 Mar 2009 | 4:38 am U.S. bank rescue plan could come on Monday: reportNEW YORK (Reuters) - The U.S. government will announce as soon as Monday a long-awaited plan to try to get bad assets off the books of banks, a cornerstone of its efforts to tackle the credit crisis, The Wall Street Journal reported.Source: Reuters: Business News | 21 Mar 2009 | 4:00 am Market Snapshot: U.S. stocks seek further gains, with Fed on boardStocks will start next week riding a new wave of optimism after the Federal Reserve took extraordinary steps to lower borrowing costs, which helped the market score its first two back-to-back weeks of gains of the year.Source: MarketWatch.com - Top Stories | 21 Mar 2009 | 3:01 am U.S. seizes top credit union clearinghouseWASHINGTON (Reuters) - Regulators seized the top clearinghouse for U.S. credit unions, citing a critical deterioration in the finances of the provider of services to thousands of retail credit unions.Source: Reuters: Business News | 21 Mar 2009 | 2:36 am U.S. close to announcing bank rescue plan: report (Reuters)Reuters - The U.S. government will announce as soon as Monday a long-awaited plan to try to get bad assets off the books of banks, a cornerstone of its efforts to tackle the credit crisis, The Wall Street Journal reported.Source: Yahoo! News: Business | 21 Mar 2009 | 2:20 am US banking losses revised upwardUS banks lost $32.1bn (£22.3bn) in the last quarter of 2008 - nearly $6bn more than first reported, officials say.Source: BBC News | Business | World Edition | 21 Mar 2009 | 1:42 am 3 banks fail - 20 so far this yearBank regulators closed three banks Friday, marking the 18th, 19th and 20th failures this year.Source: Business and financial news - CNNMoney.com | 21 Mar 2009 | 1:29 am Renault revives protectionism fearsFears France's state aid package for its car industry is protectionist resurfaced when Renault said it was relocating production of a small car from Slovenia to near ParisSource: Financial Times - US homepage | 21 Mar 2009 | 1:22 am U.S. seizes 2 big credit unionsThe federal government, in its latest effort to prop up the financial system, took over two giant corporate credit unions Friday with combined assets of $57 billion.Source: Business and financial news - CNNMoney.com | 21 Mar 2009 | 1:17 am Nacchio freed indefinitely; seeks high court reviewDENVER (Reuters) - A judge in Denver on Friday set aside her previous order that former Qwest Communications International Chief Executive Joseph Nacchio report to prison on Monday after his attorneys petitioned the U.S. Supreme Court to overturn his 2007 insider trading conviction.Source: Reuters: Business News | 21 Mar 2009 | 1:05 am This Week’s LinksInfrastructurist on the 7 most ridiculous roads being built with stimulus money. Get Rich Slowly on the passive barriers that support irrational financial behavior. New Scientist on how money messes with your head.
Source: Business Pundit | 21 Mar 2009 | 12:44 am Dow ends off 122 but Wall Street posts 2-week gain (AP)
Source: Yahoo! News: Stock Markets News | 21 Mar 2009 | 12:42 am US seizes top credit union clearing houseUS regulators seized control of US Central Federal Credit Union, a huge wholesale credit union with $34bn in assets that provides services to nearly every other credit unionSource: Financial Times - US homepage | 21 Mar 2009 | 12:36 am Business Briefs - FridayHealth care giants Johnson & Johnson, Novartis and GlaxoSmithKline have reportedly bid about $4 bil for skin care specialty...Source: Investor's Business Daily: BUSINESS | 21 Mar 2009 | 12:36 am In Brief - FridayBoston Scientific (BSX), a medical device maker, said it will pay $50 mil to settle a dispute with an inventor who claimed the company's...Source: Investor's Business Daily: BUSINESS | 21 Mar 2009 | 12:36 am Texas Construction Company Licks Chops Over Stimulus DollarsLike a lot of other states, highway construction in Texas should move into overdrive thanks to new funds from the federal stimulus program. The...Source: Investor's Business Daily: BUSINESS | 21 Mar 2009 | 12:36 am Trends & Innovations - FridayMaggots prescribed for leg ulcersSource: Investor's Business Daily: BUSINESS | 21 Mar 2009 | 12:36 am Medicine's Spoonful Of SugarThe ailing economy hasn't impaired the health of the nation's drug and medical supply distributors.Source: Investor's Business Daily: BUSINESS | 21 Mar 2009 | 12:36 am Stock investors banking on toxic-asset plan (Reuters)
Source: Yahoo! News: Stock Markets News | 21 Mar 2009 | 12:30 am Stock investors banking on toxic-asset planNEW YORK (Reuters) - Wall Street's attempt to recover further from 12-year lows faces its biggest test yet next week in the Treasury's long-delayed bank rescue plan.Source: Reuters: Business News | 21 Mar 2009 | 12:30 am Stock investors banking on toxic-asset plan (Reuters)
Source: Yahoo! News: Business | 21 Mar 2009 | 12:30 am Latin America stocks slip, investors weigh US plan (AP)AP - Latin American stocks fell on Friday, ending the week largely even as investors weighed a U.S. Federal Reserve plan to buy up to $1 trillion in bonds to ease credit and boost growth.Source: Yahoo! News: Stock Markets News | 21 Mar 2009 | 12:18 am Weavering Capital may be investigated by SFOThe Serious Fraud Office (SFO) and the City’s top regulator are considering whether to start an investigation into the collapse of Weavering Capital, a $637 million London hedge fund, which had to call in the liquidator PricewaterhouseCoopers after discovering a series of suspect derivatives trades.$Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Morals: the one thing markets don't makeThe continuing disclosures about excessive pensions and payoffs, salaries and bonuses for people at the top stir in us feelings for the oldest of human bloodsports: the search for a scapegoat. But they ought to lead us to think more deeply about the values of our culture as a whole.Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Into an era of stealth cuts – and more stealth taxesDeath by a thousand cuts is always politically preferable to the slaughter of the first- born: or, in public spending terms, closing hospitals or schools and cancelling high-profile projects. That is why most economy drives, in reality involving slower growth rather than cuts in cash term, are less gory than slash-and-burn headlines and vivid ministerial warnings.Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Top-class graduates struggle for jobs as they spurn stricken banksThousands of highflying graduates, who made banking their first career choice for years, are risking major disappointment as they fight for places as accountants and lawyers.Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Cost-cutters push Regus profits higher by 25%Regus, the serviced office operator, reported a 25 per cent increase in full-year profits yesterday as businesses sought to cut costs by renting work space.Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Steve Morgan regains control of Redrow in swift coupSteve Morgan, the founder of Redrow, the housebuilder, has regained power at the company through an audacious boardroom coup.Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Threat of 100% bonus tax raises fears for future of US banksProposals that could lead to Wall Street bonuses being taxed at 100 per cent could result in “the end of the banks as we know them now”, a leading financier warned yesterday.Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Lord Myners ‘knew about massive pension payout for disgraced banker’Lord Myners, the City Minister, was last night under renewed pressure over how much he knew about the £16.9 million pension awarded to Sir Fred Goodwin, the former Royal Bank of Scotland chief executive.Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Time to stop pussy-footing over banksThe Treasury was rightly rapped this week for allowing Northern Rock to continue spraying out 125 per cent mortgages for months after it had collapsed and was firmly latched on to the taxpayer nipple.Source: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Need to know: Citigroup appointment ... Shire lawsuit ... GSK saleView video and Need to Know interactive heatmapSource: Latest Business News from Times Online | 21 Mar 2009 | 12:00 am Goldman says did nothing wrong taking AIG paymentsNEW YORK (Reuters) - Goldman Sachs Group Inc did nothing wrong when it accepted payments to close out trades with American International Group, the giant insurer rescued by the U.S. government, Goldman's chief financial officer said on Friday.Source: Reuters: Business News | 20 Mar 2009 | 11:39 pm Banker fury over tax 'witch-hunt'Bankers on Wall Street and in Europe have struck back against moves by US lawmakers to slap punitive taxes on bonuses paid to high earners at bailed-out institutionsSource: Financial Times - US homepage | 20 Mar 2009 | 11:32 pm RBS sued by City of ClevelandRBS is being sued by the City of Cleveland over alleged damage done by the bank's subprime mortgage business.Source: Telegraph Finance | 20 Mar 2009 | 11:21 pm IBM, Sun talks seen continuing to next week: sourcesNEW YORK (Reuters) - IBM is still in talks to buy Sun Microsystems Inc and discussions could take several more days as IBM studies various parts of Sun's computer server and software businesses, according to people with knowledge of the matter.Source: Reuters: Business News | 20 Mar 2009 | 11:11 pm GM bondholders appeal to break impasse in talksDETROIT (Reuters) - Advisers representing General Motors Corp bondholders on Friday issued an appeal to the automaker and U.S. officials to break an impasse in a crucial round of debt restructuring talks.Source: Reuters: Business News | 20 Mar 2009 | 11:09 pm GM bondholders appeal to break impasse in talks (Reuters)Reuters - Advisers representing General Motors Corp bondholders on Friday issued an appeal to the automaker and U.S. officials to break an impasse in a crucial round of debt restructuring talks.Source: Yahoo! News: Business | 20 Mar 2009 | 11:09 pm BofA's Lewis calls bonus tax "unfair": memoNEW YORK (Reuters) - Proposed legislation to tax 90 percent of bonuses at companies receiving more than $5 billion in government funds is "unfair," Bank of America Corp Chief Executive Kenneth Lewis said in a memo to employees on Friday.Source: Reuters: Business News | 20 Mar 2009 | 11:07 pm BofA's Lewis calls bonus tax "unfair": memo (Reuters)Reuters - Proposed legislation to tax 90 percent of bonuses at companies receiving more than $5 billion in government funds is "unfair," Bank of America Corp Chief Executive Kenneth Lewis said in a memo to employees on Friday.Source: Yahoo! News: Business | 20 Mar 2009 | 11:07 pm Calamitous day sees banks, credit unions seizedThe pace of the ongoing credit crisis quickens significantly as regulators seize three banks and placed two large corporate credit unions into conservatorship, citing a need to “stabilize the corporate credit union system.”Source: MarketWatch.com - Top Stories | 20 Mar 2009 | 11:06 pm Timeline: Sir Fred GoodwinSir Fred Goodwin's fortunes have seen him fall from hero to zero in 11 years.Source: Telegraph Finance | 20 Mar 2009 | 11:01 pm After Hours: Banks mixed, Sun Micro up in late-trading sessionFinancial stocks trade mixed after a tough dayside session for the sector that fronted declines on the broader market.Source: MarketWatch.com - Top Stories | 20 Mar 2009 | 10:59 pm Lender default leads to delay in NJ retail complex (AP)AP - The opening of the long-delayed Xanadu retail and entertainment complex in New Jersey's Meadowlands has been pushed back again due to a default on a construction loan, a project spokesman said Friday.Source: Yahoo! News: Business | 20 Mar 2009 | 10:46 pm Wall Street CEOs gripe about proposed bonus-tax legislationTop Wall Street executives react harshly to proposed legislation that would punitively tax bonuses awarded to employees at firms receiving federal assistance.Source: MarketWatch.com - Top Stories | 20 Mar 2009 | 10:46 pm Abraham pens new report on EquitableParliamentary Ombudsman Ann Abraham is producing another statement on Equitable Life outlining her concerns.Source: Telegraph Finance | 20 Mar 2009 | 10:30 pm TCI sells Indian state banks holdingsThe $9.5bn London activist hedge fund has liquidated its holdings in Indian state-owned banks in one of the biggest single selldowns by a foreign institutional investor in the country's stock marketSource: Financial Times - US homepage | 20 Mar 2009 | 10:30 pm RBS was 'disaster waiting to happen'When the outgoing board of directors at RBS met for the final time in January the scale of the business disaster they had overseen was abundantly clear.Source: Telegraph Finance | 20 Mar 2009 | 10:28 pm Fannie Mae CEO defends retention bonuses (AP)AP - Mortgage giant Fannie Mae's chief executive and a top government regulator warned Friday that canceling bonuses for workers at institutions receiving federal bailout money could undermine efforts to stabilize the U.S. housing market.Source: Yahoo! News: Business | 20 Mar 2009 | 10:27 pm Taxing Times: Got tax questions or problems paying? 'Super Saturday' is for youIf your deduction for mortgage-interest isn’t excessively large, then you likely won’t fall prey to the IRS’s new plan to audit taxpayers who take advantage of that tax break. The IRS’s spotlight is trained on people who take a mortgage-interest deduction of $100,000 or more.Source: MarketWatch.com - Top Stories | 20 Mar 2009 | 10:26 pm US stocks: First two-week gain in almost yearNEW YORK - Wall Street's mid-March rally is on hold, but the market still managed its first two-week gain in close to a year. After starting Friday mixed, stocks veered lower in the afternoon as financial stocks fell and investors...Source: New Zealand Herald - Business | 20 Mar 2009 | 10:25 pm Stocks: Second straight week of gainsStocks managed gains for the second week in a row despite tumbling Friday, as investors pulled back after the recent run.Source: Business and financial news - CNNMoney.com | 20 Mar 2009 | 10:20 pm Write-Offs: 03.20.09$$$ Connecticut to force AIG bonus recipients to testify [Greenwich Time] $$$ Prosecutors Release Letters From Madoff Victims [WSJ] $$$ Madoff Employee Breaks Silence [TDB] $$$ It's all coming together: "All areas of MER compliance got whacked today. Affected both the WFC and 222 Broadway. My whole team got let go except for 1, including ML's head of equity compliance." $$$ Job of the Week: BlackRock needs a Credit Derivative & Special Situations PM [DB Career Center] 
Source: Dealbreaker | 20 Mar 2009 | 10:06 pm Latin American Markets: Mexico surprises with 75-basis point rate cut; stocks, peso lowerMexican equities fall, losing gains that followed the central bank’s surprise decision to deliver a deeper-than-expected interest-rate cut, with policymakers citing concerns about deteriorating economic growth as reason for the surprise move.Source: MarketWatch.com - Top Stories | 20 Mar 2009 | 9:42 pm Argentina's farmers launch new strike against KirchnerArgentine farmers blocked roads as they called a sevenday strike on Friday reigniting a bitter yearlong standoff with the government over export taxes on soy beans the country's main crop.Source: Telegraph Finance | 20 Mar 2009 | 9:35 pm RBS traders hid toxic debtBillions of pounds of "toxic" subprime mortgages were bought by RBS traders in a spree not disclosed to the bank's board.Source: Telegraph Finance | 20 Mar 2009 | 9:29 pm AIG, Countrywide in legal feud over subprime loans (Reuters)Reuters - An AIG unit and Countrywide Financial Corp, now part of Bank of America Corp , have sued each other, alleging breach of contract, in a dispute over insurance losses for subprime mortgage loans now in default.Source: Yahoo! News: Business | 20 Mar 2009 | 9:13 pm Vikram Pandit: "We removed the people responsible for Citi's financial distress"CNBC reports Count Vikula has sent a message to Washington re: taxing the hell out of bonuses from any bank that receive TARP funds, arguing that everyone who's caused Citi to lose money is no longer with the company, and this isn't fair. Which kind of makes sense! Full memo sent to the Little Viks via the Journal: To:All Citi Colleagues
Source: Dealbreaker | 20 Mar 2009 | 9:07 pm Wall St held back by flagging banksUS stocks fell as the financial sector was weighed down by bad news for financial stocks and falling commodity pricesSource: Financial Times - US homepage | 20 Mar 2009 | 9:03 pm New York Times Co. stops executive 'gross-ups'New York Times Co., working to conserve cash during an unprecedented period of difficulty for the newspaper industry, said Friday that it will stop reimbursing executives for certain tax expenses.Source: MarketWatch.com - Top Stories | 20 Mar 2009 | 9:03 pm Capitalism lives on but let's learn our lessonsThe navelgazing has begun. As the financial crisis deepens even supposedly serious commentators are contemplating whether this global crisis could mark the end of capitalism.Source: Telegraph Finance | 20 Mar 2009 | 9:02 pm The Obama PortfolioSay goodbye to double digit territory. That's unfortunate. Still, a tidy gain thus far. Can it hold? The Obama Portfolio (Since Inception): +8.42% Earlier: The Obama Portfolio
Source: Dealbreaker | 20 Mar 2009 | 9:01 pm AIG: Washington guilty, tooArrogance. Incompetence. Greed.Source: Business and financial news - CNNMoney.com | 20 Mar 2009 | 9:00 pm McCain speaks up for GeithnerTim Geithner, the embattled US Treasury secretary, should be given a chance to succeed, says John McCain, the former presidential candidate, who is the first prominent Republican to speak up in Mr Geithner's defence amid growing calls for his resignationSource: Financial Times - US homepage | 20 Mar 2009 | 9:00 pm Jamie Dimon To Talk Some Sense Into Washington?
I'm sure most of you have seen the House of Representatives' bill regarding employee bonuses at firms that have received TARP funds. While it is necessary and appropriate to keep my comments brief, given the evolving issues, please know that the Operating Committee and Government Relations are working hard on all of the challenges we are currently facing. Thank you sincerely for staying focused on our clients and our business.
Source: Dealbreaker | 20 Mar 2009 | 8:42 pm US deficit 'to hit $1.8 trillion'The US budget deficit will hit $1.8 trillion this year, a record amount, according to US Congress estimates.Source: BBC News | Business | World Edition | 20 Mar 2009 | 8:40 pm GE: Transparency tops outlookGeneral Electric shares have been dogged by worries about GE Capital, and after a six-hour presentation on the finance unit the company quelled fears about transparency but could not put to rest fears about future losses.Source: Business and financial news - CNNMoney.com | 20 Mar 2009 | 8:39 pm LSE's eyewatering loss endured with stoicismSource: Telegraph Finance | 20 Mar 2009 | 8:37 pm Where The Jobs At?
The Foxy Lady wants to be sure that its three locations are fully staffed and prepared to meet their customers' demands....so the Providence, Rhode Island, strip club will be holding a job fair to fill 30 positions -- bartenders, waitresses, masseuses and strippers -- according to club manager Bob Travisono. Plus, the government won't have a say over your compensation! Or just go work for SAC. Same diff/no diff. Strip club fair offers solution to skimpy job market [CNN]
Source: Dealbreaker | 20 Mar 2009 | 8:33 pm Hear: Not So Toxic?On today's Planet Money: -- Alex Blumberg and David Kestenbaum break down the Federal Reserve's plan to inject over $1 trillion into the economy by buying mortgage backed securities and long term Treasury bonds. -- Industries usually take years or decades to make major changes. That's not the case in today's economic climate. NPR's Frank Langfitt tells us just how fast things are moving in Michigan's auto industry. -- There are still a lot of questions about toxic assets. How many are there? What are they worth? Who has them? Mike Thompson, a managing director at Standard & Poor's, takes a stab at answering a few of ours. The good news? Some of what we thought was toxic, might not be so bad. -- The Planet Money team visited Capitol Hill this week to find out how Congress is dealing with the current crisis. Alex Blumberg sat down with California Republican Congressman John Campbell, who made a surprising admission: he's confused. Bonus: In defense of bonuses, after the jump. Download the podcast; or subscribe. Intro music: Handsome Furs' "I'm Confused." Find us: Twitter/ Facebook/ Flickr Mike writes from Oakland, Calif.: My wife works for Wells Fargo. She got a bonus. We're not high level executives. We're a regular working family in the Bay Area. We both work and combined(!) our AGI will cross the government's threshold for the 90% tax. We're far from being flush with cash. In the last year, we've had our 401ks and investment accounts drop by about 30%, inclusive(!) of the contributions we made. We very recently had our home appraised for an aborted refinance. It showed our house lost about 30% of its value from the peak. So, all in all, the net worth of this working family is about two thirds of what it was in 2007. So, the lone bright spot recently was that she got a bonus from Wells for working hard all year in an area that was not responsible for any toxic assets. Now, based on the bill as passed by the House, it look like she's going to have to pay it back. We're expecting a second child in May, and we're trying to save money so we can buy a house in a better school district. Thanks, government. Penalize us. Good move. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 20 Mar 2009 | 8:31 pm Wall St. hurt by banks as TALF falls short (Reuters)
Source: Yahoo! News: Stock Markets News | 20 Mar 2009 | 8:30 pm British bankers on Merrill bonus listSenior London bankers expected to be on a list of 200 of Merrill Lynch's biggest bonus recipients demanded by the New York Attorney General.Source: Telegraph Finance | 20 Mar 2009 | 8:30 pm Deficit estimate: Up to $1.85 trillionThe U.S. budget deficit in 2009 is projected to spike to between $1.67 trillion and $1.85 trillion, according to estimates released Friday by the Congressional Budget Office.Source: Business and financial news - CNNMoney.com | 20 Mar 2009 | 8:27 pm Presented By:Source: Dealbreaker | 20 Mar 2009 | 8:25 pm Always Hurt By The Ones You LoveOk manager boy. If you gave your Scroll and Key buddies a wink and a nod so they could sneak their redemptions out before the freezes, well, you are in a world of hurt and some people are going to want to talk to you. Hell, with the present mood of the public, you may well get yourself 20 years. A surge in redemption suspensions and liquidations in the past year has created "particular concern as to whether hedge- fund advisers may be favoring their own interests above others," Walter said today in prepared testimony to the House Financial Services Committee. "Principals, employees or favored investors of the hedge-fund adviser may have received 'preferential redemptions' from the fund at issue." SEC Hunts for 'Preferential' Hedge-Fund Redemptions [Bloomberg]
Source: Dealbreaker | 20 Mar 2009 | 8:25 pm Solar startup gets $535M loanSource: Business and financial news - CNNMoney.com | 20 Mar 2009 | 8:23 pm HD flicks to Cramer picksTuesday's iPhone 3.0 event drew the headlines, but that wasn't the only news this week.Source: Business and financial news - CNNMoney.com | 20 Mar 2009 | 8:23 pm Bernanke defends bank bailoutsFederal Reserve Chairman Ben Bernanke responded to ongoing criticism of the government's efforts to keep alive institutions it has deemed "too big to fail," saying that this is an "enormous problem" that needs to be addressed.Source: Business and financial news - CNNMoney.com | 20 Mar 2009 | 8:16 pm Madoff must stay in slammerBernard Madoff, who masterminded the biggest Ponzi scam in history, lost his latest effort on Friday to get out of jail.Source: Business and financial news - CNNMoney.com | 20 Mar 2009 | 8:13 pm SFO may investigate Weavering Capital's failed flagship fundWeavering Capital forced to call in the administrators over concerns about its flagship fund.Source: Telegraph Finance | 20 Mar 2009 | 8:09 pm Hey! Let's Take A Meeting To Discuss Our Stock Price Being In The Toilet
Senior executives in our corporate headquarters are moving from two floors to smaller, simpler offices on a single floor...Based on estimates made when the project was initiated, we expect to generate savings in the next few years well in excess of the project costs. Kind of a fail. But they came back today with more, and now we're almost convinced this really will help the Big C in the long run: The new floor plan features offices with glass walls, designed to create a more open atmosphere. It has common areas to encourage spontaneous meetings of executives, according to people familiar with the matter. Plus, sacrifices are being made, and those should not go uncounted: People familiar with the company's plans said that certain design elements have been nixed since the initial planning phase, including a Zen garden.
Citi Defends A Redesign, Plans Reverse Stock Split [WSJ]
Source: Dealbreaker | 20 Mar 2009 | 8:05 pm CBO Predicts $1.8 Trillion DeficitThe Congressional Budget Office says it expects the deficit to reach $1.845 trillion this year, if President Obama's current budget proposals are enacted. The most recent estimate is nearly $600 billion more than the CBO predicted just six weeks ago before Congress passed the stimulus package and an omnibus spending bill. Although the CBO number is higher than the White House's own estimate of $1.75 trillion, House Budget Director Peter Orszag told the Wall Street Journal that a deary economic and fiscal outlook would not keep President Obama from accomplishing his budget goals. The Journal reports: ...Mr. Orszag said, "We remain confident that the four key principles that the president put forward for the budget -- in particular, that it must invest in health care, that it must invest in education, that it must invest in clean energy and that it must cut the deficit in half by the end of his first term -- will all be accomplished as the resolutions move through committee next week." The $1.845 trillion deficit estimate amounts to 13.1 percent of GDP. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 20 Mar 2009 | 8:00 pm Commodities ignore bearish basicsInvestors are hopeful but analysts are questioning the sustainability of the commodities market rally, with indicators suggesting the fundamental conditions in some sectors remain weakSource: Financial Times - US homepage | 20 Mar 2009 | 7:55 pm Oil slips as economy, equities weigh (Reuters)
Source: Yahoo! News: Stock Markets News | 20 Mar 2009 | 7:46 pm Citigroup names new chief financial officerEdward Kelly, a well-known investment banker, has been named the US bank's chief financial officer, replacing Gary Crittenden, who moves over to become chairman of Citi Holdings, a new unit created in January to dispose of the bank's 'non-core' businessesSource: Financial Times - US homepage | 20 Mar 2009 | 7:40 pm Watchdog fears market 'Ponzimonium'US federal regulators have warned of a 'rampant Ponzimonium' as they disclosed they are investigating 'hundreds' of possible scams in the aftermath of the $50bn fraud allegedly perpetrated by Bernard MadoffSource: Financial Times - US homepage | 20 Mar 2009 | 7:35 pm Ruth Madoff Just Wants Her God Damn Cheese
Ruth Madoff, looking like a desperate housewife, went grocery shopping last night, just hours after her swindler husband, Bernard, learned he would have to stay in jail, at least for now.
Source: Dealbreaker | 20 Mar 2009 | 7:21 pm We had no alternative, says BernankeUS authorities have no option but to prevent the disorderly failure of a large financial institution in current market conditions, the Fed chairman said, as he called on legislators to make dealing with the too-big-to-fail problem a top priority of regulatory reformSource: Financial Times - US homepage | 20 Mar 2009 | 7:18 pm Not Making That Mistake Again"Listen people. I don't want to see anymore nonsense over crazy bonuses. I want you people going over compensation with a fine tooth comb. If Suzie Whatsherface in HR is giving out Girl Bears for the employees of the month, I want to know what the list price on those is. If there is a training video being shown for free during "Sensitivity Week," I want to know what the production cost on that film was and why employees aren't buying admission tickets. If there is some sort of parking validation scheme, I want to know the discount rate. C'mon, people. Get it together." Fed Chief Calls for Scrutiny of Financial Pay [The New York Times]
Source: Dealbreaker | 20 Mar 2009 | 6:58 pm UK car production in record dropThe number of new cars produced in the UK declined 59% in February, its fifth straight monthly fall, figures show.Source: BBC News | Business | World Edition | 20 Mar 2009 | 6:38 pm Rethinking retirementInvestors are adjusting the way they manage their money, but those hoping to retire soon don't have time to build back wealth. Tess Vigeland talks to financial planner Stuart Ritter about what soon-to-be retirees can do to weather the storm.Source: Marketplace Money | 20 Mar 2009 | 6:21 pm Bargaining during the recessionJust because you're shopping in a corporate retail store doesn't mean you can't bargain down a price. Reporter Ashley Milne-Tyte proves that bargaining may be easier than you think.Source: Marketplace Money | 20 Mar 2009 | 6:12 pm Day in the Work Life: Jazz pianistOn this week's "A Day In the Work Life" we listen to jazz pianist Christopher Dawson.Source: Marketplace Money | 20 Mar 2009 | 6:06 pm Getting PersonalTess Vigeland and Chris Farrell answer listeners' pressing questions about stock values, buying vs. renting and what we mean when we talk about income.Source: Marketplace Money | 20 Mar 2009 | 6:03 pm How Many Toxic Assets Are There?We've gotten a lot of questions from you about toxic assets. What does a toxic asset look like? How many there are? And of course: When oh when will they go away? What does one look like? Here is the documentation for a residential mortgage backed security. It's 402 pages long. This one contains 4,921 mortgage loans, which had a value of $1.18 billion. Here's an evaluation of how this particular asset is doing. You can find more of these things here. How many are going bad? Here's a table showing what rating S&P (one of the three major rating agencies) gave some of these things initially, and how much the ratings have fallen. This report summarizes the state of affairs. About 40% have been downgraded. How many toxic assets are there? That report describes a pool that was (initially) worth $3.28 trillion. But the true pool of toxic assets is arguably larger, because it now includes bundles of things like credit card debt, or car loans that are also going bad. Mike Thompson a managing director at S&P says he has heard estimates of $12 trillion globally. What are they worth? Many many assets have plunged in value. They're filled with bad loans, made to people who can't pay them back. But Thompson argues that some subset of these toxic assets are actually totally fine, though the market is really freaked out about them. Here's an interesting study he worked on that lays that out. It looks at pools of mortgages made to people with good credit ratings. And it finds that even if the economy gets a lot worse, many of these "toxic assets" will still be worth their full value. Though, if you had to sell one of those things right now, the market would only give you 50 cents on the dollar. We'll get into this some more on the podcast today. » E-Mail This » Add to Del.icio.us
Source: NPR Blogs: Planet Money | 20 Mar 2009 | 6:02 pm Our Rig Count Keeps Dropping, Despite Rising Oil (BHI, OIL, USO)
The iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) was up 0.5% but has gone back to flat, and the US OIL ETF (NYSE: USO) was up 0.5% but has rolled over into almost negative territory. On last look, spot oil from NYMEX was at $51.18. T. Boone Pickens recently made the call of “$60 before $40″ when oil was barely above $40.00 at the time. If these rig counts keep dropping at the same rates that we have been seeing, then OPEC won’t ever have to debate whether they should be cutting production. The production cuts are happening right here despite our calls to get off foreign energy. Demand erosion has continued for oil, but not at the same pace that these rig counts keep coming down. It seems that the old days of being profitable at $20 are toast. Some companies don’t even make money at $50 oil on many of their newer operations. At least that is what they say. We won’t hold our breath for this to occur, but maybe the new powers that be will ultimately give some new drilling incentives. Whether we want to end up entirely using solar and nuclear and other forms of alternative energy entirely, the reality is that oil use is going to be around as long as we are all still alive. The question is just how much of it will be used. It looks like foreign energy dependence is going to continue, so you might as well capitalize off of it. Jon C. Ogg       Source: 247 Wall Street | 20 Mar 2009 | 6:01 pm Bernanke says Fed has exit strategy from credit policy (Reuters)Reuters - Federal Reserve Chairman Ben Bernanke on Friday said the Fed's buying of longer-dated U.S. Treasuries would "taper off" when the economy no longer needed help, allowing the Fed to cease its emergency support.Source: Yahoo! News: Business | 20 Mar 2009 | 5:58 pm Bernanke says Fed has exit strategy from credit policyWASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke on Friday said the Fed's buying of longer-dated U.S. Treasuries would "taper off" when the economy no longer needed help, allowing the Fed to cease its emergency support.Source: Reuters: Business News | 20 Mar 2009 | 5:58 pm FTSE closes higher on insurers (AFP)
Source: Yahoo! News: Stock Markets News | 20 Mar 2009 | 5:49 pm Don't get hooked by phishing scamsForeclosure scammers aren't the only ones preying on the vulnerable. Online scammers, or phishers, are also prowling the Web for unsuspecting victims. Tess Vigeland talks to Jorgan Wouters of Consumer Reports about how to avoid being scammed.Source: Marketplace Money | 20 Mar 2009 | 5:41 pm Foreclosure scams on the risePeople facing foreclosure are becoming vulnerable to scammers promising to help modify loans. Reporter Rachel Dornhelm reports on one such scam in Oakland, Calif. and asks experts what consumers can do to stay safe.Source: Marketplace Money | 20 Mar 2009 | 5:36 pm Straight StoryThe IRS recently announced that victims of the Madoff scandal can claim up to 95 percent of their losses on their taxes. Tess Vigeland and Chris Farrell discuss what implications this decision has on the tax code and on victims of future Ponzi schemes.Source: Marketplace Money | 20 Mar 2009 | 5:34 pm Old financial rules no longer applyTess Vigeland talks to New York Times columnist Ron Lieber about how some of the old rules about investing and managing money don't make sense during the current financial climate.Source: Marketplace Money | 20 Mar 2009 | 5:32 pm Bernanke Keeps Challenging ‘Too Big to Fail’ Notions
Bernanke’s fourth point about addressing the “Too Big to Fail” problem was, “Improved resolution procedures for these firms would help reduce the too-big-to-fail problem by giving the government the option of safely winding down a systemically important firm rather than keeping it operating.” To this, he received a big applause. Keep in mind that community and regional bankers were cheering over what they wanted to hear. They have been under attack by the large money center banks and super regional banks for years and years, so it is no shock that these bankers might cheer and love a huge banking institution being unwound. Both Bernanke and Geithner have stressed notions against nationalization. That probably hasn’t changed. Today’s tune by Bernanke is not a brand new one, but it does bring up questions. Last week’s massive bank rally was partly on the notion that no majors disappear. Today’s speech and prior comments probably don’t change that. But there are still more questions that are unknown, and there will probably continue to be more questions than answers for some time. Lastly, we want to keep in mind that this is still unfinished business. We do not have a full stress test yet, we do not have what the laws will be going forward, and we do not even have a consensus yet on how much anyone in the financial industry will be allowed to earn if they have accepted any help from the government. Bernanke’s full speech is here. Jon C. Ogg       Source: 247 Wall Street | 20 Mar 2009 | 5:24 pm Are money market funds safe?The money market industry is proposing changes that would lower yields, improve safety and place restrictions on certain funds. But should you choose a money market account over a savings account? Reporter Tamara Keith asks the experts.Source: Marketplace Money | 20 Mar 2009 | 5:20 pm Arthur Levitt Calls AIG Bonus Tax `Extreme'Source: Bloomberg - All Podcasts | 20 Mar 2009 | 5:13 pm A pivotal push to Go Green at expoCash Peters reports from a Go Green Expo in Los Angeles, where environmentalists say it's a critical time for the green movement.Source: Marketplace | 20 Mar 2009 | 5:13 pm Unemployment expansion a tough sellWith unemployment benefits soon to run out for 500,000 laid-off workers, the federal government is encouraging states to sign up for more funding. But some governors don't want the money. Mitchell Hartman reports.Source: Marketplace | 20 Mar 2009 | 5:12 pm Weekly Wrap: Debating AIG's bonusesAIG's $165 million in bonuses with bailout money dominated headlines this week. Kai Ryssdal talks with The Wall Street Journal's Heidi Moore and John Carney of Clusterstock.com about how the story stirred emotions.Source: Marketplace | 20 Mar 2009 | 5:12 pm Airfare war not so bad for airlinesTo get consumers traveling again, airlines are slashing fares to compete with low-budget carriers like Southwest. As Tamara Keith reports, the low fares aren't hurting airlines as much as you may think.Source: Marketplace | 20 Mar 2009 | 5:12 pm Bad economy stalls Baltimore makeoverAn effort to turn one of Baltimore's most-neglected neighborhoods into a biotech hub has stalled due to the recession, leaving developers and a community in limbo. Cathy Duchamp reports.Source: Marketplace | 20 Mar 2009 | 5:12 pm Levy Says Housing Demand Will Stabilize in Second Half of 2009Source: Bloomberg - All Podcasts | 20 Mar 2009 | 5:09 pm StephanomicsEurope's trouble: it's not just about fiscal stimulusSource: BBC News | Business | World Edition | 20 Mar 2009 | 5:08 pm Indicator: More CoinsHans writes: I was at our credit union the other day and one of the employees (I think the manager) told us a story that reflects these hard economic times. He said that in San Francisco there is a bank that saw a huge increase in the amount of coins coming in. Apparently, people were breaking their piggy banks and raiding their coin bottles to turn in at the bank. In fact, the volume got so large that the bank had to bring in truck trailers to put the coins. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 20 Mar 2009 | 5:03 pm McCormick Sees `Unprecedented' Fed Policy Response to RecessionSource: Bloomberg - All Podcasts | 20 Mar 2009 | 5:00 pm U.S. SEC probes subprime, builders, hedge funds (Reuters)Reuters - Several U.S. investigations into subprime lenders involve possible insider trading before announcements of negative news about the lender, a Securities and Exchange Commission member said on Friday.Source: Yahoo! News: Stock Markets News | 20 Mar 2009 | 4:53 pm U.S. SEC probes subprime, builders, hedge funds (Reuters)Reuters - Several U.S. investigations into subprime lenders involve possible insider trading before announcements of negative news about the lender, a Securities and Exchange Commission member said on Friday.Source: Yahoo! News: Business | 20 Mar 2009 | 4:53 pm Taxing bonuses: Is this good business?Congress is moving toward legislation to tax bonuses that companies receiving federal bailouts paid to employees. Is this a good way for government to do business? Steve Henn reports.Source: Marketplace | 20 Mar 2009 | 4:53 pm TALF's unintended consequencesWith the TALF program, the Fed is lending money to investors so they can buy asset-backed securities to get the credit markets moving again. But the companies likely to profit are the very ones that got us into this mess. Jeremy Hobson reports.Source: Marketplace | 20 Mar 2009 | 4:52 pm General Motors Rated `Sell' In New Coverage at UBSSource: Bloomberg - All Podcasts | 20 Mar 2009 | 4:42 pm Anger And Nudity In UkraineListener Brad responded to my call for stories of international economic anger. He points our attention to Ukraine where things look really, really bad. Here are a few of the things that are way, way down: the currency, the steel and chemicals exports and jobs. Banks are hoarding cash. People are facing days without heat or water. Are people angry? Yes. They are gathering for protests, threatening to block roads, calling for their leaders to step down and taking off their clothes in banks. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 20 Mar 2009 | 4:34 pm French aid prompts Renault moveFrench carmaker Renault is to shift some car production back to France from Slovenia after the guarantee of state aid.Source: BBC News | Business | World Edition | 20 Mar 2009 | 4:29 pm Mass Layoffs Up AgainThe Bureau of Labor Statistics has released the latest figures for mass layoffs -- meaning at least 50 people from a single company opening unemployment claims in a five-week period. Last month, there were 2,796 mass layoffs up 542 from January. In total, 295,477 workers lost their jobs in February as a result of these layoffs. Also on the rise, the total number of people receiving unemployment benefits -- in the week ending March 7, 185,000 more people filed for benefits. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 20 Mar 2009 | 4:23 pm Brian Gaynor: Sticky situation could have been avoidedThis week's Nuplex capital raising was a shambles and reflects poorly on the company's board and senior management as well as First NZ Capital, its financial advisers. The original proposal was changed dramatically, disclosure...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Millions gone in a WooshWireless internet operator Woosh burned through $21 million in the last financial year as it hung on in the telecommunication market. The result is on a par with previous years - the company has reported losses around the $20 million...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Airport landing fee increases irk airlinesAirlines have hit out at new landing fees at Christchurch Airport they calculate will push up charges immediately by 28 per cent and by a total of up to 66 per cent by July next year. That means a Boeing 777 will suffer an increased...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Britomart project at vital stageGazing up at a grey evening sky from the new Roukai Lane, Peter Cooper wondered about the chance of rain. On Thursday night the developer of Auckland's biggest urban regeneration project was sitting on a rostrum flanked by Ngati...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Think tank recommends closer Sino-US tiesTo relieve tensions, ease up on mistrust and develop more respect. That's a leading policy think tank's prescription for the leaders of the United States and China. The pair could make the world a better place by working in harmony,...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Air NZ seeks to have 'gagging order' liftedAntagonism between Air New Zealand and the Commerce Commission spilled over yesterday as the regulator hit back at claims by the airline it was being prevented from defending itself against cargo cartel accusations. Air New Zealand...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Tax case against APN is droppedThe Inland Revenue Department has dropped a tax case against APN News & Media, owner of the New Zealand Herald. IRD had argued an old agreement to lease back the company's mastheads and claim a tax deduction was not legal. APN...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Changing of the guard at Commerce CommissionThe incisive economist who rattled some of New Zealand's most powerful business leaders will no longer be blasting cartels and monopolies. Paula Rebstock departs as Commerce Commission chairwoman on March 31 after what competition...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Rebstock's replacement picked from a field of onePaula Rebstock's abrupt exit from the Commerce Commission led to an unorthodox process of appointing her replacement, Mark Berry. It appears Berry was the only name the Ministry of Economic Development forwarded to replace Rebstock. "Given...Source: New Zealand Herald - Business | 20 Mar 2009 | 4:00 pm Madoff set to remain behind barsUS financier Bernard Madoff is denied bail while he awaits sentencing for masterminding a $50bn investment fraud.Source: BBC News | Business | World Edition | 20 Mar 2009 | 3:53 pm Congress Readies Bonus TaxA bill to tax the bonuses paid to employees of AIG and other companies that take bailout funds is headed to the Senate. The House overwhelming approved a 90 percent tax on the bonuses yesterday, the Senate proposal calls for a 70 percent tax. Last night on The Tonight Show, President Obama told Jay Leno he was "stunned" by the AIG bonuses and vowed again to do everything possible to get the bonuses back. Yesterday House Financial Services Committee Chairman Barney Frank proposed legislation to ban bonus payments at companies getting U.S. aid until the government is repaid. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 20 Mar 2009 | 3:43 pm This Week’s Weird Jobs
There’s nothing quite like getting paid to do something you do anyway. Like stay awake all night, be paranoid, or think about sex, as evidenced in the jobs below: 1. Los Angeles: 65 + WITH INSOMNIA COMPENSATION UP TO $1350 If you have chronic problems staying asleep, you may qualify for a medical research study in out stat-of-the-art sleep clinic and receive an investigational medication for poor sleep. Qualified participants are 65 or older: * Receive compensation up to $1350 If you don’t sleep at all, that amounts to about $31/hour. Not bad compensation for sitting around with a bunch of electrodes glued onto your chest. 2. United States: Romance Specialist For Pleasure Party Company We are an upscale lingerie and pleasure party company offering woman only educational parties. We are expanding our operations and are willing to train the right person to represent us as a Romance Specialist. If you are outgoing and love Romance please email us your resume or your information, with the best time to call and what area you are interested in. Must be 18 years old. 3. Los Angeles: Loss Prevention Agent Loss Prevention Agents work undercover in retail locations watching for shoplifters. Agents watch for shoplifters, recover merchandise, write reports and work with local law enforcement officers. Agents must be able to speak, read and write English, have a clean criminal background, good transportation, a valid driver’s license and be dependable. If you are looking for a rewarding job with opportunities for advancement, then we have a place for you. Must be willing to glare suspiciously in boring retail settings for long periods of time. Just remember: Never trade luck for acting skill.
E-mail resume. Must be immune to winces, bleeding gums, and occasional yelps of pain. Happy Friday! Source: Business Pundit | 20 Mar 2009 | 3:28 pm A Child’s Drawing of Scissors
Source: Business Pundit | 20 Mar 2009 | 3:00 pm Herrmann Sees 30-Year Mortgage Rates at 4% to 4.5%Source: Bloomberg - All Podcasts | 20 Mar 2009 | 2:54 pm Stamenkovic Is `Bullish' on U.S. Treasury BondsSource: Bloomberg - All Podcasts | 20 Mar 2009 | 2:50 pm Lynch Says Copper Price Indicates Recession Is EndingSource: Bloomberg - All Podcasts | 20 Mar 2009 | 2:48 pm EU urges doubling of IMF capitalThe EU urges the G20 leading and emerging economies to double the money available to the IMF to $500bn (£344bn).Source: BBC News | Business | World Edition | 20 Mar 2009 | 2:46 pm First black FTSE 100 boss at PruTidjane Thiam will become chief executive of Prudential in October, becoming the first black head of a FTSE 100 company.Source: BBC News | Business | World Edition | 20 Mar 2009 | 2:44 pm Simon’s Dilution Takes Away Some Debt Worries (SPG)
Simon plans to use the net proceeds to “partially repay the outstanding balance of its $3.5 billion unsecured credit facility and for general corporate purposes.” The stock is being offered under a shelf registration, and the underwriters have been granted a 2.25 million-share overallotment option. Simon’s outstanding float is about 180 million shares, so the new issue is dilutive by more than 6%. But this will help to ease some of the woes of credit issues and credit maturities coming due as the commercial REIT sector has been locked out of the capital markets until recently. The company’s long-term debt is $18 billion and change. Borrowing money to pay the mortgage is costing Simon this morning. Shares are trading down nearly 6%, at $32.43, which is within half a buck of the company’s 52-week low and down about 70% from last year’s high. Usually, these deals of selling securities to meet demands come with more questions, but this one may come another sigh of relief for a very battered sector. Paul Ausick       Source: 247 Wall Street | 20 Mar 2009 | 2:44 pm The State Of Starbucks (SBUX):Inside its existential crisis.By Dan Mitchell of TheBigMoney Most years, Howard Schultz, chairman and CEO of Starbucks, uses the annual shareholders meeting to introduce a major new product or a cool new piece of coffee-making equipment. Something buzzworthy. At this year’s meeting, held in Seattle on Wednesday, there was nothing in the way of buzz, and Schultz introduced nothing new, except for a focus on “value” and a fresh effort to squash the “myth” that “there is a $4 cup of coffee at Starbucks.” Problem is, it’s not really a myth. Some of Starbucks’ coffee drinks do cost $4 and even more. But even when they cost less, they are still an extravagance. And in a recession, extravagances are the first thing to go. Tagged: SBUX      Source: 247 Wall Street | 20 Mar 2009 | 2:39 pm The Fallacy of Buffett Takeover Lists (BRK-A, SYY, VFC, DHR, BNI, WFC, COP)
Where this is most interesting is that Buffett has already stated that an offering price needs to be in place. He even noted, “We don’t want to waste our time or that of the seller by talking, even preliminarily, about a transaction when price is unknown.” Buffett said outright that he will not engage in unfriendly takeovers and won’t participate in business auctions. His preferred target is the $5 to $20 billion range. But here is where there is a stretch between what is going around right now and what Buffett himself has said: “We are not interested, however, in receiving suggestions about purchases we might make in the general stock market.” It seems that the mere act of pointing names out could in fact make Mr. Buffett turn the other way. Bloomberg yesterday ran a list of 46 companies which fit into the criteria. What is odd about this list is that it seems that the screen criteria only ran numbers that fit into what Buffett said. But many of these names are going to be too cyclical or too dependent upon too many factors for Buffett to want to buy them. More importantly, a lot of these companies have been beaten up too much for management to want to sell. The three big names that were used as points of reference were food supplier Sysco Corp. (NYSE: SYY), clothing maker VF Corp. (NYSE VFC), and medical and consumer tool maker Danaher Corp. (NYSE: DHR). While Danaher’s policy is unknown to us, our own screening in the past has put Sysco as a company that would not want to be acquired or one that would require too large of a premium for Mr. Buffett to consider upon higher prices. Our own screening in the past also put VF Corp. as a company that only wants to be an acquirer of brands rather than prey. There is one company which Buffett has in his current portfolio where Buffett could make a play, and that is Burlington Northern Santa Fe (NYSE: BNI). Its market cap is $19 billion now that it has fallen by more than half, and Berkshire already holds more than 20% of the stock. The question boils down to whether or not management would sell at depressed levels. Buffett might just want to take a larger stake here. Wells Fargo & Co. (NYSE: WFC) is not one that Buffett would acquire. Even after the drop, it is far too large. But he is a huge holder, even in his personal account, and the recent woes took the company down so far that Buffett may have snapped up more shares. We discussed this with some traders last week as being a possibility, but there has not been any word on this notion yet. Even with the shares down so much, his stake that we already knew about in Q4 is currently worth over $4 billion. Some target companies were in the oil patch and a large steel company was in there. Buffett already got his fingers pinched when he tried to gobble up a lot of Conoco Phillips (NYSE: COP), and that position looked slightly lower than before. Either way, the recent swings in metals and commodities probably makes Buffett want to steer clear. He might believe in the “forever” model in those, but if forever comes with too much pain or too many headaches he is likely to stay away. Conoco was one of our own energy stocks which we think can double, and that assumes no Buffett actions. One thing to remember about Buffett is that he doesn’t like being predictable. His appetite is there for a deal, that is obvious. Ultimately, any of these companies could still fit the bill for Buffett. It just has to be friendly and we think it has to not be something that has burned him lately. If it was as easy as having historically low P/E’s right now, Buffett would be out of cash many times over because of all the possibilities. But whatever business he chooses as that old former phrase of “a whale of a deal” is going to have to be an absolute slam dunk. As always, here is the full list of Buffett & Berkshire holdings. JON C. OGG       Source: 247 Wall Street | 20 Mar 2009 | 2:09 pm Market Sees Rising Chance That Geithner Will Be Out At Treasury, Taking AIG Blame Won’t HelpThe calls for the head of U.S. Treasury Secretary Tim Geithner are growing daily and with news breaking late tonight that Geithner is taking the blame for the AIG (NYSE: AIG) bonuses, this trend will likely continue. inTrade, the prediction market which lets folks trade on political futures, is seeing an increasing chance that Geithner will depart.       Source: 247 Wall Street | 20 Mar 2009 | 1:39 pm What Would Donald (Duck) Do?...with a lame job. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 20 Mar 2009 | 12:56 pm This Week’s Biggest ‘GOING CONCERN’ Stocks (AVR, BBI, CROX, EBHI, MGM) Will a 'going concern' note burn your money? We are still in the midst of “annual report season” as companies have been submitting their 10-K filings with the SEC. Or in some cases delaying those filings. There is one theme that has been much stronger during this recession than during any recent years, and that is the dreaded “GOING CONCERN” notice from auditors in the amount of companies which are well known. And this year’s round of GOING CONCERN notes has a host of names that were formally great stocks. A going concern is the ability of a company to continue to operate as things are now and not go out of business or have to liquidate its assets. The out is of course that the company must be able to raise enough capital or exit certain operations to stay operational. Here are some of the big names with the notes that have come out this week: Blockbuster Inc. (NYSE: BBI) posted a loss after items, and the company’s CEO said that many other companies are also facing the same challenges. The auditor’s note of a going concern is said to be in place until its financing is complete and its liquidity is assured. The good news is that this one rose this week on the financing discussions. It seems that video rental stores are still like smokers, the numbers keep declining each year yet they still exist. Crocs, Inc. (NASDAQ: CROX) said that its annual report will have a going concern note from independent registered public accounting firm, Deloitte & Touche, that raises doubt about the company’s ability to continue as a going concern. The company had more than $51 million in cash and equivalents and $22.4 million in credit facility borrowings which mature next month. Ugly shoes that were meant for gardening couldn’t stay mainstream for too long. Eddie Bauer Holdings Inc. (NASDAQ: EBHI) was also hit hard this week on its massive losses. The company’s report will have a going concern note because of the current economic situation and restrictions under amendments to its term loan agreement. It looks like the company was in compliance at the end of 2008 but 2009 looks like it will be a different story. The preppy retailer has not gone without a troubled history. MGM Mirage (NYSE: MGM) posted a fourth-quarter net loss after recording a $1.2 billion write-down. This reflects a difficult environment, but it has also prompted the MGM’s auditor to raise doubts about its ability to continue as a going concern. Can people afford to go to casinos in a recession when they know that the odds are stacked against them when they walk in the doors? There were many others over the last week, namely in the auto parts sector and in speculative companies. But these companies above either have household names that have been there for some time or were not that long ago traded as great growth stocks. What a difference a year makes. JON C. OGG       Source: 247 Wall Street | 20 Mar 2009 | 12:46 pm At the bar last night...Guy #1: I agree they should take back the AIG bonuses. But they should also take back the salaries of the people at the Securities and Exchange Commission. And Alan Greenspan's salary.... Guy #2: I don't care about the bonuses. I really don't. Maybe because I don't care about money in general. But I just don't feel any moral outrage. And who knows, maybe some of those guys getting bonuses were just doing their jobs, you know 'hey guy: analyze this thing for me' Were they all really in a position to know? You can't blame someone unless they should have known. I'm sure the government's going to get its money back eventually. So who cares? » E-Mail This » Add to Del.icio.us
Source: NPR Blogs: Planet Money | 20 Mar 2009 | 12:46 pm World markets mixed on worries about US inflation (AP)
Source: Yahoo! News: Stock Markets News | 20 Mar 2009 | 11:54 am Top Analyst Upgrades & Downgrades (EXPE, F, JNJ, CTXS, DSX, EGLE, GM, JCI, HOT, URBN)These are the top upgrades and downgrades from Wall Street analysts this Friday morning: Expedia (EXPE) Raised to Buy at Citigroup. JON C. OGG March 20, 2009 Tagged: CTXS, DSX, EGLE, EXPE, F, GM, HOT, JCI, JNJ, URBN      Source: 247 Wall Street | 20 Mar 2009 | 11:50 am
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