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Wall Street Plays Hardball

Tue, 24 Nov 2009 00:00:00 -0800

Business Week - By Theo Francis - Nov. 24 (Special Report) - Across the nation, local governments and related public entities, already reeling from the recession, face another fiscal crisis: billions of dollars in fees owed to UBS, Goldman Sachs (GS), and other financial giants on investment deals gone wrong.

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Fed under fire as public anger mounts

Mon, 23 Nov 2009 00:00:00 -0800

Associated Press - By Tom Raum - Nov. 23 (News Analysis) - Suddenly the Federal Reserve is everybody's punching bag. Strip the Fed of its bank regulation powers, some in Congress are demanding. Get probing audits of its behind-the-scenes operations, others say. The chairman of the Federal Reserve Board is always fair game for criticism and second-guessing, usually over interest rate actions. But this year the criticism is much broader as Congress responds to widespread public anger that the Fed bailed out Wall Street but not ordinary Americans, and with unemployment in double digits.

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Danger lies in threat to Fed independence

Thu, 19 Nov 2009 00:00:00 -0800

Washington Post - By Alan Blinder - Nov. 19 (Special Report) - H.R. 1207 seems innocuous enough. The overall question it raises sounds fair: After all, why should the Fed be immune from audit?

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What is expert advice worth on the stock market?

Thu, 12 Nov 2009 00:00:00 -0800

Haaretz - By Eli Malki - Nov. 12 (Special Report) - How seriously should you take their forecasts? Does an understanding of economics and the capital market give you tools to peer into the future? A paper by psychology professors Gustaf Torngren and Henry Montgomery of Stockholm University - "Worse Than Chance? Performance and Confidence among Professionals and Laypeople in the Stock Market" - demonstrates that Lao Tzu nailed it on the head.

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Nine states pose fiscal threat to US recovery

Wed, 11 Nov 2009 00:00:00 -0800

Financial Times - By Nicole Bullock - Nov. 11 (News Report) - Some of the same financial troubles that have pushed California toward economic disaster are wreaking havoc in nine other states and posing a threat to the nascent recovery, according to research released

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Windfall Is Seen as Bank Bonuses Are Paid in Stock

Sun, 08 Nov 2009 00:00:00 -0800

New York Times - By Louise Story - Nov. 08 (Special Report) - Even as Washington tries to rein in Wall Street pay, bankers are likely to make unusually large gains on the stock grants and options they received after shares in their companies fell sharply during the financial meltdown.

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Why did blue-chip Goldman take a walk on subprime's wild side?

Wed, 04 Nov 2009 00:00:00 -0800

McClatchy - By Greg Gordon - Nov. 04 (News Report) - Goldman Sachs was one of the last Wall Street giants to enter the subprime lending world, but when it did, it quickly climbed into bed with profligate, highflying firms — companies such as New Century Financial Corp. In at least nine deals from 2002 to 2007, Goldman sold bonds backed by more than $5 billion of New Century's mortgages, one even after the California lender's underwriting criteria all but disintegrated and a cash squeeze paralyzed its operation. Goldman also marketed at least three secret offshore deals bearing New Century's name.

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CIT files for bankruptcy: A prepackaged pratfall

Mon, 02 Nov 2009 00:00:00 -0800

Economist - Nov. 02 (News Analysis) - THE most gut-wrenching failures may be over, but the financial crisis continues to claim the occasional big victim. CIT, a lender to small and medium-sized businesses, from clothing retailers to Dunkin’ Donuts franchisees, filed for bankruptcy on Sunday November 1st after failing to garner enough support for a debt-restructuring plan. With $71 billion in assets, the century-old firm is only one-ninth the size of Lehman Brothers, which collapsed in September 2008. Nevertheless, its Chapter 11 filing augurs ill for America’s corporate minnows, whose financing options have narrowed dramatically over the past year.

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Why Keep Geithner?

Mon, 02 Nov 2009 00:00:00 -0800

MSNBC - By Dylan Ratigan - Nov. 02 (News Analysis) - A year ago it was revealed to the American people that our banking system was a legalized Ponzi scheme in which bank and insurance CEOs paid themselves billions of dollars in personal compensation to lend and insure assets with money they didn't have

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Economy grows by 3.5 percent, signals recession may have ended

Thu, 29 Oct 2009 00:00:00 -0700

Washington Post - By Neil Irwin - Oct. 29 (News Report) - The U.S. economy roared to life in late summer, as gross domestic product rose at a 3.5 percent annual rate in the July through September period. It was the best quarter for growth in two years though analysts warned that it was fueled largely by government recovery programs.

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American bank failures: An uncelebrated century

Mon, 26 Oct 2009 00:00:00 -0700

Economist - Oct. 26 (News Analysis) - Partners Bank of Naples, Florida, earned a dubious distinction on Friday October 23rd. It became the 100th American bank failure of the year. On the same day six other lenders—two more in Florida and banks in Minnesota, Wisconsin, Illinois and Georgia—joined the rollcall of failure in the aftermath of the credit crisis.

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Trying to Rein In ‘Too Big to Fail’ Institutions

Mon, 26 Oct 2009 00:00:00 -0700

New York Times - By Stephen Labaton - Oct. 26 (News Report) - Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.

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How to change too-big-to-fail ethic?

Mon, 26 Oct 2009 00:00:00 -0700

Philadelphia Inquirer - By Harold Brubaker - Oct. 26 (News Report) - Thirty years ago, the biggest bank in Philadelphia was in deep trouble because of a bad bet on interest rates. First Pennsylvania, then the oldest bank in the nation, had invested heavily in long-term government securities paying fixed rates of interest. When Paul Volcker, then the chairman of the Federal Reserve, raised interest rates in 1978 to fight inflation, the bank was crushed; it had to pay more to borrow than it earned on the bonds.

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U.S. to Order Steep Pay Cuts at Firms That Got Most Aid

Thu, 22 Oct 2009 00:00:00 -0700

New York Times - By Stephen Labaton - Oct. 22 (News Report) - The seven companies that received the biggest bailouts are expected to cut the salaries of their 25 best-paid executives by an average of about 90 percent from last year.

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Wall Street's Naked Swindle

Tue, 20 Oct 2009 00:00:00 -0700

Rolling Stone - By Matt Taibbi - Oct. 20 (Special Report) - Like all the great merchants of the bubble economy, Bear and Lehman were leveraged to the hilt and vulnerable to collapse. Many of the methods that outsiders used to knock them over were mostly legal: Credit markers were pulled, rumors were spread through the media, and legitimate short-sellers pressured the stock price down. But when Bear and Lehman made their final leap off the cliff of history, both undeniably got a push — especially in the form of a flat-out counterfeiting scheme called naked short-selling.

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How Moody's sold its ratings -- and sold out investors

Sun, 18 Oct 2009 00:00:00 -0700

McClatchy - By Kevin G. Hall - Oct. 18 (Investigative Report) - As the housing market collapsed in late 2007, Moody's Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge

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Obama advisers say all options weighed for creating jobs, let stimulus spending keep working

Sun, 18 Oct 2009 00:00:00 -0700

Associated Press - By Douglass K Daniels - Oct. 18 (News Report) - WASHINGTON - President Barack Obama is considering all options to create jobs, including another stimulus package, while trying to pull the economy out of a deep recession and deal with a record deficit, White House advisers said Sunday. With more

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Geithner Aides Reaped Millions Working for Banks, Hedge Funds

Wed, 14 Oct 2009 00:00:00 -0700

Bloomberg - By Robert Schmidt - Oct. 14 (News Report) - Some of Treasury Secretary Timothy Geithner’s closest aides, none of whom faced Senate confirmation, earned millions of dollars a year working for Goldman Sachs Group Inc., Citigroup Inc. and other Wall Street firms, according to financial disclosure forms.

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US FDIC Chief: "Too Big to Fail" Must End for All

Mon, 05 Oct 2009 00:00:00 -0700

Reuters - By David Lawder - Oct. 05 (News Report) - FDIC Chairman Sheila Bair, speaking to the Institute of International Finance meeting here, said a U.S. proposal to create the authority to shut down failing systemically important financial firms may need to be extended to insurers and hedge funds.

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Coalition Talks: Merkel's New Government Unlikely to Pursue Radical Reforms

Mon, 28 Sep 2009 00:00:00 -0700

Der Spiegel - Sep. 28 (News Report) - Chancellor Angela Merkel's conservatives and their new partners, the Free Democrats, could reach a coalition deal by the end of October. But it may not be easy. Tax cuts and burgeoning government debt could slow down the talks.

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U.S. Job Seekers Exceed Openings by Record Ratio

Sun, 27 Sep 2009 00:00:00 -0700

New York Times - By Peter S. Goodman - Sep. 27 (News Report) - Despite signs that the economy has resumed growing, unemployed Americans now outnumber openings by six to one, the worst ratio since the government began tracking open positions in 2000.

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The G20 summit: Regaining their balance

Sat, 26 Sep 2009 00:00:00 -0700

Economist - Sep. 26 (News Analysis) - The last time the leaders of the Group of Twenty (G20) met, in London in April, their unenviable task was to steer the world economy away from a 1930s-style depression. They succeeded, thanks to an unprecedented fiscal and monetary gusher and a raft of measures to prop up teetering financial giants. But while stability has returned, much more needs to be done to put economies, and particularly their banking sectors, on a sounder footing. The group’s aim this week in Pittsburgh was to “turn a page on the era of irresponsibility” by adopting reforms to “meet the needs of the 21st century economy.” But writing a new chapter will require agreement on precisely what those needs are, and the final communiqué gave sceptics plenty to chew on.

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G-20 Unites to Curb Bank Pay, Align Economic Policy

Sat, 26 Sep 2009 00:00:00 -0700

Bloomberg - By Simon Kennedy, Rich Miller - Sep. 26 (News Report) - Group of 20 leaders built on the common front they forged in fighting the financial crisis to chart a shared path toward a more stable banking system and a stronger global economy.

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G-20 Agrees to Deal on Global Economic Policy

Sat, 26 Sep 2009 00:00:00 -0700

Wall Street Journal - By Bob Davis, Jonathan Weisman - Sep. 26 (News Report) - The Group of 20 nations agreed to put in place an elaborate structure to change global economic policy, but without any enforcement mechanism to make countries live up to their word, critics warned it could be toothless.

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Global Economic Forum to Expand Permanently

Fri, 25 Sep 2009 00:00:00 -0700

New York Times - By Edmund L. Andrews - Sep. 25 (News Report) - Global leaders will announce Friday that the once elite club of rich industrial nations known as the Group of 7 will be permanently replaced as a global forum for economic policy by the much broader Group of 20 that includes China, Brazil, India and other fast-growing developing countries, American administration officials said.

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