Defenders of former Bank of America (BAC) CEO Ken Lewis, who is now being charged with civil fraud by New York Attorney General Andrew Cuomo, are quick to point out that Lewis may have been pressured not to reveal massive losses to shareholders by regulators -- namely Ben Bernanke and Hank Paulson.

Former U.S. Treasury Hank Paulson was not subtle in his opening remarks Wednesday to a U.S. House committee investigating both the U.S. Treasury's decision to bail-out American International Group, Inc. (AIG) via 100% payments to its counterparties, and the U.S. Federal Reserve's quantitative easing policy.

Paulson, said had federal policy makers not acted to save AIG, a failure of the financial system could have ensued, and pushed the U.S. unemployment rate to a Great Depression-esque 25%, marketwatch.com reported Wednesday.

Today's jobless claims data came in strong enough that we would have expected further recovery, but the fears over all this CIT fallout weighed on investors' minds. Hank Paulson took his grilling. Homebuilders even started sounding less negative again. But then came reports that perma-bear Nouriel Roubini was finally throwing in the towel and showing that the recession would end. His report was what helped traders have comfort in buying stocks at the end of the day.

Here are the unofficial closing bell levels:

Dow 8,709.02 +92.81 (1.08%)
S&P 500 940.54 +7.86 (0.84%)
Nasdaq 1,884.66 +21.76 (1.17%)

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People revealed earlier this week that Treasury Secretary Tim Geithner made its closely-watched list of the 50 Most Beautiful People.

Beautiful? Really? 50 Most Beautiful Treasury Secretaries perhaps -- but only because Hank Paulson looks like a rodent and Robert Rubin looks like the dad in that Twister Sister music video. Business Insider found time to do some digging and uncover the makings of a scandal. Joe Weisenthal reports:

An outspoken group of Bank of America (NYSE: BAC) shareholders has been calling for CEO Kenneth Lewis's head lately, with investors none too pleased by the bank's near-disastrous acquisition of Merrill Lynch. However, testimony is hitting Wall Street today that indicates Lewis was simply following government orders by keeping hefty losses at Merrill under wraps.

Lewis testified under oath before New York Attorney General Andrew Cuomo in February, asserting "it wasn't up to me" to disclose Merrill's fourth-quarter losses toward the end of 2008.

According to Lewis, Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson pressured him to stay mum about Merrill Lynch's troublesome balance sheet. The regulators reportedly urged Lewis to proceed with the merger, warning that the deal's failure would "impose a big risk" to the nation's financial system.

Last fall, former Treasury Secretary Hank Paulson decided it would be good to buy the toxic waste off of bank balance sheets, so he persuaded the President and Congress to spend $700 billion to create the Troubled Asset Relief Program (TARP).

Once he got the money, he changed his mind and decided that buying toxic waste made no sense -- so he used it to buy big chunks of senior preferred stock in U.S. financial institutions (FIs). Why? I don't know, but it certainly was not to get lending going again.

This week, Texans watched a meteorite burn up in the atmosphere leaving a few glowing pebbles in the scrub for astronomers to recover. It turns out that when 3,000 people accepted positions in the Bush administration, they thought they were hitching their career wagons to a star. Now, it looks more like their careers were attached to that flaming out meteorite instead. How so?

With the national unemployment rate at 7.6%, the unemployment rate among those Bush appointees is 75%. Or put another way, only about 25% of those 3,000 folks have found jobs. It turns out that this unemployment rate is much higher than for former Presidents Ronald Reagan, George H.W. Bush and Bill Clinton staffers -- about half of which had jobs within a month of leaving their government posts.

Mr. President, congratulations on passing your $787 billion stimulus bill. We hope it helps to lessen the pain of the declining economy. But the stock market has been tanking and record numbers of people are joining the ranks of the unemployed. Going to Canada for your first Presidential trip is the opposite of W's first trip to Mexico. And your talk about gloomy economic prospects stands in sharp contrast with W's out-of-touch proclamations of solid economic fundamentals. But doing the opposite of W is not going to cut it.

Are you wondering why there's bailout backlash? I think it may be because we need you to put your communications skills to work by giving us a recovery roadmap. In concept, this is a simple idea -- just tell us:

In looking back over 2008, there is one piece of good news -- but it's a silver lining on a black cloud. What am I talking about? In 2008, the U.S. had the lowest inflation rate since 1954 -- 0.1%. Back in 1954, prices actually fell 0.7%. The 2008 inflation report is good news in one sense, and ominous in another.

The good news is that the price of gasoline fell so much. In December gasoline lost 17.2%, the largest monthly decline in records that go back 71 years. Overall energy prices also dropped by a record 8.3% as home heating oil and natural gas showed declines.

If only it weren't for the reason that prices were falling, this news would put a smile on my face. And the reason for the fall is that the economy can only grow if consumer spending grows. And that's not growing because consumers are making less money and they can no longer borrow to make up the difference. This means that demand is dropping for just about everything -- including gasoline.

The Wall Street Journal reports (subscription required) that Treasury Secretary Hank Paulson is "getting a better return than most fund managers."

According to New Hampshire Republican Sen. Judd Gregg "The TARP, for all its warts, has involved using tax dollars to invest in assets that will have a return to the taxpayer. In fact, the estimate to date is that the TARP has actually had a gain of about $8 billion, while recapitalizing the financial system. With this type of stimulus, there will be little, if any, long-term increase in the debt."

Wait, wait, wait: The estimate to date on the change in value of highly illiquid, difficult to understand "troubled assets" is that they're up 8%? How could anyone possibly know that they're "up in value"? Wasn't the whole point of the TARP that they were illiquid and too hard to understand and were thus such a burden to the banks that bought them that there was just no alternative but to make taxpayers buy them?

I have no idea what will come of the TARP program. I'm skeptical of its prospects because I don't why, if these assets are such a good deal, no one from the private sector was willing to step up and make a bid. But to say that Paulson is "up 8%" on hard to value assets that we bought a few months ago seems ludicrous.

A spokesman for JPMorgan Chase (NYSE: JPM) Thomas Kelly said his firm has not disclosed what it did with the $25 billion in emergency bailout money it has received. In fact, JPMorgan Chase is declining to provide any such disclosure.

AP has reported that none of the 21 banks that received $1 billion or more from taxpayers is tracking, or at least willing to disclose how they are using the money. Let me be clear -- THIS STINKS TO THE HIGH HEAVENS!

What kind of deals did Treasury Secretary Paulson make with these favored financial institutions? The money would be very easy to track. Why wouldn't that be a part of the bargain?

Paulson obviously did not read Conservative bankers? Surely you jest!, but he should have. Of course, having former Goldman Sachs (NYSE: GS) CEO Paulson negotiate with his Wall Street buddies on behalf of the taxpayer is highly suspect. At a minimum we have the good 'ol boy network operating in full form.

The banks simply are avoiding what should be required scrutiny by pleading ignorance. I don't believe the money can't be tracked, or even traced now after the fact. What happened to the idea of more transparency? More cover up I fear!

The banks should be subject to full disclosure. The use of the funds should be subject to review. Government money should be subject to the Freedom of Information Act. Why all the secrecy?

PS: Personal emails I have been receiving and the initial comments indicate strong sentiment about this issue. I encourage those that care to forward this story to their elected officials and friends encouraging full disclosure -- as promised! Obama used the internet to help win the White House, lets use it to get someone to listen with an internet blast from all over the country!

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money.

Flying shoe-dodger, President George W. Bush, has a track record of rewarding the guilty. After the faked intelligence that gave him the ammunition he needed to invade Iraq in 2004, Bush awarded a Presidential Medal of Freedom to CIA Director George "Slam Dunk" Tenet. And to reward the banks that got us into the current financial catastrophe, Bush rammed through Congress a bill that uses $700 billion of our tax dollars to pay bonuses to the executives who run those banks.

How did he do that? As usual, he did it secretively. The law that created the bailout bill includes provisions that limit executive compensation for banks that get bailout money. Specifically, the bill requires that banks report to the IRS any compensation above $500,000 paid to their top five executives. If that reporting does not occur, the IRS can impose tax penalties. Not only that, but there is no limit to what people below the top five can get paid -- so there never was any way to keep taxpayer money from paying millions to the traders and investment bankers who often get more than the CEO.

Yesterday I wrote: The truth is that General Motors (NYSE: GM), Ford (NYSE: F) and privately held Chrysler are led by bloated egos, with cars being built by bloated unions that are now begging to be saved by a bloated government. See: Auto industry bailout: A bloated government to lead a bloated industry

Among the comments that I received yesterday Duane wrote, "Hey I got an Idea, let the oil companies bail out the auto makers...they are in bed together anyway!"

Before I could respond to Duane that his idea was not entirely mischievous and that some variation of this might have merit, someone else beat me to it, as Jerry followed with, "Right on! Bloated egos, bloated unions, poor quality, shoddy workmanship, inferior products, lack of vision, arrogance extraordinaire. BANKRUPTCY will offer a cure. bailout will foster bad behaviors. I like the idea of letting the oil companies bail out the gas guzzling car industry."

This got me thinking about the fact that the government is not likely to be any better at guiding the car companies then they have been themselves for all of the same reasons. So what else can we do? The answer is that Treasury Secretary Hank Paulson should force the auto companies into bankruptcy instead of saving them and then sell them to Exxon Mobil (NYSE: XOM), Conoco Phillips (NYSE: COP), and Chevron Corp (NYSE: CVX).

Harvard's business school (HBS) has been celebrating its 100th anniversary this year. And it looks to be at the peak of its power. That's unfortunate because five of its most powerful graduates have made significant contributions to absolutely wrecking the global economy. HBS admits people who are natural leaders. Unfortunately, many of the most powerful of these leaders have followed the path of destruction.

Here are five Harvard MBAs who wrecked the economy:

• George W. Bush ('75). The best thing I can say about Bush is that he said he was sorry for all the problems that occurred while he was in the White House. Unfortunately, he seems to believe he was a victim of events outside his control. One of his HBS professors said of Bush "He showed pathological lying habits and was in denial when challenged on his prejudices and biases. He would even deny saying something he just said 30 seconds ago."
• Hank Paulson ('70). As Treasury Secretary Paulson has consistently ignored the severity of the financial crisis -- In June 2006 he gave a speech at HBS in which he said, "this is by far the best global economy that I have seen in my career" -- but this September he was able to sell Congress on an ineffective plan to fix what he finally realized was an imploding economy -- a plan has kept changing. The economy has continued to crash despite his bone-headed efforts to save it.

There is no way to know why stocks go up or down every day. That's why I always find it somewhat silly when I see simple explanations for the movement in prices. The explanation offered for today's 494 point rise is that investors are celebrating the rumor that Timothy Geithner will be the next Treasury Secretary. How does the media know that investors are only celebrating Geithner's appointment and not that of Bill Richardson as Commerce Secretary?

Make no mistake. I agree with the choice of Geithner and made a case for him over former Harvard president, Lawrence Summers, and former Fed Chair Paul Volcker. My reasoning for Geithner was that he had excellent interpersonal skills and high energy coupled with an intimate familiarity with the current financial crisis. Unlike Summers, Geithner is highly unlikely to alienate people, and having picked Hillary Clinton as Secretary of State, President-elect Obama will have enough drama on his hands with both Clintons.

Geithner shares something with current Treasury Secretary Hank Paulson -- he graduated from Dartmouth. I hope that he makes far better use of that Ivy League education in the Treasury Secretary's role than his predecessor. While Geithner will be left with a huge mess that was not helped by his fellow Dartmouth alum, it will be difficult for him to do a worse job than Paulson. The world will be depending on him.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.