BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Paulson: Not Saving AIG Would Have Pushed U.S. Unemployment to 25%]]>http://www.bloggingstocks.com/2010/01/27/paulson-not-saving-aig-would-have-pushed-u-s-unemployment-to-2/http://www.bloggingstocks.com/2010/01/27/paulson-not-saving-aig-would-have-pushed-u-s-unemployment-to-2/http://www.bloggingstocks.com/2010/01/27/paulson-not-saving-aig-would-have-pushed-u-s-unemployment-to-2/#commentsFiled under: , ,

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.

Continue reading Paulson: Not Saving AIG Would Have Pushed U.S. Unemployment to 25%

Paulson: Not Saving AIG Would Have Pushed U.S. Unemployment to 25% originally appeared on BloggingStocks on Wed, 27 Jan 2010 17:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailouthank paulsonHankPaulsonrecessionus treasuryUsTreasuryWed, 27 Jan 2010 17:00:00 EST<![CDATA[Obama Administration Weighing New Fee on Banks to Pay for Bailout]]>http://www.bloggingstocks.com/2010/01/11/obama-administration-weighing-new-fee-on-banks-to-pay-for-bailou/http://www.bloggingstocks.com/2010/01/11/obama-administration-weighing-new-fee-on-banks-to-pay-for-bailou/http://www.bloggingstocks.com/2010/01/11/obama-administration-weighing-new-fee-on-banks-to-pay-for-bailou/#commentsFiled under: ,

The Obama administration is said-to-be considering a new fee on banks, as part of an effort to re-coup the cost of the federal bank bailout, The Wall Street Journal reported Monday (subscription required).

The proposal is still under discussion and is expected to be included in President Barack Obama's proposed fiscal 2011 budget, to be announced in February, The Journal reported. One bank fee option involves a fee on a bank's liabilities, as it, in theory, represents the level of risk a bank assumes; an alternate fee option would be based on a bank's earnings.

Continue reading Obama Administration Weighing New Fee on Banks to Pay for Bailout

Obama Administration Weighing New Fee on Banks to Pay for Bailout originally appeared on BloggingStocks on Mon, 11 Jan 2010 17:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutfeaturedObama administrationMon, 11 Jan 2010 17:00:00 EST<![CDATA[Americans Still Support Pay-for-Performance]]>http://www.bloggingstocks.com/2010/01/07/americans-still-support-pay-for-performance/http://www.bloggingstocks.com/2010/01/07/americans-still-support-pay-for-performance/http://www.bloggingstocks.com/2010/01/07/americans-still-support-pay-for-performance/#commentsFiled under:

The lack of public outcry or protest regarding bank bail-out recipient Citigroup Inc.'s (C) decision to allocate million-dollar pay packages to top executives, albeit in stock, not cash, should not surprise investors.

That's because, historically, the American people have never supported restricting individual bonuses or large compensation plans. The political science and public policy literature is voluminous on this subject -- I've worked with the data for more than 10 years -- and the stance over the years of the American people has been clear: high compensation -- base salary or bonus -- is OK.

Continue reading Americans Still Support Pay-for-Performance

Americans Still Support Pay-for-Performance originally appeared on BloggingStocks on Thu, 07 Jan 2010 17:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutBankBailoutbonusescitigroupfeaturedinthenewsThu, 07 Jan 2010 17:30:00 EST<![CDATA[U.S. Taxpayers Helping Goldman Sachs Move in to Gleaming Tower, Too]]>http://www.bloggingstocks.com/2009/12/21/u-s-taxpayers-helping-goldman-move-in-to-gleaming-tower-too/http://www.bloggingstocks.com/2009/12/21/u-s-taxpayers-helping-goldman-move-in-to-gleaming-tower-too/http://www.bloggingstocks.com/2009/12/21/u-s-taxpayers-helping-goldman-move-in-to-gleaming-tower-too/#commentsFiled under:

This is one of those actions that, in retrospect -- a retrospect no one could have anticipated, by the way -- looks like a problematic decision.

Goldman Sachs (GS) is set to move into a gleaming, new office tower in Lower Manhattan, adjacent to the World Trade Center/Freedom Tower site.

The $2.3 billion steel-and-glass skyscraper was given a Liberty Bond tax break that allowed it to sell tax-free bonds to support the tower's construction. Liberty Bonds were created following the September 11, 2001 terrorist attack, as a way to help keep large-employer and finance-related companies in Lower Manhattan, Bloomberg News reported Monday.

Continue reading U.S. Taxpayers Helping Goldman Sachs Move in to Gleaming Tower, Too

U.S. Taxpayers Helping Goldman Sachs Move in to Gleaming Tower, Too originally appeared on BloggingStocks on Mon, 21 Dec 2009 18:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutLiberty BondLibertyBondmanhattanworld trade centerWorldTradeCenterMon, 21 Dec 2009 18:00:00 EST<![CDATA[Who profited from Bear Stearns' collapse? One insider did, and got away with it]]>http://www.bloggingstocks.com/2009/10/20/who-profited-from-bear-stearns-collapse-one-insider-did-and-g/http://www.bloggingstocks.com/2009/10/20/who-profited-from-bear-stearns-collapse-one-insider-did-and-g/http://www.bloggingstocks.com/2009/10/20/who-profited-from-bear-stearns-collapse-one-insider-did-and-g/#commentsFiled under: , ,

So, I was flipping through some articles in Rolling Stone, when I found a very interesting economic story - yes, in Rolling Stone. The article, "Wall Street's Naked Swindle," takes a look at what happened in the options pits leading up to the death of Bear Stearns and Lehman Brothers. According to the article, an unknown option buyer made "one of the craziest bets Wall Street has ever seen," by shorting Bear Stearns. The unknown trader felt that Bear Stearns would lose "more than half" of its value in nine days or less, a bet that one financial analyst likened to buying 1.7 million lottery tickets.

What is crazy is that this bet paid off, leading to only one conclusion: insider trading (cue dramatic music). When Bear Stearns dropped from roughly $63 to $2 per share on March 17th (just six days later), the person purchasing the options made roughly $270 million. Senator Chris Dodd from the Senate Banking Committee thought that something wasn't on the up and up with this trade, and the Securities and Exchange Commission (SEC) promised it would look into the trade. Of course, nothing has happened since.

Continue reading Who profited from Bear Stearns' collapse? One insider did, and got away with it

Who profited from Bear Stearns' collapse? One insider did, and got away with it originally appeared on BloggingStocks on Tue, 20 Oct 2009 14:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutbank failureBankBailoutBankFailureBear StearnsBearStearnsBen BernankeBenBernankeinsider tradingInsiderTradinginthenewsMartha StewartMarthaStewartSECtheftTimothy GeithnerTimothyGeithnerTue, 20 Oct 2009 14:00:00 EST<![CDATA[Citigroup may turn to private investors]]>http://www.bloggingstocks.com/2009/05/04/citigroup-may-turn-to-private-investors/http://www.bloggingstocks.com/2009/05/04/citigroup-may-turn-to-private-investors/http://www.bloggingstocks.com/2009/05/04/citigroup-may-turn-to-private-investors/#commentsFiled under:

Days ahead of the release of the bank stress test results, reports have surfaced that Citigroup (NYSE: C) may attempt to raise capital from private investors rather than take more U.S. bailout funds. Such a move could strengthen the firm's equity without giving the government more control.

Although the results of the test haven't been released, it is widely known that Citigroup is considered one of the banks that will need to raise cash to continue (some reports state more than $10 billion).

Continue reading Citigroup may turn to private investors

Citigroup may turn to private investors originally appeared on BloggingStocks on Mon, 04 May 2009 08:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutBankBailoutcapital infusionCapitalInfusiongovernment bailoutGovernmentBailoutinthenewsraising capitalRaisingCapitalstress testsStressTestsMon, 04 May 2009 08:30:00 EST<![CDATA[More questionable payments from AIG]]>http://www.bloggingstocks.com/2009/03/16/more-questionable-payments-from-aig/http://www.bloggingstocks.com/2009/03/16/more-questionable-payments-from-aig/http://www.bloggingstocks.com/2009/03/16/more-questionable-payments-from-aig/#commentsFiled under:

American International Group (NYSE: AIG) just can't get out of its own way. Seriously, if you want a blueprint of how not to spend "free" money from taxpayers, just read the media's coverage of the bank.

According to MarketWatch, the company is going to pay $450 million to employees of the unit that was basically responsible for the bank's collapse, you read that right.

It definitely seems that this decision is not resonating well across the nation's capital, as Larry Summers (economic advisor to the President) said that the payments are "outrageous." Democratic senator Barney Frank told Fox News that the government needs to look into whether or not these bonuses are "legally recoverable." Yet another Democrat, Elijah Cummings, wants AIG CEO Edward Liddy to resign.

Continue reading More questionable payments from AIG

More questionable payments from AIG originally appeared on BloggingStocks on Mon, 16 Mar 2009 07:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>aigbank bailoutBankBailoutfeaturedgovernment bailoutGovernmentBailoutinthenewspoor managementPoorManagementMon, 16 Mar 2009 07:00:00 EST<![CDATA[Will the U.S. economy need a second fiscal stimulus package? ]]>http://www.bloggingstocks.com/2009/02/26/will-the-u-s-economy-need-a-second-fiscal-stimulus-package/http://www.bloggingstocks.com/2009/02/26/will-the-u-s-economy-need-a-second-fiscal-stimulus-package/http://www.bloggingstocks.com/2009/02/26/will-the-u-s-economy-need-a-second-fiscal-stimulus-package/#commentsFiled under: , ,

In the landmark, blockbuster film "Jaws" (1975), reluctant sailor, Police Chief Martin Brody (Roy Scheider), while chumming bait, gets his first look at the great white shark that's been terrorizing Amity's shoreline community. Captain Quint (Robert Shaw) and Marine Biologist Matt Hooper (Richard Dreyfuss) are immediately struck by the shark's size.

But Chief Brody is struck by another reality. "You're gonna need a bigger boat," Brody said.

In today's environment, with the U.S. economy in a pronounced recession and credit markets still constrained, the Keyensians - - which include most Congressional Democrats - - are playing the role of Chief Brody. They know what's needed to go after that shark (the recession).

'You're gonna need a bigger stimulus.' (In this case the 'bigger stimulus' means a second stimulus package.)

Continue reading Will the U.S. economy need a second fiscal stimulus package?

Will the U.S. economy need a second fiscal stimulus package? originally appeared on BloggingStocks on Thu, 26 Feb 2009 14:55:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutCongressDemocratsfeaturedfiscal stimulus packagegdpObamaObama administrationRepublicansU.S. economyThu, 26 Feb 2009 14:55:00 EST<![CDATA[Budget: $750 billion more for bank bailout, higher hedge fund taxes]]>http://www.bloggingstocks.com/2009/02/26/budget-750-billion-more-for-bank-bailout-higher-hedge-fund-ta/http://www.bloggingstocks.com/2009/02/26/budget-750-billion-more-for-bank-bailout-higher-hedge-fund-ta/http://www.bloggingstocks.com/2009/02/26/budget-750-billion-more-for-bank-bailout-higher-hedge-fund-ta/#commentsFiled under:

President Obama has presented a budget that will yield a $1.75 trillion deficit --12% of GDP. But he promises to slice that deficit in half by the end of his current term. The budget has many items in it, but I found two to be particularly interesting -- the decision to more than double the original TARP and the move to repeal a loophole that enables hedge fund and private equity managers to slice their tax bills in half.

The budget could add as much as $750 billion for bank bailouts. The TARP had allocated $700 billion to that bailout task last year. $350 billion of that has been spent and if the latest $750 billion is added to the yet-to-be-spent second half of the TARP, that leaves $1.1 trillion of taxpayer money going out the door. But for what purpose? We know $16 billion went to bonuses and there have been the multi-million parties as well. But as far as getting more lending out to individuals and companies, the zombie banks that got the money have kept their purse strings tight.

Meanwhile, the budget does do something good. It makes private equity and hedge fund managers pay income tax on their income instead of treating that income as if it was a capital gain -- subjecting it to the lower 15% tax rate. I argued this point on CNBC back in July 2007 with the Wall Street Journal's Alan Murray (and he ended up agreeing with me). Unfortunately, closing this loophole would have done much more good when hedge funds and private equity firms were actually making money.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing.

Budget: $750 billion more for bank bailout, higher hedge fund taxes originally appeared on BloggingStocks on Thu, 26 Feb 2009 11:55:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutBankBailoutbudgetTARPThu, 26 Feb 2009 11:55:00 EST<![CDATA[The case against Citigroup's (C) value grows]]>http://www.bloggingstocks.com/2009/02/13/the-case-against-citigroups-c-value-grows/http://www.bloggingstocks.com/2009/02/13/the-case-against-citigroups-c-value-grows/http://www.bloggingstocks.com/2009/02/13/the-case-against-citigroups-c-value-grows/#commentsFiled under:

The arguments about the value of shares in Citigroup (NYSE: C) rage back and forth most trading days. The shares can run up or run down 15% during any given market session.

On days when it looks like American banks will be bailed out with common shareholders remaining intact, Citi runs up. On days when nationalization of the banks seems more likely, it heads toward new lows.

Continue reading The case against Citigroup's (C) value grows

The case against Citigroup's (C) value grows originally appeared on BloggingStocks on Fri, 13 Feb 2009 09:25:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutbank debtBankBailoutBankDebtCFri, 13 Feb 2009 09:25:00 EST<![CDATA[Pricing system for toxic assets deemed key to U.S. Treasury bank rescue plan]]>http://www.bloggingstocks.com/2009/02/11/pricing-system-for-toxic-assets-deemed-key-to-u-s-treasury-bank/http://www.bloggingstocks.com/2009/02/11/pricing-system-for-toxic-assets-deemed-key-to-u-s-treasury-bank/http://www.bloggingstocks.com/2009/02/11/pricing-system-for-toxic-assets-deemed-key-to-u-s-treasury-bank/#commentsFiled under: , ,

Investors should not read too much into the Dow's nearly 400-point drop Tuesday. What they should concentrate on, in the view of a pair of economists, is the mechanism the U.S. Treasury uses to price toxic assets.

The above is the most important 'unknown' in the U.S. Treasury's financial stability plan, so says economist David H. Wang -- how toxic assets that are clogging banks' balancing sheets and restricting credit -- will be priced.

"Will the United States government set-up a clearinghouse? Or will they design some type of open outcry, or managed open outcry? These are the key unknowns," Wang said. "Treasury Secretary Geithner and his staff cannot rush this decision, but on the other hand they cannot take two quarters to developed it. They have to announce the structure of the pricing program within a couple of weeks. I cannot underscore enough the importance of this pricing methodology. It will be the biggest factor in whether the credit system recovers, or something much worse occurs."

Continue reading Pricing system for toxic assets deemed key to U.S. Treasury bank rescue plan

Pricing system for toxic assets deemed key to U.S. Treasury bank rescue plan originally appeared on BloggingStocks on Wed, 11 Feb 2009 12:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutbank rescuebanking sectorcredit marketsfeaturedGeithnermortgage backed securitiesnationalizationtoxic assetsU.S. TreasuryWed, 11 Feb 2009 12:00:00 EST<![CDATA[Mortgage applications drop to eight-year low as buyers wait for government incentives]]>http://www.bloggingstocks.com/2009/02/11/mortgage-applications-drop-to-8-year-low-as-buyers-wait-for-gove/http://www.bloggingstocks.com/2009/02/11/mortgage-applications-drop-to-8-year-low-as-buyers-wait-for-gove/http://www.bloggingstocks.com/2009/02/11/mortgage-applications-drop-to-8-year-low-as-buyers-wait-for-gove/#commentsFiled under: , , ,

Mortgage applications fell almost 25% last week with new loan applications for home purchases hitting an eight-year low, according to the Mortgage Bankers Association. People continue to sit on the sidelines, waiting for prices to drop. Who wants to buy a home today if the price for that home might be lower soon after the deal closes?

Adding to that wait-and-see attitude are some major incentives that could be part of the stimulus package making its way through Congress. The biggest incentive of them all is a Senate provision that would give all home buyers a $15,000 tax credit. Who wouldn't wait to see if that provision survives the House/Senate negotiations?

Continue reading Mortgage applications drop to eight-year low as buyers wait for government incentives

Mortgage applications drop to eight-year low as buyers wait for government incentives originally appeared on BloggingStocks on Wed, 11 Feb 2009 11:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bank bailoutBankBailouthome pricesHomePricesinthenewsmortgagesstimulus packageStimulusPackageWed, 11 Feb 2009 11:30:00 EST<![CDATA[U.S. Treasury creates new 'stress test' for banks]]>http://www.bloggingstocks.com/2009/02/11/us-treasury-creates-a-new-stress-test-for-banks/http://www.bloggingstocks.com/2009/02/11/us-treasury-creates-a-new-stress-test-for-banks/http://www.bloggingstocks.com/2009/02/11/us-treasury-creates-a-new-stress-test-for-banks/#commentsFiled under: , ,

The U.S. stock market drops 381 points and you ask why. News analysts say that investors were not satisfied with the details of the bank bailout plan.

Well, if you dig a little deeper you will find out the real reason for the stock market's sell off. As part of the bailout plan, the Obama administration plans to conduct a "stress test" across the nation's largest banks. This "stress test" is mandatory for about 20 of the country's largest banks. This is exactly what the banks have been avoiding, that is, to come clean about their losses. Now the whole world will be able to see the extent to which these guys were leveraged out and the kinds of outrageous risks they took.

Continue reading U.S. Treasury creates new 'stress test' for banks

U.S. Treasury creates new 'stress test' for banks originally appeared on BloggingStocks on Wed, 11 Feb 2009 07:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bank bailoutBankBailoutfull disclosureFullDisclosurestress test for banksWed, 11 Feb 2009 07:30:00 EST<![CDATA[Don't look for both justice and success in the bank bailout plan]]>http://www.bloggingstocks.com/2009/02/10/dont-look-for-both-justice-and-success-in-the-bank-bailout-plan/http://www.bloggingstocks.com/2009/02/10/dont-look-for-both-justice-and-success-in-the-bank-bailout-plan/http://www.bloggingstocks.com/2009/02/10/dont-look-for-both-justice-and-success-in-the-bank-bailout-plan/#commentsFiled under: , ,

Every once in awhile during a crisis or an event, you run across a quote or an observation that sort of summarizes events on the ground, in a nutshell.

New York Times (NYSE: NYT) business journalist Floyd Norris articulated one such observation during a roundtable discussion with other Times journalists on "The Charlie Rose Show" on PBS Monday night.

Regarding the bank bailout plan, Norris said, "This is a case where justice and success don't come together."

Continue reading Don't look for both justice and success in the bank bailout plan

Don't look for both justice and success in the bank bailout plan originally appeared on BloggingStocks on Tue, 10 Feb 2009 10:40:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutbank rescuebanking sectorCharlie RoseFloyd NorrisGeithnerinthenewsPBSU.S. TreasuryTue, 10 Feb 2009 10:40:00 EST<![CDATA[Martin Wolf: If the U.S. dares to succeed, it will]]>http://www.bloggingstocks.com/2009/02/09/martin-wolf-if-the-u-s-dares-to-succeed-it-will/http://www.bloggingstocks.com/2009/02/09/martin-wolf-if-the-u-s-dares-to-succeed-it-will/http://www.bloggingstocks.com/2009/02/09/martin-wolf-if-the-u-s-dares-to-succeed-it-will/#commentsFiled under: , , ,

Financial Times columnist Martin Wolf reminds investors that, contrary to some views expressed in the United States, depressions are neither good for us, nor unavoidable.

Further, despite the recent year's many reverberations, the United States remains, Wolf argues (and the U.S. Central Intelligence Agency agrees), the world's preeminent economy in the global economic system it has created and promoted. Moreover, U.S. policy errors had much to do with the current crisis, even if aided by policy errors abroad. By extension, the healing and recovery starts in the U.S. -- with America as the leader of determined, globally-coordinated action.

Continue reading Martin Wolf: If the U.S. dares to succeed, it will

Martin Wolf: If the U.S. dares to succeed, it will originally appeared on BloggingStocks on Mon, 09 Feb 2009 17:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutfiscal policygdpMartin WolfObama administrationquantitative easingTARPU.S. economyMon, 09 Feb 2009 17:20:00 EST<![CDATA[Today's technical outlook: Where should you invest now?]]>http://www.bloggingstocks.com/2009/02/09/todays-technical-outlook-where-should-you-invest-now/http://www.bloggingstocks.com/2009/02/09/todays-technical-outlook-where-should-you-invest-now/http://www.bloggingstocks.com/2009/02/09/todays-technical-outlook-where-should-you-invest-now/#commentsFiled under: , ,

After almost four months of trading in a dominant sideways pattern (except for the Nov. 20-21 bear trap), the government now provides some hope of "stimulus" and, just as important, a new bank bailout plan. So, despite the fear readings from the public, more savvy investors with lots of cash appear ready to put some of that money to work.

On Friday, I spent some time comparing the similarities of the 2002-'03 bottom to the current chart patterns of the major indices and the CBOE Volatility Index (VIX), concluding that it looks like the conditions are present to get a meaningful rally underway.

If you agree that the market is poised for a move higher, the question is, "what sectors and stocks should I buy?"

Continue reading Today's technical outlook: Where should you invest now?

Today's technical outlook: Where should you invest now? originally appeared on BloggingStocks on Mon, 09 Feb 2009 09:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutBankBailoutcboe volatility indexcboevolatilityindexdjias and p 500sam collinsSamCollinsSAndP500stimulustim geithnerTimGeithnervixMon, 09 Feb 2009 09:30:00 EST<![CDATA[NYT's Krugman: Here's a better bank rescue, for the taxpayer]]>http://www.bloggingstocks.com/2009/02/03/nyts-krugman-heres-a-better-bank-rescue-for-the-taxpayer/http://www.bloggingstocks.com/2009/02/03/nyts-krugman-heres-a-better-bank-rescue-for-the-taxpayer/http://www.bloggingstocks.com/2009/02/03/nyts-krugman-heres-a-better-bank-rescue-for-the-taxpayer/#commentsFiled under: ,

You have to appreciate the cleverness of this era's financial humor. (Note that I said, appreciate the cleverness, not love, or enjoy. That's because, depending on your perspective, the humor is either on-the-mark, or not that funny. But that is part of the subjective nature of humor.)

One joke making the rounds:

Question: What's the capital of Iceland?
Answer: $25.

Another: In the old days, banks lent money to people. These days, people lend money to banks.

New York Times (NYSE: NYT) columnist and Nobel Prize-winning economist Paul Krugman discusses bank capital and lending in his most recent column, and argues that the apparent likely Obama administration fix for the banking sector -- a combination of U.S. government purchase of toxic assets and guarantees against losses on other assets, each on terms favorable to the banks -- represents a lousy deal for the U.S. taxpayer, who'll end up "footing the bill for rescuing the banks."

Continue reading NYT's Krugman: Here's a better bank rescue, for the taxpayer

NYT's Krugman: Here's a better bank rescue, for the taxpayer originally appeared on BloggingStocks on Tue, 03 Feb 2009 19:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutbank rescuebanking sectorCongressDemocratsfeaturedfiscal policyKeynesianObama AdministrationPaul KrugmanRepublicanstoxic assetsTue, 03 Feb 2009 19:00:00 EST<![CDATA[TARP I, if nothing else, bought time for TARP II]]>http://www.bloggingstocks.com/2009/02/03/tarp-i-if-nothing-else-bought-time-for-tarp-ii/http://www.bloggingstocks.com/2009/02/03/tarp-i-if-nothing-else-bought-time-for-tarp-ii/http://www.bloggingstocks.com/2009/02/03/tarp-i-if-nothing-else-bought-time-for-tarp-ii/#commentsFiled under: ,

It's a Washington, D.C. adage -- one that can help investors understand the public policy process -- and House Financial Services Chairman U.S. Rep. Barney Frank, D-Massachusetts, among others, have said it a dozen times, if not more:

"Congress doesn't get credit for not doing something or for avoiding something," Frank has said.

Case in point: TARP I, the initial $350 billion allocation in Troubled Asset Relief Program funds. The initial allocation has been widely criticized as ill-conceived. Some of the money has apparently enabled certain banks to approve large bonuses, allowed others to complete acquisitions or position themselves for the same, or pay-down debt, while not resulting in what Congress intended the allocation to accomplish -- increase lending to businesses and consumers.

Continue reading TARP I, if nothing else, bought time for TARP II

TARP I, if nothing else, bought time for TARP II originally appeared on BloggingStocks on Tue, 03 Feb 2009 18:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutbank rescuebanking sectorCongressTARPTARP ITARP IIU.S. TreasuryTue, 03 Feb 2009 18:30:00 EST<![CDATA[Despite public outcry, bank bonus reform may have to take a back seat]]>http://www.bloggingstocks.com/2009/02/02/despite-public-outcry-bank-bonus-reform-may-have-to-take-a-back/http://www.bloggingstocks.com/2009/02/02/despite-public-outcry-bank-bonus-reform-may-have-to-take-a-back/http://www.bloggingstocks.com/2009/02/02/despite-public-outcry-bank-bonus-reform-may-have-to-take-a-back/#commentsFiled under: , ,

With public indignation and Congressional outcries building concerning large Wall Street bonuses while the U.S. taxpayer bails out the same industry that contributed to the financial crisis, efforts to limit or eliminate excessive compensation may hinge on whether the Obama administration wants to use political capital to do it.

The public attention-grabbing incidents are certainly there to keep the U.S. Congress focused on the issue: Wall Street allocating its sixth-highest level of bonuses during the investment banking sector's worst year since the Great Depression. Former Merrill Lynch CEO John Thain's decision, since reversed, to use $1.22 million in company money to redecorate his office, is one example. Another is Robert Rubin receiving more than $100 million in compensation from Citigroup (NYSE: C), a bank that's receiving hundreds of billions of dollars in government guarantees and other, direct financial assistance.

Continue reading Despite public outcry, bank bonus reform may have to take a back seat

Despite public outcry, bank bonus reform may have to take a back seat originally appeared on BloggingStocks on Mon, 02 Feb 2009 18:15:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bank bailoutbank rescuebanking sectorbonusesClaire MccaskillCongressexecutive compensationObama administrationMon, 02 Feb 2009 18:15:00 EST<![CDATA[Would you like the government to spend $4 TRILLION to bail out the banks?]]>http://www.bloggingstocks.com/2009/01/30/how-would-you-like-it-if-the-government-spent-4-trillion-dollars/http://www.bloggingstocks.com/2009/01/30/how-would-you-like-it-if-the-government-spent-4-trillion-dollars/http://www.bloggingstocks.com/2009/01/30/how-would-you-like-it-if-the-government-spent-4-trillion-dollars/#commentsFiled under: , ,

How would you like it if the government spent $4 TRILLION to bail out our banks? How would you like it if this $4 trillion amounts to 1/3 of our Gross Domestic Product?

We started with $700 billion. Then now there is talk of setting up a 'bad bank" to buy up toxic assets. Then some people started tossing around $1 to $2 trillion. Now we are up to $4 trillion..Goldman Sachs says that 4 trillion is their estimate. Senator Schumer and a group experts have also come up with the $4 trillion dollar number The IMF has estimated $2 trillion for this year.

At the same time the Obama team wants to take bold action to solve this problem once and for all.

Dear Mr. President: Use the next $350 billion of TARP and set up a "good bank" that is solvent and let the banks take their losses. They created this mess. Don't worry about big banks going bankrupt. You will gain immediate support from the American people. An like Lincoln who said: "My paramount object in this struggle is to save the Union," so too our primary goal is " to save the Union," not the banks.

Would you like the government to spend $4 TRILLION to bail out the banks? originally appeared on BloggingStocks on Fri, 30 Jan 2009 13:45:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>4 trillion4Trillionbank bailoutBankBailoutgood bankGoodBankFri, 30 Jan 2009 13:45:00 EST