Wall Street bailout

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Judge Balks at BofA Bonus Settlement

$33M deal with SEC raises questions of fairness; hearing set

(Newser) - Bank of America won't be able to quietly settle the flap over bonuses for Merrill Lynch execs with a simple $33 million payout to the SEC, a federal judge ruled yesterday. Judge Jed Rakoff refused to sign off on the settlement, saying that doing so would leave the public in...

US Frontier Mythology Is Alive and Dangerous

(Newser) - Sarah Palin took to the national stage in August 2008, and two weeks later Lehman Brothers collapsed. That's a helpful metaphor, writes Naomi Klein in the Guardian, who sees the former Alaska governor as "the last clear expression of capitalism-as-usual before everything went south." The financial crisis should...

TARP-Funded Banks Kept Awarding Bonuses

Firms paid more than they made: Cuomo

(Newser) - The financial crisis and government bailouts did little to change Wall Street’s executive compensation habits, New York's attorney general says. All nine banks given assistance by TARP paid out bonuses in 2008—well before any paid back government loans, according to a survey ordered by Andrew Cuomo. Goldman Sachs,...

TARP Watchdog: Bailouts May Cost US $24T

Number based on 'hypothetical maximum,' Treasury counters

(Newser) - The special inspector overseeing Treasury’s TARP program says federal assistance to banks and other financial entities could end up costing taxpayers $23.7 trillion, Bloomberg reports. Aside from the $700 billion bailout, Neil Barofsky says in testimony prepared for told Congress tomorrow, other trillion-dollar federal programs could balloon. “...

Banks Misused Bailout Funds

(Newser) - Instead of using federal bailout money to increase lending as the money was intended, many banks used TARP funds to make investments, repay loans, and even buy other banks, reports the Washington Post, citing a government audit report. Of 360 banks surveyed, 110 invested at least some of their bailout...

Paulson: BofA-Merrill Deal Saved US From 'Great Peril'

Actions saved nation from 'great peril,' he says

(Newser) - Former Treasury Secretary Henry Paulson says his role in Bank of America’s acquisition of Merrill Lynch was appropriate and necessary, MarketWatch reports. “I am confident that our responses were substantially correct and that they saved this nation from great peril,” Paulson told a House oversight committee today...

Goldman Inspires Jealousy, Suspicion With Soaring Profits

(Newser) - Goldman Sachs is expected to announce stunning profits for the second quarter tomorrow, inspiring jealousy on Wall Street and suspicion on Main Street, as taxpayers wonder whether they've been taken for a ride, reports the New York Times. The bank repaid its multibillion dollar government loan last month, and could...

AIG Seeks US Approval for More Bonuses

(Newser) - Two of the least favorite words in the Wall Street lexicon are back in the news: AIG bonuses. The company is requesting the government's permission to dole out millions more to dozens of top executives, the Washington Post reports. Technically, AIG doesn't need the federal approval, but it's still gunshy...

GE Reaps Billions From Bailout Loophole
 GE Reaps 
 Billions From 
 Bailout Loophole 
INVESTIGATION

GE Reaps Billions From Bailout Loophole

Loophole lets company pull down $74B from FDIC

(Newser) - The biggest beneficiary of the federal government's debt guarantee program, one of Washington's key bank rescue efforts, isn't a bank or a financial services company—it's General Electric, which exploited a loophole it had lobbied aggressively to insert, and reaped billions in bailout money. A joint investigation by ProPublica and...

In Lieu of Bonuses, Citi Gives I-Bankers 50% Raises

(Newser) - Citigroup will raise salaries for investment bankers and traders as much as 50% to offset a steep falloff in bonus pay and keep the company’s compensation package competitive, Bloomberg reports. Other employees, like those in the consumer banking section, will receive smaller raises. Citi, which took $45 billion in...

Michael Moore Wants to 'Save Our CEOs'

Teaser trailer is actually stunt for new movie

(Newser) - Let the viral marketing begin. Michael Moore pulled a fast one on New York moviegoers Friday night when, instead of a conventional trailer for his new film, he appeared onscreen Will Rogers-style asking for donations to “save our CEOs,” the New York Daily News reports. Audience reactions were...

Feds Put 'Gun to Head' of BofA's Lewis on Merger

(Newser) - Ben Bernanke and Henry Paulson may have leaned on Bank of America CEO Ken Lewis too heavily last year when he tried to back out of a deal to acquire Merrill Lynch, say congressional investigators. In fact, a GOP briefing document says the two Bush officals "put a gun...

White House Shifts Course on Wall St. Pay

Salary caps will be dropped, but bonus restrictions remain

(Newser) - The Obama administration has scrapped plans for salary caps at banks and other firms that receive government bailout money, reports the Wall Street Journal. But congressional limits on bonuses will remain in force, and the White House will still push for major changes to executive compensation. The double whammy of...

Citigroup Halts Payouts to Former Execs

Promised severance packages curtailed to avoid public anger

(Newser) - Citigroup has told several of its top former executives that it will not pay out millions in promised severance pay, reports the Wall Street Journal. The bank has already forked out more than half of the $100 million it had pledged to five or so senior employees, but it is...

AIG's 2008 Bonus Pool Rises to $454M

Company gives congressman the biggest figure yet

(Newser) - Lawmakers and journalists keep pressing AIG about how much it paid out in bonuses in 2008, and the number keeps getting bigger, reports Politico. In response to a query from Rep. Elijah Cummings, the company now says it paid $454 million, about 4 times the figure it told Politico in...

Anti-New Deal Book Is GOP's New Bible

Republicans flock to The Forgotten Man in fight over stimulus

(Newser) - For the Republican Party, looking for any kind of traction for its opposition to President Obama’s stimulus spending, anti-New Deal book The Forgotten Man is a godsend, Politico reports. Author Amity Shlaes suggests, in what some call revisionist history, that FDR’s plan, pushed by government bureaucrats on a...

Geithner Puts Brakes on Bank Repayments

Treasury sec reluctant to free Goldman, others from constraints

(Newser) - Tim Geithner is warning Wall Street that he will consider more than banks' individual financial fitness when deciding whether they can pay back bailout funds—and escape from the strings attached to them. In an interview with the Wall Street Journal, the Treasury secretary says that the whole banking system,...

20 Crime Probes Launched Into Bailout Fraud

Inspector calls TARP 'inherently vulnerable' to insider trading, abuse

(Newser) - Federal authorities have begun 20 separate investigations into possible fraud, tax violations, insider trading, and other criminal activities surrounding Henry Paulson's $750 billion Troubled Asset Relief Program, reports the Los Angeles Times. It's only the first round of probes, according to the bailout program's inspector general, who called TARP "...

Livid Wall Streeters See Themselves as Victims

(Newser) - Main Street doesn’t hold a monopoly on victimhood, Gabriel Sherman writes in New York. From AIG execs and their disappearing bonuses to Wall Street bankers who get dirty looks, the once-privileged feel like they’re shouldering too much blame. “It is difficult to sympathize with these people,”...

Bailed-Out Banks Don't Want to Bail Out Chrysler

Lawmakers say rescued banks should cooperate in auto rescue plan

(Newser) - Auto task force Steven Rattner's request that four big banks write off their $7 billion debt to Chrysler in return for nothing met with a big no from dropped jaws, reports the Washington Post. JPMorgan Chase, Morgan Stanley, Citigroup, and Goldman Sachs are seeking a better deal, but critics argue...

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