A Billion Here...

Spitzer: Banks Are Too Big, Let Them Fail

Slate  |  12 hours, 46 minutes ago

(Newser) - The government has doled out trillions in rescue funds, but “so far, we are simply rebuilding the same edifice that just collapsed,” writes newly-minted Slate columnist Eliot Spitzer. For years we’ve concentrated capital, creating gigantic “financial supermarkets” that attempted to provide every service for their customers. “That model has failed,” Spitzer concludes, and left us prey to the onerous “too big to fail” argument. More »

Treasury May Lower Mortgage Rates to 4.5%

Wall Street Journal  |  Dec 3, 08 4:36 PM CST

(Newser) - The Treasury may try to bring new mortgage rates down to 4.5%—a full percentage point lower than current rates—to revitalize the housing market, the Wall Street Journal reports. Under the proposal, which is still in the early stages, the department would use Fannie Mae and Freddie Mac to lower the rates. The idea comes after months of struggling to hatch a plan to reduce foreclosures and stem falling prices without directly bailing out borrowers and lenders. More »

UAW Bends to Boost Bailout

Detroit News  |  Dec 3, 08 2:09 PM CST

(Newser) - The United Auto Workers agreed today to concessions that may help Detroit get $34 billion in federal assistance, the Detroit News reports. The union’s job bank—which pays eliminated employees 95% of their base salaries—will be suspended, and the UAW will delay billions in payments to its health care trust fund. Though union president Ron Gettelfinger skated inquiries about wage cuts, he said contract modifications were possible. More »

In DC Corral, the Big 3 Dare Congress to Shoot

Washington Post  |  Dec 3, 08 8:50 AM CST

(Newser) - The Big Three, their creditors, the unions, and Congress are locked in “a standoff worthy of a spaghetti western,” writes Steven Pearlstein in the Washington Post. “But none really wants to pull the trigger.” In the end, there’s little doubt Congress will step in, but lawmakers know they must get concessions from all parties first. Do the Big Three’s latest proposals fit the bill? Here’s how they break down: More »

Morgan Stanley Eyes Smaller Fish to Boost Banking Cred

Wall Street Journal  |  Dec 1, 08 10:27 AM CST

(Newser) - Just months after converting from an investment firm into a bank-holding company, Morgan Stanley is already one of the top 50 US banks in terms of deposits, the Wall Street Journal reports—and is looking to acquire regional banks that will speed its climb. Analysts say it’s unlikely Morgan Stanley will move to turn its current brokerage offices into bank branches. More »

Put the Brakes on Car Chiefs' Pay: UAW Boss

Reuters  |  Dec 1, 08 4:11 AM CST

(Newser) - The nation's Big Three automakers should pledge to limit executive pay—including bonuses and severance packages—in exchange for federal money, insists the president of the United Auto Workers. Ron Gettelfinger warned that everyone is going to have to tighten his belt, including the rank-and-file, in order to save jobs. He called federal aid a "bridge loan that will get us through until we can take a longer term look at what needs to be done." More »

Ford Doesn't Want to Cut CEO's Pay

Wall Street Journal  |  Nov 27, 08 4:09 PM CST

(Newser) - Though it’s under pressure to trim costs and update its business plan in order to get federal bailout funds, Ford doesn’t like the idea of cutting its CEO’s salary, the Wall Street Journal reports. Alan Mulally made a $2 million salary and $21 million in total compensation last year; asked in testimony last week on Capitol Hill if he’d accept a $1 salary, he replied, “I think I’m OK where I am.” More »

Wall Street's Doom Years in the Making

Portfolio  |  Nov 27, 08 4:00 PM CST

(Newser) - When he wrote Liar’s Poker in 1989, Michael Lewis figured the end of Wall Street was near. After all, it had hired him, a 24-year-old with neither experience nor interest in finance. “Sooner rather than later,” he writes in Portfolio , “someone was going to identify me, along with a lot of people more or less like me, as a fraud.” Now, decades later, Wall Street’s stupidity has finally brought it low. More »

Automakers Will Get Another House Hearing

Wall Street Journal  |  Nov 26, 08 5:25 PM CST

(Newser) - A House committee will hear struggling automakers out on their new ideas for federal aid Dec. 5, the Wall Street Journal reports today, with Detroit’s plan due to Congress’ Democratic leaders by Tuesday. Dems say approval of billions in federal funds hinges on making Ford, General Motors, and Chrysler “viable,” and a spokesman says the companies are “working tirelessly.” More »

Bailed-Out Banks Won't Bail on Sports Sponsorships

ABC News  |  Nov 25, 08 11:06 AM CST

(Newser) - Citibank is getting billions from taxpayers and cutting thousands of jobs, but it's not canning its 20-year, $400 million deal to dub the New York Mets’ new stadium “Citi Field.” Such big advertising deals are coming under the microscope—and have critics crying foul, ABC News reports. “This type of spending is indefensible to Citigroup’s new partner and largest investor: the American taxpayer," fumed one lawmaker. More »

Big Three Worse Than Somali Pirates

Bloomberg  |  Nov 20, 08 1:37 PM CST

(Newser) - Detroit’s pleas for a bailout sound an awful lot like blackmail to Bloomberg’s Mark Gilbert. Let GM fail, CEO Rick Wagoner told Congress, and the “level of economic devastation would far exceed” what Detroit is asking for. In other words, give us what we want, or the economy gets it. “Even Somali oil-tanker pirates have so far stopped short of trying to pilfer $25 billion from their victims,” Gilbert writes. More »

CEOs Took Billions Off the Table Before Bust

Wall Street Journal  |  Nov 20, 08 8:55 AM CST

(Newser) - Investors have lost some $9 trillion since last year’s stock market peak, but at the center of the maelstrom, CEOs of some of the worst-performing companies are sitting pretty. Fifteen financial services and homebuilding CEOs have accumulated more than $100 million each in the past 5 years in cash compensation and stock sales, the Wall Street Journal reports. That includes the heads of Lehman Brothers, Bear Stearns, and other nearly bankrupt or deeply damaged companies. More »

Detroit Needs Green Deal or No Deal

Salon  |  Nov 12, 08 9:01 AM CST

(Newser) - If we’re going to bail out the auto industry, writes Joseph Romm in Salon, let’s do it right. Detroit’s Big Three have spent years fighting tooth and nail against the very innovations that could save them: higher fuel efficiency and hybrid-electric cars. Detroit has “been suicidally lobbying against its own inescapable future,” as well as against everyone’s shared interest in cars running on clean and renewable energy. More »

Robin Hood, Beware: The Rich Get Poorer

Wall Street Journal  |  Oct 27, 08 1:28 PM CDT

(Newser) - Barack Obama and John McCain have sparred over the country’s income gap, but that gap is shrinking rapidly, Robert Frank writes in the Wall Street Journal . Financial crises always knock the rich down a peg, and this one is no different. One economist predicts the top 1%’s share of all income will fall to 18-19% during the next year, down from 23-24% last year. More »

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