Federal Reserve

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Obama Plan: $30B Stimulus, More Regulation

Democrat blasts lax Bush oversight, McCain's laissez-faire approach

(Newser) - Barack Obama called today for stricter financial regulations and laid out a $30 billion stimulus plan, the Wall Street Journal reports, including measures aimed at the foreclosure crisis. The Democratic candidate said President Bush had “a generally scornful attitude toward oversight and enforcement,” and proposed expanding Fed powers...

Feds Must Ward Off Stagnation, Clinton Says

Says buying mortgages might be necessary to avoid prolonged skid

(Newser) - The government should step into the mortgage mess on a broader scale, Hillary Clinton told the Wall Street Journal yesterday, suggesting monetary policy alone can’t ignite a recovery and warning that procrastination could lead to stagnation similar to Japan’s weary economy. Clinton said the Federal Housing Administration should...

2 Probes Launched Into Bear Stearns Deal

Two Senate panels to investigate takeover

(Newser) - The controversial acquisition of Bear Stearns by rival JP Morgan Chase, aided by billions of dollars of government credit, is about to become one of the most scrutinized deals in Wall Street history. Two separate Senate investigations will soon be under way, one by the Banking Committee and another by...

Paulson Wants Closer Tabs on Investment Banks

More transparency needed if they're to borrow from Fed, Treasury chief says

(Newser) - Treasury Secretary Henry Paulson said today that investment banks owe the government more information about their financial condition if they are occasionally allowed to borrow money from the Federal Reserve, the New York Times reports. Paulson seemed to call for tighter regulations before calling the recent bailout of Bear Stearns...

Bear Stearns Staffers Gird for Mass Layoffs After $3B Hit

After losing their shirts, half will also lose jobs

(Newser) - The Icarus-like fall of Bear Stearns stock, trading as high as $170 a share a year ago before plummeting to $2 last week, has cost Bear employees—who once owned nearly a third of the company—more than $3 billion. That's even after JPMorgan raised its bid for the investment...

The Great Depression It's Not
 The Great Depression It's Not 
Analysis
Mar 25, 2008 11:21 AM CDT

The Great Depression It's Not

What if the end isn't near for the global economy?

(Newser) - Certainly, the 8-month-old credit crisis is serious, but the market turmoil is unlikely to kick off the next Great Depression, financial markets editor Mike Dolan writes for Reuters. "You could be forgiven for thinking we will all soon be hoarding food and reverting to a barter economy," he...

Investors Urge Reluctant Fed to Buy Mortgage Debt

Critics say plan would put too much risk on taxpayers

(Newser) - The best way for the Fed to help reverse the sagging economy is for it to buy some of the $6 trillion in outstanding mortgage-backed securities that have Wall Street so nervous, investors say. The move would ease the credit crunch but put taxpayers at risk. It’s an option...

JPMorgan in Talks to Boost Bear Stearns Bid

Attempt to mollify furious Bear stockholders

(Newser) - JPMorgan Chase was in negotiations last night to quintuple its bid for Bear Stearns following a storm of angry protests by Bear shareholders over the initial bargain-basement deal for the investment banking giant, reports the New York Times. Under the new deal, JPMorgan Chase would pay $1 billion—$10 a...

Fed Cut Raises Inflation Fears
 Fed Cut Raises Inflation Fears 
Mar 19, 2008 10:27 AM CDT

Fed Cut Raises Inflation Fears

Borrowers, exporters stand to gain, but critics find move 'self-defeating'

(Newser) - The Federal Reserve's latest rate cut might boost the economy with cheaper credit, but economists worry a freed inflation genie could be behind any magic, the Washington Post reports. Commodity prices rose to record levels in expectation that the rate cut would keep demand high, and the price hikes are...

Angry Shareholders Want More for Bear Stearns

Bargain basement $2 price sets up potential battle, lawsuits

(Newser) - Bear Stearns shareholders are threatening to vote against its sale to JPMorgan, saying the $2 price per share for the nation’s fifth largest investment bank is unrealistic; speculators seem to agree, trading up Bear stock to $5.91 yesterday, a 23% bump. Expect some serious brinkmanship to force a...

Economy in 'Sharp Decline,' Paulson Admits

He won't say recession, but treasury secretary comes close

(Newser) - Hank Paulson came closer than ever to conceding that the economy is in recession in a series of interviews yesterday, Reuters reports. Weary after a weekend in which he helped to broker Bear Stearns' fire sale to JPMorgan, the treasury secretary avoided the R-word but admitted: "There's no doubt...

Stocks Blast Off; Dow Rises 420
 Stocks Blast Off; Dow Rises 420 
MARKETS
Mar 18, 2008 3:47 PM CDT

Stocks Blast Off; Dow Rises 420

Worries lessen that investment banks are doomed

(Newser) - Stocks blasted off today, with the Dow up more than 400 points after the Fed rate cut and a rally by investment bank stocks. "The run on the investment banks would appear to be over,'' a strategist told Bloomberg. The Dow ended up 420.41 at 12,392....

Fed Cuts Key Interest Rate &frac34; Point
 Fed Cuts 
 Key Interest 
 Rate ¾ Point 
updated
Mar 18, 2008 1:37 PM CDT

Fed Cuts Key Interest Rate ¾ Point

But Wall Street had hoped for more

(Newser) - The Federal Reserve today cut the federal funds rate by ¾ of a percentage point, from 3% to 2.25%, disappointing many investors who were hoping for a cut of a full point, reports the Wall Street Journal. The Fed voted 8-2 for the rate cut. "Recent information indicates...

Credit Crunch Slows Spending
 Credit Crunch
 Slows Spending 
Mar 18, 2008 11:10 AM CDT

Credit Crunch Slows Spending

Consumers, businesses tighten belts just as economy needs fuel

(Newser) - Fewer credit card offers, tougher mortgage requirements, and a slowdown in business expansion all are likely because of the worsening credit crisis, reports the Washington Post. Banks are looking to limit exposure to high-risk customers and restore their own bottom lines. And that’s tough medicine for an economy that’...

Fed 'Will Get on Top of This,' Says Bernanke Mentor

Scope 'far exceeds' that of previous crises

(Newser) - Ben Bernanke has the savvy to inject enough liquidity into the US economy to push it through the current credit crisis, says a leading economist who advised the Fed chief's MIT doctoral thesis. “The Fed will get on top of this,” said Stanley Fischer, ahead of this afternoon's...

Bernanke Looks Impotent as Fed's Fixes Fail

Economic woes may be beyond cure by monetary medicine

(Newser) - Ben Bernanke has employed virtually every tool in the Federal Reserve's kit to calm markets panicked by the credit crisis, but hasn't scored any more than temporary rallies, Bloomberg reports in a look at the markets' fading faith in the Fed chief—and the Fed itself. "The Fed has...

Stocks Rebound, Countering Selloff in Financials
Stocks Rebound, Countering Selloff in Financials
Market Update
Mar 17, 2008 10:17 AM CDT

Stocks Rebound, Countering Selloff in Financials

Bear Stearns buyout sends JP Morgan up, Lehman Brothers down

(Newser) - Stocks steadied after steep early morning losses today, with the Dow actually rising 1.06 points by mid-morning, the Wall Street Journal reports. But financials were still down big, as the Bear Stearns fire sale loomed large over the market. Lehman Brothers, down 22%, was hit the worst, other than...

Fed Cuts Bank Discount Rate to Boost Liquidity

Latest step to stem worsening credit crisis and bolster panicky markets

(Newser) - The Federal Reserve raced to buck up an anxious financial sector today by cutting its discount rate to banks by a quarter point, to 3.25%, the AP reports. It also created a new lending facility to aid investment banks with short-term loans. The moves are "designed to bolster...

Bernanke Tosses Out His Rule Book

As Wall Streets meltdown accelerates, the Fed chief adapts on the fly

(Newser) - With a recession and worsening meltdown on Wall Street looming, Fed chief Ben Bernanke has dumped textbook central bank economic policy, reports the New York Times. Last week's bailout of Bear Stearns, for example, seemed to fly in the face of his previous reluctance to rescue big institutions. And it...

Wounded Bear Scrambles for a Savior
Wounded Bear Scrambles
for a Savior
Mar 15, 2008 3:38 PM CDT

Wounded Bear Scrambles for a Savior

Stearns hopes to find a quick buyer in troubled times

(Newser) - What's next for Bear Stearns? A Wall Street institution for the better part of a century, it is now scrambling to find a buyer. Its best hope is JP Morgan, which provided a temporary lifeline yesterday along with the Fed. But other possible suitors include Citibank and HSBC, the Wall ...

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