Wall Street bailout

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Some Banks Want to Bail on Bailout
Some Banks Want to Bail
on Bailout

Some Banks Want to Bail on Bailout

Critics charge growing list of conditions will damage industry

(Newser) - A growing number of banks are seeking to return or avoid government bailout funds because of the lengthening list of conditions attached to the money, the New York Times reports. Critics say the terms—including modification of mortgages and caps on executive pay—smack of economic engineering. Bankers are especially...

Citigroup Paid Employees $13M for Scrapped Resort Trip

Bahamas trip for top performers was nixed after spotlight put on bank's spending

(Newser) - Citigroup employees whose jaunts to the Bahamas were canceled amid scrutiny of the bailed-out bank's spending were paid $13 million in compensation for the scrapped getaway, insiders tell Bloomberg. Sales agents—all 1900 of them—who had been scheduled to stay at a swanky resort were paid $5,000 each,...

Event Planners Slam Kerry's Bank-Party Ban

Killing big bashes would zap jobs, complain critics

(Newser) - Event planners say Sen. John Kerry's legislative push to prevent bailed-out banks from throwing big bashes could end up bashing the economy even more, the New York Post reports. It could "hurt a lot of the people the government is trying to help," says an industry rep of...

Investment Funds May Replace 'Bad Bank'

Administration eyes creation of private funds to suck up toxic debt

(Newser) - The Obama administration is considering creating multiple investment funds to buy up the toxic debts at the heart of the financial crisis, insiders tell the Wall Street Journal. No fixed structure has been agreed upon, but under one leading plan the funds would be administered by private investment managers who...

Ailing AIG Nears $30B Deal With Feds

(Newser) - Facing a roughly $60 billion fourth quarter loss—the biggest in corporate history—American International Group is cutting a deal with the feds to stay alive, Reuters reports. If AIG's board approves the agreement tomorrow, Washington will give the insurer another $30 billion in equity and a lower interest rate...

Outrage Over Bank's Golf Tourney Is Misplaced
Outrage Over Bank's Golf Tourney Is Misplaced
OPINION

Outrage Over Bank's Golf Tourney Is Misplaced

(Newser) - “Golf, with its traditional fat-cat image, is an easy target for abuse, some of it deserved,” John Paul Newport writes in the Wall Street Journal. But the recent hubbub over Northern Trust’s sponsorship of a PGA tourney—that bank received $1.6 billion in TARP funds—threatens...

US to Take 36% Stake in Citi
 US to Take 36% Stake in Citi 
UPDATED

US to Take 36% Stake in Citi

Treasury will take up to 40% of bank in return for boardroom overhaul

(Newser) - Citigroup and the federal government have reached a deal to boost the US stake in the bank to up to 40%, the parties announced this morning. The deal gives shareholders more protection, but in return, agrees to a Treasury Department demand for an overhaul of the embattled bank's board of...

Banks That Fail 'Stress Test' Have 6 Months to Fix

(Newser) - The federal government has begun its so-called "stress tests" of the nation's big banks, reports the Los Angeles Times. The tests will run through April, and the banks will have to prove they can withstand a worsening economy—even if unemployment rises above 10% and home prices decline 22%....

Citi Struggles Under Fed Oversight, About to Get More

Tottering bank may give 40% of shares to Washington

(Newser) - Citigroup is in talks with Washington about a restructured deal that would see the US convert its 7.8% stake of preferred shares into up to 40% of common stock. The deal would provide Citi with desperately needed capital, but would place the bank under further control of the federal...

To Save Economy, Give Money to Morons
To Save Economy, Give Money to Morons
OPINION

To Save Economy, Give Money to Morons

They're dumb, but they're 'our countrymen'

(Newser) - Our economic system is supposed to be based on the principle that people must live with the consequences of their decisions, which tends to make them more careful deciders. “We’ve made a hash of all that,” writes David Brooks of the New York Times. We’ve had...

BofA Boss Ordered to Testify in $3.6B Bonus Probe

Massive perks paid out before pricey bailout

(Newser) - Bank of America chairman Kenneth Lewis has been subpoenaed to testify in the investigation into possible deception of investors over the Merrill Lynch takeover, sources tell the Wall Street Journal. New York Attorney General Andrew Cuomo is exploring whether the bank broke the law by failing to inform investors of...

Geithner Gets Warmer Reception at G-8 Summit

(Newser) - This was no Roman holiday for Timothy Geithner. But after crashing global markets with a botched rollout of a bank rescue plan, the new Treasury secretary earned better reviews from global finance officials meeting in Rome. Geithner appeared more assured at a news conference here following two days of G-8...

Stimulus Slashes Bank Bonuses

Package bans cash bonuses for bailed-out firms' high earners

(Newser) - A late addition to the stimulus package puts tougher restrictions on executive pay at bailed-out financial institutions, reports the Wall Street Journal. The rules go further than the Obama administration proposed, affect more employees, and could seriously crimp the culture of gargantuan bonuses. The big one: Bonuses can't exceed one-third...

'Humbled' Bank CEOs Will Deny Blowing Bailout

Top bankers face grilling today from furious Congress

(Newser) - Bank bosses being grilled by Congress today will defend their use of bailout cash, according to prepared testimony obtained by Reuters. Chief executives from the eight biggest US banks arrive in Washington this morning—by public transportation instead of private jet this time—and are expected to strike a note...

Geithner Wins Tug-of-War for Hands-Off Bailout

Treasury secretary resists calls for firmer government intervention

(Newser) - Treasury Secretary Timothy Geithner has prevailed over top administration officials who sought tougher restrictions on financial institutions in the revamped bailout plan to be unveiled today, reports the New York Times. Geithner, pointing to failures in countries that adopted more interventionist measures, successfully resisted calls to dictate how the cash...

New Bailout Plan Hinges on Private Investors

Treasury will set 'floor price' on distressed assets to lure buyers

(Newser) - The Treasury's latest plan to rescue the banking industry relies heavily on private-sector investors, the New York Times reports. The government will guarantee a floor price on the toxic assets weighing down banks’ balance sheets, encouraging hedge funds, private equity groups, and even insurers to buy them. The plan should...

Geithner Delays Bank Bailout Until Tuesday

Treasury Department focuses on pushing stimulus through Congress

(Newser) - The Treasury Department will wait until Tuesday to unveil the next bank bailout while lawmakers and President Obama debate their multibillion-dollar stimulus plan, the New York Times reports. “With record high job losses, and weakening economic forecasts, we’re focused on working with Congress to pass an economic recovery...

Skirting Pay Cap Will Be a Piece of Cake

Obama proposal leaves wiggle room, and Wall St. usually good at finding it

(Newser) - The squeeze on big paydays for executives of bailed-out banks will probably leave Wall Street plenty of wiggle room. Consultants on executive pay say the caps imposed by President Obama yesterday will probably apply only to a few executives—not star traders, brokers, and salespeople who routinely earn whopping pay...

Citi's Mets Deal Makes Sense in the Long Run
Citi's Mets Deal Makes Sense in the Long Run
OPINION

Citi's Mets Deal Makes Sense in the Long Run

$400M, over decades, will generate lots of publicity, help pay back bailout funds

(Newser) - Citi’s $400 million naming-rights deal with the New York Mets may seem “tone-deaf and stupid” after the bank took $45 billion in bailout funds, Daniel Gross writes in Newsweek—but it’s a good idea. “Companies—even companies getting bailed out by the feds—need to attract...

C'mon, Mr Prez, Nobody Will Run Bank for $500K
C'mon, Mr Prez, Nobody Will Run Bank for $500K
OPINION

C'mon, Mr Prez, Nobody Will Run Bank for $500K

Obama, after pledge to be above the noise, falls prey to it instead

(Newser) - Sure, bankers make too much money, but President Obama’s ceiling “is just a misguided attempt to quiet the peanut gallery,” writes Megan Barnett in Portfolio. The $500,000-per-year executive cap will discourage banks from taking needed government cash, and drive away top talent. “Money is what...

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