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2008 Business News History Archive


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2008 Business Archive:

20080929

Giuliani

Paulson

Corporate

Government

Law

Politics

History

"The Rich Are Staging a Coup This Morning ...a message from Michael Moore." ... "The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, [Republican President] Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. [United States] Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door." ... "No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday's New York Times and you can see what the real deal is:"

    ""Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it."
    ""Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages."
    ""At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees."
    ""Nobody wants to be left out of Treasury's proposal to buy up bad assets of financial institutions.""

"Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even [Republican] Rudy Giuliani is lobbying for his firm to be hired (and paid) to "consult" in the bailout." ... "The problem is, nobody truly knows what this "collapse" is all about. Even [Republican President Bush's] Treasury Secretary [Henry] Paulson admitted he doesn't know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can't figure it out nor can he explain it to anyone. " -By Michael Moore

20080925

John McCain

Barack Obama

Financial

Law

Veterans

Housing

Energy

2008 Election

Iran

"McCain has not sponsored a banking bill this Congress." ... "[2008 Election] Republican presidential nominee John McCain has not introduced any banking or housing bills in the 110th Congress, while [2008 Election Presidential] Democratic rival Barack Obama has proposed five." ... "Obama’s legislation calls for bolstering housing assistance for veterans, amending the Securities and Exchange Act of 1934 to provide shareholders with an advisory vote on executive compensation, halting mortgage transactions that promote fraud, authorizing local and state governments to crack down on companies that invest in Iran's energy sector and authorizing a pilot program to prevent at-risk veterans from becoming homeless." -By Bob Cusack

-TheHill.com

Financial

Crisis

Politics

Government

"Bailout Could Deepen Crisis, CBO Chief Says: Asset Sales May Lead to Write-Downs, Insolvencies, Orszag Tells Congress." ... "The director of the Congressional Budget Office said yesterday that the proposed Wall Street bailout could actually worsen the current financial crisis." ... "During testimony before the House Budget Committee, Peter R. Orszag -- Congress's top bookkeeper --said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems." ... ""Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values," Orszag said in his testimony. "Establishing clearer prices might reveal those institutions to be insolvent."" ... "In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X's real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company." ... "Such companies "look solvent today only because it's kind of hidden," Orszag said. "They actually are insolvent" already, he said." (1, 2) -By Frank Ahrens

-WashingtonPost

Germany

Global

Financial

Crisis

Politics

"Era of U.S. financial dominance at an end: Germany." ... "Germany blamed the United States on Thursday for spawning the global financial crisis with a blind drive for higher profits and said it must now accept more market regulation and a loss of its financial superpower status." ... "In some of the harshest criticism of the United States since the crisis threw Wall Street banks into financial disarray this month, German Finance Minister Peer Steinbrueck said the turmoil would leave "deep marks" on both sides of the Atlantic, but called it primarily an American problem." ... ""The world will never be as it was before the crisis," Steinbrueck told the Bundestag lower house of parliament." ... ""The United States will lose its superpower status in the world financial system. The world financial system will become more multi-polar," he said." ... "The crisis has put the [Republican President] Bush White House, which has long advocated a hands-off approach to markets, on the defensive and forced it to rethink its financial policy." -By Noah Barkin and Kerstin Gehmlich

-Reuters via -Yahoo

Jobs

History

Weather

Disasters

Louisiana

Texas

"Jobless claims soar near 7-year high: First economic report since financial meltdown shows initial unemployment claims rose by 7%, boosted by Hurricanes Gustav and Ike." ... "According to a study by the Department of Labor, initial filings for state jobless benefits increased by a seasonally adjusted 32,000 to 493,000 in the third week of September. It was the highest number of weekly claims since Sept. 29, 2001, when unemployment soared in the wake of the Sept. 11 terrorist attacks." ... "The Labor Department said about 50,000 of the new claims were due to the effects of Hurricanes Gustav and Ike. There were 18,400 more claims from the week before in Louisiana alone, and Texas added 1,200." ... "Earlier this month, the government reported that there were 84,000 jobs lost in August, bringing to 605,000 the number of jobs cut from payrolls by U.S. employers in the first eight months of the year." ... "The unemployment rate surged to 6.1% last month, a nearly five-year high and up from 5.7% in July. In the last recession, unemployment reached a high of 6.3%." -By David Goldman

-CNN

20080924

John McCain

Financial

Disaster

Politics

Government

Massachusetts

Arizona

2008 Election

"Democrats claim Wall St. bailout breakthrough." ... "Democratic [Massachusetts Representative] Rep. Barney Frank said on Wednesday Democrats had reached an agreement to stem one of the worst U.S. financial disasters in decades, and that there would be enough votes to pass the measure and send it to [Republican] President George W. Bush to sign into law." ... "Frank took a dig at [2008 Election] Republican presidential nominee John McCain, who interrupted his campaign to return to Washington on Thursday to help work on a Wall Street bailout." ... ""All of sudden, now that we are on the verge of making a deal, John McCain here drops himself in to help us make a deal, Frank said." ... "He expressed fear that McCain, a U.S. [United States] senator from Arizona who has spent much of the year away from the Capitol campaigning, could end up slowing down work on the bill." ... "The Massachusetts Democrat noted that a meeting on Capitol Hill on Thursday will be interrupted for a "photo op" at the White House with congressional Democrats and Republicans as well as Bush." ... ""We're trying to rescue the economy, not the McCain campaign," Frank said." ... "Democrats blamed the crisis largely on the failure of Bush to adequately regulate the financial industry." (1, 2, 3) -By Richard Cowan and Thomas Ferraro with contributions by Doina Chiacu

-Reuters

John McCain

Rick Davis

Corporate

Politics

Federal

Housing

Law

2008 Election

"Unsevered Ties? Regulatory filings indicate that [2008 Election Republican Presidential Candidate John] McCain campaign chief Rick Davis remains an officer with his lobbying firm." ... "Rick Davis, John McCain's campaign manager, has remained the treasurer and a corporate director of his lobbying firm this year, despite repeated statements by campaign officials that he had ended his relationship with the firm in 2006, according to corporate records." ... "The McCain campaign this week criticized news stories disclosing that, since 2006, Davis's firm has been paid a $15,000-a-month consulting fee from Freddie Mac, the troubled [housing] mortgage giant recently put under federal conservatorship. The stories, published Tuesday by NEWSWEEK, The New York Times and Roll Call, reported that the consulting fees continued until last month even though, according to two sources familiar with the arrangement, neither Davis nor anybody else at his firm did any substantial work for the payments." ... "Filings made by "Davis Manafort Partners" with the Virginia Corporation Commission as recently as April 1, 2008, show that Davis was still listed as one of only two corporate officers and directors of the firm, according to records on the commission’s Web site [PDF] reviewed by NEWSWEEK. That filing records Davis as the "treas/clerk" of the firm; his business partner, Paul Manafort is listed as the president and chief executive officer." ... "Another filing by “Davis Manafort, Inc.” [PDF] (with the same Alexandria, Va. [Virginia] address, and recorded on Oct. 17, 2007) also lists Davis as an officer and director of the firm, reporting his position as "T/Clerk," a reference to his formal title as corporate treasurer and clerk." ... "Both filings are annual reports of basic corporate information that are required by Virginia state law." -By Michael Isikoff

-Newsweek

Sarah Palin

John McCain

Financial

Crisis

Politics

Government

Law

Alaska

2008 Election

"Palin: US could face another Great Depression." ... "[2008 Election] Republican vice presidential candidate Sarah Palin said Wednesday that the United States could be headed for another Great Depression if Congress doesn't act on the financial crisis." ... "Asked whether there's a risk of another Great Depression if Congress doesn't approve a $700 billion bailout package, Palin said, "Unfortunately, that is the road that America may find itself on."" ... "Couric pressed Palin on examples of how McCain, a 26-year congressional veteran, had led the charge for more oversight." ... "The Alaska governor cited [2008 Election Republican Presidential Candidate John] McCain's warnings about Fannie Mae and Freddie Mac two years ago as well as image as a maverick. Questioned again for examples, and reminded that McCain had been chairman of the Commerce Committee, Palin said, "I'll try to find you some and I'll bring them to you."" ... "McCain has insisted Palin is ready to take over as president, but he made no mention of including her in the meetings he wants in Washington to deal with the financial crisis." -By Sara Kugler

-AP via -Yahoo

John McCain

Politics

Money

2008 Election

"EXCLUSIVE: John McCain Uses Idol Makeup Artist!" ... "The 72-year-old [2008 Election Republican Presidential Candidate John McCain] was recently made TV-ready by makeup artist Tifanie White who's worked on So You Think You Can Dance and American Idol." ... "McCain paid the 2002 beauty-school grad $5,583.43 for her services, according to the Federal Election Commission."

-UsMagazine.com

20080923

John McCain

Rick Davis

Corporate

Politics

Federal

Housing

Wisconsin

2008 Election

"McCain Transition Head Lobbied for Freddie Mac Before Takeover." ... "The lobbying firm of the man Republicans say [2008 Election Republican Presidential Candidate] John McCain has chosen to begin planning a presidential transition earned more than a quarter of a million dollars this year representing Freddie Mac, one of the companies McCain blames for the nation's financial crisis." ... "Timmons & Co., whose founder and chairman emeritus is William Timmons Sr., was registered to lobby for Freddie Mac from 2000 through this month, when the federal government took over both Freddie Mac and Fannie Mae." ... "Newly available congressional records show Timmons's firm received $260,000 this year before its lobbying activities were barred under terms of the government rescue of the failed [housing] mortgage giant. Timmons, 77, is listed as a lobbyist for Freddie Mac on the company's midyear financial-disclosure form." ... "McCain has labeled Freddie Mac and Fannie Mae as prime culprits in creating the financial storm that has roiled Wall Street and Washington." ... "``At the center of the problem were the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac,'' he said last week in Green Bay, Wisconsin." ... "``Using money and influence, they prevented reforms that would have curbed their power and limited their ability to damage our economy,'' he said. ``And now, as ever, the American taxpayers are left to pay the price for Washington's failure.''" ... "The McCain camp was also dealing with reports about the lobbying work of campaign manager Rick Davis." ... "The New York Times reported yesterday that Davis was paid almost $2 million in fees over five years by a group primarily funded by Freddie Mac and Fannie Mae that was intended to help stave off more stringent federal regulation of the housing companies. " -By Jonathan D. Salant and Timothy J. Burger

-Bloomberg

Henry Paulson

Financial

Crisis

Politics

Legislation

"Bad News For The Bailout: The [Republican President Bush Treasury Secretary Henry] Paulson Plan." ... "At a Senate Banking Committee hearing Tuesday, lawmakers on both sides of the aisle complained of being rushed to pass legislation or else risk financial meltdown." ... "In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy." ... ""It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."" -By Brian Wingfield and Josh Zumbrun with contributions by Liz Moyer

-Forbes

Dick Cheney

Henry Paulson

Corporate

Government

Lawmakers

Politics

"White House Dispatches Team to Push Economic Bill." ... "The White House today is drumming up extraordinary pressure on Congress to approve its plan to enact a $700 billion mortgage bailout fund, suggesting the markets cannot wait much longer and dispatching Vice President Cheney and other top officials up Pennsylvania Avenue to jawbone lawmakers." ... "Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, who collaborated in drawing up the proposal, are testifying this morning on Capitol Hill in an effort to defend their handiwork." ... "[Republican President Bush's Deputy Press Secretary Tony] Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough." -By Keith Koffler

-RollCall.com

Iraq

Investigators

Reconstruction

Accounting

Politics

"$13 Billion in Iraq Aid Wasted Or Stolen, Ex-Investigator Says." ... "A former Iraqi official estimated yesterday that more than $13 billion meant for reconstruction projects in Iraq was wasted or stolen through elaborate fraud schemes." ... "Salam Adhoob, a former chief investigator for Iraq's Commission on Public Integrity, told the Senate Democratic Policy Committee, an arm of the Democratic caucus, that an Iraqi auditing bureau "could not properly account for" the money." ... "While many of the projects audited "were not needed -- and many were never built," he said, "this very real fact remains: Billions of American dollars that paid for these projects are now gone."" ... "He said a report that went to Iraqi Prime Minister Nouri al-Maliki and other top Iraqi officials was never published because "nobody cares" about investigating such cases. Many investigators, he said, feared for their safety because 32 of his co-workers have been murdered. " -By Dana Hedgpeth with contributions by Julie Tate

-WashingtonPost

Henry Paulson

Corporate

Government

Legislative

Politics

"Good ideas and lies." ... "So, this morning [Republican President Bush's Treasury Secretary] Hank Paulson told a whopper:"

[Hank Paulson:] "We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. That’s the role of Congress, that’s something we’re going to work on together. So if any of you felt that I didn’t believe that we needed oversight: I believe we need oversight. We need oversight."

"What the proposal actually did, of course, was explicitly rule out any oversight, plus grant immunity from future review:"

"Sec. 8. Review."
"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

"I’m not playing gotcha here. This is telling: if Paulson can’t be honest about what he himself sent to Congress — if he not only made an incredible power grab, but is now engaged in black-is-white claims that he didn’t — there is no reason to trust him on anything related to his bailout plan." -By Paul Krugman/Blog

-NYTimes

Housing

Consumer

People

Working

Families

"Millions spend half of income on housing." ... "[Al] Ray is one of more than 7.5 million people — almost 15 percent of American homeowners with a mortgage — who are spending half of their income or more on housing costs, according to 2007 data released Tuesday by the U.S. Census Bureau. That is up from nearly 7.1 million the year before." ... "Traditionally, the government and most lenders consider a homeowner spending 30 percent or more of their income on housing costs to be financially burdened. But that definition now covers almost 38 percent of American homeowners with a mortgage — 19 million of them." ... "Though home prices have fallen this year, in the most expensive markets where home prices tripled during the boom, many working families still cannot afford to buy a home." ... "More than 4 million homeowners were at least one month behind on their loans at the end of June, and almost 500,000 had started the foreclosure process, according to the Mortgage Bankers Association." -By Adrian Sainz and Alan Zibel with contributions by Allen Chen

-AP via -Yahoo

20080921

John McCain

Corporate

Government

Disaster

Politics

US_Debt

Healthcare

Social Security

Rights

Book

2008 Election

"Naomi Klein: Financial crisis part of Bush 'shock doctrine'." ... "The bailout of Wall Street’s largest players by the federal government is another example of the [Republican President] Bush administration pursuing a corporate agenda at the expense of average Americans, a prominent author argued on Friday." ... "In a Friday night interview on HBO's Real Time with Bill Maher, Naomi Klein said President Bush’s $700 billion proposal to rescue the financial sector stems from a profiteering streak that has dominated the last eight years." ... ""The disaster is far from over," Klein said. "The disaster was on Wall Street and they have moved the disaster to Main Street."" ... "Referring to the bailout, Klein said the "bomb has yet to detonate" and that the real crisis will strike when tax payers are overwhelmed when faced with the debt from the bailouts." ... "According to Klein, the bomb will detonate if Sen. John McCain becomes president and "rationalizes" that it is necessary to privatize government programs like social security and healthcare because neither the government nor Americans can afford them." ... ""The real disaster has yet to come; the real disaster is the debt that is going to explode on American tax payers," Klein said." ... "Klein’s book, "The Shock Doctrine: The Rise of Disaster Capitalism," outlines how crises, real or perceived, have been used by governments, especially the United States under George W. Bush, to strong-arm a disoriented citizenry into accepting changes to its rights, and its government, that it wouldn't otherwise accept." -By David Edwards and Andrew McLemore

-RawStory.com

WATCH: Naomi Klein on Republican Bush's "Shock Doctrine"

Henry Paulson

Government

Politics

Foreign

"Foreign Banks Can Unload Bad Debt Too: Paulson." ... "[Republican President Bush's] Treasury Secretary Henry Paulson said Sunday that foreign banks will be able to unload bad financial assets under a $700 billion U.S. proposal aimed at restoring order during a devastating financial crisis." ... ""Yes, and they should. Because ... if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution," Paulson said on ABC TV."

-CNBC

John McCain

Barack Obama

Health-Care

Economy

Parents

Social Security

Journal

Fla

2008 Election

"McCain Health-Care Article Fuels New Clash Over Economy." ... "An article [by McCain] about health care published in an obscure journal led to a new skirmish Saturday between the campaigns of [2008 Election Presidential Candidates] Democrat Barack Obama and Republican John McCain over who should be trusted with the ailing economy." ... "The article was published in Contingencies magazine, which is produced under the auspices of the American Academy of Actuaries. In it, McCain touted his plans for increasing competition in health care as one way to expand coverage and reduce costs." ... "McCain wrote, "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."" ... "Obama, appearing at Bethune-Cookman University in Daytona Beach, Fla. [Florida], mocked his rival for sounding out of touch at a time when Washington is moving rapidly to re-regulate the financial industry to curb the excesses that put the system into near-paralysis in the past week." ... ""So let me get this straight -- he wants to run health care like they've been running Wall Street," Obama told the audience. "Well, Senator, I know some folks on Main Street who aren't going to think that's such a good idea."" ... "With millions of Americans worrying about their retirement security as federal officials rushed to stabilize the shaky financial system, Obama also seized on McCain's support for partial privatization of Social Security. He said McCain was prepared to gamble with people's life savings." ... ""If my opponent had his way, the millions of Floridians who rely on it would've had their Social Security tied up in the stock market this week," he said. "Millions would've watched as the market tumbled and their nest egg disappeared before their eyes. Millions of families would've been scrambling to figure out how to give their mothers and fathers, their grandmothers and grandfathers, the secure retirement that every American deserves."" (1, 2) -By Dan Balz

-WashingtonPost

Sarah Palin

Crime

Women

Medical

DNA

Law

Politics

Alaska

2008 Election

"Palin's town charged women for rape exams." ... "[2008 Election Republican Vice Presidential Candidate and Governor of] Alaska Gov. Sarah Palin's hometown required women to pay for their own rape examinations while she was mayor, a practice her police chief fought to keep as late as 2000." ... "Former state [Alaska State Democratic Representative] Rep. Eric Croft, a Democrat, sponsored a state law requiring cities to provide the examinations free of charge to victims. He said the only ongoing resistance he met was from Wasilla [Alaska], where Palin was mayor from 1996 to 2002." ... ""It was one of those things everyone could agree on except Wasilla," Croft told CNN. "We couldn't convince the chief of police to stop charging them."" ... "Alaska's Legislature in 2000 banned the practice of charging women for rape exam kits -- which experts said could cost up to $1,000." ... "For years, Alaska has had the worst record of any state in rape and in murder of women by men. The rape rate in Alaska is 2.5 times the national average." ... "The bill, HB270, was before the legislature for six months. In testimony, one expert called the practice of billing the victim "incomprehensible." Others compared it to "dust[ing] for fingerprints" after a burglary, only "the victim's body is the crime scene."" ... "During a rape exam, the victim removes her clothing and a medical professional gathers DNA evidence from her body. There is also a medical component to assess her injuries." ... "[Tara] Henry, the forensic nurse, said charging victims "retraumatizes them."" ... ""Asking them to pay for something law enforcement needs in order to investigate their case, it's almost like blaming them for getting sexually assaulted," she said." -By Jessica Yellin

-CNN

20080920

John McCain

Cindy McCain

Barack Obama

Auto

Workers

Homes

Michigan

2008 Election

"All the Candidates’ Cars." ... "When you have seven homes [McCain], that's a lot of garages to fill. " ... "And based on public vehicle-registration records, here's the score. John and Cindy McCain: 13. Barack and Michelle Obama: one." ... "One vehicle in the McCain fleet has caused a small flap. United Auto Workers president Ron Gettelfinger, an Obama backer, accused McCain this month of "flip-flopping" on who bought daughter Meghan's foreign-made Toyota Prius. McCain said last year that he bought it, but then told a Detroit [Michigan] TV station on [September] Sept. 7 that Meghan "bought it, I believe, herself." (The McCain campaign did not respond to multiple requests for comment.)" ... "Obama's lone vehicle also is a green machine, a 2008 Ford Escape hybrid." -By Keith Naughton and Hilary Shenfeld

-Newsweek

20080919

Henry Paulson

Corporate

Government

Illegal

Accounting

Politics

History

Global

"Can you trust a Wall Street veteran with a Wall Street bailout?" ... "Making the rounds on the Sunday morning talk shows, [Republican President Bush's] Treasury Secretary Henry Paulson repeatedly said today's financial problems were long in the making. He should know. He was part of the Gold Rush that has brought the global financial system to the brink of collapse." ... "Paulson presided over one of the most profitable runs on Wall Street as chairman and chief executive officer of investment banking titan Goldman Sachs & Co. from 1999 until [Republican] President Bush nominated him on May 30, 2006 to take over the Treasury Department." ... "But with Paulson now seeking virtually unfettered authority to administer the largest bailout of the financial industry in U.S. [United States] history, many are wondering whether Paulson also doesn't come with enormous potential conflicts of interest." ... "Paulson has surrounded himself with former Goldman executives as he tries to navigate the domino-like collapse of several parts of the global financial market. And others have gone off to lead companies that could be among those that receive a bailout." ... "The administration's draft law also would preclude court review of steps Paulson might take, something Joshua Rosner, managing director of economic researcher Graham Fisher & Co. in New York, said could be used to mask previous illegal activity." ... "The Treasury proposal sent to Congress also offers no process to hire asset managers in an open and competitive process. That's particularly questionable given that Wall Street players are now hiring Wall Street players, Rosner said." ... ""This seems to invite a risk of collusion between sellers and buyers to the detriment of the taxpayer," he wrote." ... "At a minimum, there's irony in Paulson being in charge of so large a bailout." ... "In the last annual report at Goldman that Paulson signed off on in November 2005, a year in which he received $38 million in compensation, investors were clearly told that the federal government wouldn't be there to save them from bad investments." ... "In 2002, Paulson received $12.1 million in compensation, including a $6.3 million bonus — an improvement over the previous three years when Wall Street accounting scandals unsettled investment banks, including a $1.5 billion settlement Goldman and other banks paid for issuing overly bullish research reports that promoted deals the banks themselves were involved in." ... "Published reports said Paulson received $30 million in compensation and salary in 2003." -By Kevin G. Hall

-McClatchyDC.com

Henry Paulson

Government

Money

Politics

Law

American International Group

Calif

"Bush Asking For $700 Billion Bailout." ... "Struggling to stave off financial catastrophe, the [Republican President] Bush administration on Friday laid out a radical bailout plan with a jawdropping price tag _ a takeover of a half-trillion dollars or more in worthless mortgages and other bad debt held by tottering institutions." ... "Congressional officials said they expected a request for legal authority to buy up the bad loans, at a cost in excess of $500 billion to the government." ... "The federal government already has pledged more than $600 billion [Reuters reports: $900 billion] in the past year to bail out, or help bail out, some of the biggest names in American finance. That includes the rescue of investment bank Bear Stearns in March, the takeover of mortgage giants Fannie Mae and Freddie Mac earlier this month and the takeover of the world's largest insurance company, American International Group, just this week." ... "In a session with House Democrats, they described a plan where the government would in essence set up reverse auctions, putting up money for a class of distressed assets _ such as loans that are delinquent but not in default _ and financial institutions would compete for how little they would accept for the investments, said [California Democratic Representative] Rep. Brad Sherman, D-Calif. [Democratic-California], who participated in the call." ... ""You give them good cash; they give you the worst of the worst," Sherman said of the plan, which he complained that Bush and his economic advisers were trying to panic lawmakers into rubber-stamping." ... "[Republican President Bush's Treasury Secretary Henry] Paulson rejected Democrats' calls to include tighter regulations, corporate reforms or limits on executive compensation as part of the measure, Sherman said. "He's doing his best to paint a picture of the sky falling, and then he says, because the sky's falling, you have to do it my way."" -By Tom Raum and Jeannine Aversa with contributions by Julie Hirschfeld Davis, Martin Crutsinger, Andrew Taylor, Marcy Gordon, David Espo, Jim Abrams, and Joe Bel Bruno

-AP via -HuffingtonPost.com

John McCain

Banking

Health

Politics

Government

Law

2008 Election

"McCain on banking and health." ... "Here’s what [2008 Election Republican Presidential Candidate and John] McCain has to say about the wonders of market-based health reform:"

"[McCain:] "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.""

"So McCain, who now poses as the scourge of Wall Street, was praising financial deregulation like 10 seconds ago — and promising that if we marketize health care, it will perform as well as the financial industry!" -By Paul Krugman/Blog

-NYTimes

20080917

Finance

American International Group

"S&P says pressure building on U.S. "AAA" rating." ... "Pressure is building on the pristine "AAA" rating of the United States after a federal bailout of American International Group Inc, the chairman of Standard & Poor's sovereign ratings committee said on Wednesday." ... "The $85 billion bailout of AIG on Tuesday by the U.S. Federal Reserve "has weakened the fiscal profile of the United States," S&P's John Chambers told Reuters in an interview." (1, 2, 3) -By Walden Siew with contributions by Jan Paschal and Chizu Nomiyama

-Reuters

American International Group

Government

Politics

Housing

"Tab for Government Rescues Rises to $900 Billion." ... "The U.S. [United States] Federal Reserve stepped in to rescue insurance giant American International Group from bankruptcy with an $85 billion loan on Tuesday, the latest in a series of bailouts and loans for the financial and housing sectors." ... "The action brings the total tab for government rescues and special loan facilities this year to more than $900 billion."

-Reuters via -CNBC

20080916

Money

Politics

Jobs

Federal

History

"Democrats are better for the economy than Republicans." ... "The figures below are all from the annual Economic Report of the President, and the analysis is primitive. Nevertheless, what these numbers show almost beyond doubt is that Democrats are better at virtually every economic task that is important to Republicans." ... "This exercise implicitly assumes that lower taxes are always good and higher government spending is always bad. " ... "The only point is that if you find the Republican mantra of lower taxes and smaller government appealing, and if you care only about how fast the economy is growing, not how that growth is shared, you should vote Democratic." ... "On average, in years when the president is a Democrat, the economy grows faster; inflation is lower; fewer people can't find a job; the federal government spends a smaller share of GDP, whether or not you include defense spending; and the deficit is lower (or—sweet [Democratic President] Clinton-years memory—the surplus is higher)." -By Michael Kinsley

-Slate

Money

Politics

Calif

"Federal bank insurance fund dwindling." ... "Banks are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort." ... "The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday." ... "Eleven federally insured banks and thrifts have failed this year, including Pasadena, Calif. [California]-based IndyMac Bank, by far the largest shut down by regulators." ... "The [FDIC] fund, which is marking its 75th anniversary this year with a "Face Your Finances" campaign, is at $45.2 billion — the lowest level since 2003." ... "The failure of IndyMac Bank in July cost $8.9 billion." ... "There were 117 banks and thrifts considered to be in trouble in the second quarter, the highest level since 2003, according to FDIC data released last month." -By Marcy Gordon with contributions by Christopher S. Rugaber

-AP via -Yahoo

Sarah Palin

Don Young

Money

Politics

Federal

Transportation

Construction

Animals

Environment

Alaska

2008 Election

"Palin supports $600 million 'other' bridge project." ... "[Alaska Republican Governor] Gov. Sarah Palin may eventually have said "no thanks" to a federally funded Bridge to Nowhere [after supporting it even after Congress had stopped it]." ... "But a bridge to her hometown of Wasilla [Alaska], that's a different story." ... "A $600 million bridge and highway project to link Alaska's largest city to Palin's town of 7,000 residents is moving full speed ahead, despite concerns the bridge could worsen some commuting and threaten a population of beluga whales." ... "Local officials already have spent $42 million on plans to route traffic across the Knik Arm inlet, a narrow finger of water extending roughly 25 miles northeast of Anchorage toward Wasilla. The proposal exists thanks to an earmark request by Republican [Alaska Representative] Rep. Don Young, whose son-in-law has a small stake in property near the bridge's proposed western span." ... ""This is basically an incredibly expensive project that doesn't help commuters, doesn't help create jobs and may drive whales to extinction," said Justin Massey, an attorney advising environmentalists opposed to the proposal. "It is also a project that serves the area where the governor is from, which is near and dear to her heart."" ... "Palin still supports the second bridge, officially named Don Young's Way in honor of the congressman." -By Garance Burke

-AP via -Yahoo

Sarah Palin

Criminal

Money

Politics

Women

Children

Law

Federal

Alaska

2008 Election

"Source: Sex Assault Program Cited in Monegan Firing Targeted Child Abusers." ... "So [2008 Election Republican Presidential Candidate and Alaska Governor] Sarah Palin's latest explanation for why she fired Walt Monegan is that he had gone over her head in seeking federal money for an initiative to combat sexual assault crimes, before she had approved the program." ... "But it now appears that the program in question is one that most elected officials would be wary of admitting they hadn't strongly backed. According to Peggy Brown, who heads the Alaska Network on Domestic Violence and Sexual Assault, Monegan wanted to use the federal money to hire retired troopers and law enforcement officials, and assign them to investigate the most egregious cases of sexual assault -- including those against children." ... "In other words, if Palin's new story is true, she fired Monegan for being too aggressive in going after child molesters." ... "ABC News reported yesterday that, although Alaska leads the nation in reported rapes per capita, Palin hasn't made the issue a priority as governor." ... "Monegan, however, appeared eager to change that. "He seemed to get the issue and really took it seriously," Brown told TPMmuckraker." ... "According to the Palin camp, too seriously." -By Zachary Roth

-TPMMuckracker .TalkingPointsMemo

Noteworthy

Emergency

Money

Politics

Legal

History

AIG

"U.S. to Take Over AIG in $85 Billion Bailout; Central Banks Inject Cash as Credit Dries Up: Emergency Loan Effectively Gives Government Control of Insurer; Historic Move Would Cap 10 Days That Reshaped U.S. [Unijted States] Finance." ... "[Under Republican President Bush] The U.S. government seized control of American International Group Inc. -- one of the world's biggest insurers -- in an $85 billion deal that signaled the intensity of its concerns about the danger a collapse could pose to the financial system." ... "The step marks a dramatic turnabout for the federal government, which had been strongly resisting overtures from AIG for an emergency loan or some intervention that would prevent the insurer from falling into bankruptcy. Just last weekend, the government essentially pulled the plug on Lehman Brothers Holdings Inc., allowing the big investment bank to go under instead of giving it financial support. This time, the government decided AIG truly was too big to fail." ... "Under terms hammered out Tuesday night, the Fed will lend up to $85 billion to AIG, and the U.S. government will effectively get a 79.9% equity stake in the insurer in the form of warrants called equity participation notes. The two-year loan will carry an interest rate of Libor plus 8.5 percentage points. (Libor, the London interbank offered rate, is a common short-term lending benchmark.)" ... "The loan is secured by AIG's assets, including its profitable insurance businesses, giving the Fed some protection even if markets continue to sink. And if AIG rebounds, taxpayers could reap a big profit through the government's equity stake." ... "It puts the government in control of a private insurer -- a historic development, particularly considering that AIG isn't directly regulated by the federal government. The Fed took the highly unusual step using legal authority granted in the Federal Reserve Act, which allows it to lend to nonbanks under "unusual and exigent" circumstances, something it invoked when Bear Stearns Cos. was rescued in March." ... "The U.S. on Sept. 6 took over mortgage-lending giants Fannie Mae and Freddie Mac as they teetered near collapse." ... "In bailing out AIG, the Federal Reserve appeared to be motivated in part by worries that Wall Street's financial crisis could begin to spill over into seemingly safe investments held by small investors, such as money-market funds that invest in AIG debt." ... "Indeed, on Tuesday the $62 billion Primary Fund from the Reserve, a New York money-market firm, said it "broke the buck" -- that is, its net asset value fell below the $1-a-share level that funds like this must maintain. Breaking the buck is an extremely rare occurrence. The fund was pinched by investments in bonds issued by now collapsing Lehman Brothers." ... "Money-market funds are supposed to be among the safest investments available. No fund in the $3.6 trillion money-market industry has lost money since 1994, when Orange County, Calif., went bankrupt. A number of money-market funds own securities issued by AIG. The firm is also a big insurer of some money-market instruments." -By Matthew Karnitschnig, Deborah Solomon, Liam Pleven and Jon E. Hilsenrath with contributions by Diya Gullapalli, Serena Ng, Damian Paletta and Ashby Jones

-WSJ.com

20080915

Federal

Law

Politics

History

"Wall Street crisis is culmination of 28 years of deregulation." ... "On Monday, one Wall Street bank, Lehman Brothers, filed for bankruptcy protection and another, Merrill Lynch, sought comfort by selling itself to Bank of America for $50 billion. Earlier this year, the government helped enable the sale of faltering investment bank Bear Stearns to J.P. Morgan Chase, and more recently took over mortgage giants Fannie Mae and Freddie Mac." ... "Such troubles were supposed to have been prevented, or at least mitigated, by regulatory systems that the nation began to put in place after the banking system collapsed at the start of the Great Depression." ... "Many banks at the time were badly wounded by their personal and financial ties to securities trading. The 1933 Glass-Steagall Act, and later the 195