Archive for the ‘bailout’ Category
Friday, June 12th, 2009
After repeated bailouts, GMAC Bank last month changed its name to Ally Bank. A great branding move---why wouldn't you want to deposit your money in a bank that's your ally, especially when it pays the highest interest rate in the nation on a 12-month CD?
To the right is the bank's ...
Posted in bailout, banking, FDIC, Interest Rates | 8 Comments »
Monday, June 8th, 2009
The Supreme Court is holding up the transaction with Fiat. WSJ:
The future of Chrysler LLC may be in jeopardy after the U.S. Supreme Court Monday delayed the auto maker's sale to Fiat SpA at the request of several Indiana pension funds and consumer groups opposed to the transaction.
Ahead of the ...
Posted in autos, bailout, bankruptcy | 3 Comments »
Friday, May 15th, 2009
Guaranty Financial should be included in OA's "bank death watch." With $15 billion in assets and $11.6 billion in deposits as of 12/31, Guaranty Bank would be the largest bank failure in 2009.* Reader Andrew tipped us off to their second "notification of late filing" regarding Q1 financials. Like BankUnited, ...
Posted in accounting, bailout, banking, Wall Street | 3 Comments »
Friday, May 15th, 2009
WSJ reported last night that Treasury had finally settled on bailout amounts for the large life insurers. They reported back in April that the companies had been approved to participate in TARP, but it wasn't until yesterday that actual bailout amounts were leaked.
In total, six companies---Hartford, Principal Financial, Allstate, Ameriprise, ...
Posted in bailout, insurance, stocks | 3 Comments »
Friday, May 15th, 2009
[Update: The article below has been removed from the Telegraph's site, apparently after the interview subject got cold feet about his commentary. See Zero Hedge for details.]
Ambrose Evans-Pritchard's latest column is a good one (ht Yves). He gets a money manager participating in TARP to say what everyone paying attention ...
Posted in bailout, banking, inflation, treasury, Wall Street | No Comments »
Saturday, May 9th, 2009
WSJ reports that after "intense bargaining," the Fed "significantly scaled back" its estimates for banks' capital shortfalls. Indicative of this was the unexpected change in its methodology for measuring bank capital. Instead of tangible common equity, the Fed used a less stringent measure it calls "Tier 1 Common Capital," heretofore ...
Posted in bailout, banking, Fed, leverage, politics | 7 Comments »
Friday, May 8th, 2009
The newest bank bailout facility is picking up steam, courtesy of Congress. Yesterday the Senate passed legislation that would increase FDIC's credit line on the U.S. Treasury from $30 billion to $500 billion.* Some is intended to shore up FDIC's Deposit Insurance Fund, which at the end of December had ...
Posted in bailout, FDIC | 2 Comments »
Monday, April 27th, 2009
To survive, GM needs to shrink itself to a manageable size. It's new viability plan intends to do just that. The key provision of the plan is to reduce debt, swapping 225 shares of equity for each $1,000 outstanding principal of its unsecured public notes. $27 billion of unsecured notes ...
Posted in autos, bailout, bankruptcy, debt, stocks | 6 Comments »
Sunday, April 19th, 2009
Geithner's strategy to protect bank creditors at all costs continues.
The administration knows that the banking system will need more capital to survive in its present form. The big banks are sitting on billions more of losses than can possibly be absorbed by their dwindling equity.* This implies that those further ...
Posted in bailout, banking, taxpayer issues, Wall Street | 2 Comments »
Friday, April 17th, 2009
CNN and other left wing media organizations tried to write-off the "tea party" protests as some sort of manufactured right-wing conspiracy. They totally missed the point. Sure, lots of right-wing organizations promoted the tea parties, but listen to the message. The people who attended are sick of big government period. ...
Posted in bailout, media, politics, taxpayer issues | 34 Comments »
Thursday, April 9th, 2009
The Congressional Oversight Panel released its latest report yesterday. Luckily news outlets reporting on the release (see Bloomberg and Housing Wire) are skipping Warren's YouTube and Executive summaries--awkward exercises in establishing consensus both of them. They focus instead on the report's more provocative suggestion, that liquidating failed ...
Posted in bailout, banking, leverage, treasury | 3 Comments »
Wednesday, April 8th, 2009
Insurance stocks were up big in morning trading on news Treasury will make them eligible for TARP. (WSJ)
The Treasury Department has decided to extend bailout funds to a number of struggling life-insurance companies...
The department is expected to announce the expansion of the Troubled Asset Relief Program to aid the ailing ...
Posted in bailout, insurance, treasury | No Comments »
Monday, April 6th, 2009
[Reader note: I thought it useful to add commentary around the FDIC data. Those that would prefer to skip straight to it, see the chart and read paragraphs 4-9].
Conventional wisdom says that financial companies are having trouble borrowing because credit markets are broken. This is dangerously wrong. The ...
Posted in bailout, banking, debt, FDIC, taxpayer issues | 16 Comments »
Saturday, April 4th, 2009
Below are clips of Bill Moyers' must watch interview with Bill Black, a top regulator during the S&L Scandal. Black's biography is here. At the bottom of the post are a few quotes worth highlighting...
Part 1
Part 2
Part 3
Our [financial] system...became a Ponzi scheme. Everybody was buying a pig in the ...
Posted in bailout, banking, Fed, treasury, Wall Street | 9 Comments »
Friday, April 3rd, 2009
Good to see that a major publication is highlighting conflicts of interest inherent in the Geithner plan. OA opined that while banks aren't allowed to buy their own toxic assets under the plan, there's little to stop them from colluding. Citi could buy Goldman's toxic assets in exchange for Goldman ...
Posted in bailout, FDIC, treasury, Wall Street | 5 Comments »
Friday, March 27th, 2009
The tutorial below is from Salman Khan. It walks through one reason---outlined in OA's pop quiz earlier this week---that the Geithner plan is such a disaster: because of the huge incentive it gives banks to buy their own assets in order to transfer the risk of further writedowns from themselves ...
Posted in bailout, banking | 2 Comments »
Monday, March 23rd, 2009
The stock market's positive reaction---best 10-day gain since 1938---should leave no doubt about Geithner's bank rescue plan: it's a mammoth taxpayer giveaway to investors. Or so the market believes it's going to be. Forthwith, a tutorial for those not quite clear about the mechanics of the giveaway.
(At the bottom, there's ...
Posted in bailout, banking, stocks, Wall Street | 30 Comments »
Monday, March 23rd, 2009
Here's the press release from the Treasury Dept. I've created a simple chart below to explain the plan. Click to enlarge it.
There are a few things that should be highlighted, in particular the amount of leverage being provided by government and the fact that these partnerships will be able to ...
Posted in bailout, banking, FDIC, Fed, leverage, taxpayer issues | 1 Comment »
Sunday, March 22nd, 2009
According to the NYT, the administration is considering all kinds of new rules in the wake of the AIG bonus scandal. These include tougher rules for mortgage lenders, new oversight powers for the Fed, and a new exchange/clearinghouse for derivatives trading. Most interesting in terms of intra-governmental politics, ...
Posted in bailout, banking, politics, taxpayer issues | 3 Comments »
Friday, March 20th, 2009
Matt Taibbi's latest article in Rolling Stone is one of the best and most comprehensive discussions of the AIG bailout that I've read. Taibbi even gets into the minutiae of the Fed's balance sheet in a way that won't lose readers. Well done indeed. The full article is here.
As complex ...
Posted in bailout, credit default swaps, hedge funds, leverage, taxpayer issues | 5 Comments »
Thursday, March 19th, 2009
Each week the Treasury Dept. publishes an updated list of TARP recipients in a pdf. I sent this week's list to Nick Gogerty, who arranged for all the data to be organized into an Excel spreadsheet. You can download the spreadsheet here. (Please let me know in the comments if ...
Posted in bailout, taxpayer issues | 4 Comments »
Wednesday, March 18th, 2009
Posted in bailout, debt, taxpayer issues | 2 Comments »
Sunday, March 15th, 2009
WSJ:
American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG's collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running...
"I do not like these arrangements and find ...
Posted in bailout, credit default swaps, insurance | 2 Comments »
Thursday, March 12th, 2009
OA has been following the insurance industry for a couple months now. We noted that insurance regulators are bending capital requirements, that insurers' leverage is too high to be healthy and that the protection regime meant to protect policy-holders is little more than a mirage.
The WSJ is reporting the story ...
Posted in bailout, insurance, leverage | No Comments »
Monday, March 9th, 2009
Yesterday 60 Minutes did a piece on FDIC, following agency employees as they shut down and reassured customers/employees of an Illinois Bank. It was interesting to see the team in action, but overall the piece came off as PR for Sheila Bair and her agency.
It's unseemly how Scott Pelley fawns ...
Posted in bailout, banking, FDIC | 9 Comments »
