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Bailouts

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Yahoo

In a few weeks, the Treasury Department's czar of executive pay will have to answer this $100 million question: Should Andrew J. Hall get his bonus? Mr. Hall, the 58-year-old head of Phibro, a small commodities trading firm in Westport, Conn., is due for a nine-figure payday, his cut of profits from a characteristically aggressive year of bets in the oil market. There is little doubt that Mr. Hall is owed the money under his contract. The problem is that his contract is with Citigroup, which was saved with roughly $45 billion in taxpayer aid

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WSJ

Americans are streaming back into auto showrooms, and one reason is the “cash for clunkers” subsidy. Democrats are naturally claiming this is a great success, while Republicans are claiming that because the program has run out of clunker cash so quickly, this proves government can’t run the health-care system. How do we elect these people? What the clunker policy really proves is that Americans aren’t stupid and will let some other taxpayer buy them a free lunch if given the chance. All of Washington professes to be surprised that the $1 billion allocated to the subsidy has been used up so quickly, but giving away money is one thing government knows how to do. The Clunkers who are in Congress are now patting themselves on the back for their great success, and the House quickly voted to pass out another $2 billion in clunker coupons. With a $1.8 trillion budget deficit, who’s going to notice this pocket change? Clearly, we spoilsports need an attitude adjustment to Washington’s ne

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New York Post

Eleven months into the massive, $182.5 billion taxpayer bailout of ailing insurance giant AIG, the company appears to be foundering in a stormy sea of bungled deals, consultants run amok and a lack of senior management. Stymied in its attempts to gain information on how taxpayer money is being spent, Congress is expected to send a team of investigators to AIG's New York offices tomorrow to begin a probe into the most costly corporate tragedy in American history. The company has failed to disclose its spending since September on more than 3,000 consultants who have produced 53.6 million pages of documents pertaining to AIG's accounting alone

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CNN

Guaranty Bank is hardly a household name. But the Austin, Texas-based thrift's looming failure is shaping up as a big headache for bank supervisors -- not to mention a black eye for Carl Icahn and others in the smart money set. Guaranty (GFG) could be soon seized by the government in what would be the biggest bank failure in a year that has already had 64 of them. Last week, the bank warned investors to expect a federal takeover after regulators forced a writedown of its risky mortgage investments and a bid to raise new capital failed.

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CNBC

The dozens of insurance companies that make up the American International Group show signs of considerable weakness even after their corporate parent got the biggest bailout in history, a review of state regulatory filings shows. Over time, the weaknesses could mean trouble for AIG’s [AIG 13.0198 -0.1102 (-0.84%) ] policyholders, and they raise difficult questions for regulators, who normally step in when an insurer gets into trouble. State commissioners are supposed to keep insurers from writing new policies if there is any doubt that they can cover their claims. But in AIG’s case, regulators are eager for the insurers to keep writing new business, because they see it as the best hope of paying back taxpayers.

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Reuters

One of the many mysteries swirling around high-frequency trading is just how profitable the lightning-fast buying and selling of stocks, options and commodities really is. Most prefer to say simply nothing on the subject, leaving us in a very dark pool on the issue of high-frequency profits. To be fair, Goldman Sachs (GS.N) recently came out and said "even using the broadest definition, high-frequency shares trading accounted for less than one percent of Goldman Sachs' total revenue in the first half of 2009." But Goldman is talking only about high-frequency trading of stocks, not options and commodities. In options trading alone, Goldman's algorithmic-driven platform is estimated by a market source to account for 15 percent of the daily trading volume.

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The Business Insider

Andrew Cuomo has once again turned the bright glare on Wall Street bonuses, giving everyone a fresh chance to jeer and offer their ideas about how compensation will be reformed. But the obsession with bonuses is a big distraction whichever side you're on. If there's something to be enraged about, it's not the bonuses, it's the profits in the banking sector. Because shareholders of companies like JPMorgan (JPM) and Goldman Sachs (GS) are perfectly happy fattening up their big earners.

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Breitbart

A senior House Democrat threatened banks if they don't volunteer to save more homeowners from foreclosure, Congress will make them. Rep. Barney Frank said Congress will revive legislation that would let bankruptcy judges write down a person's monthly mortgage payment if the number of loan modifications remain low. Frank, chairman of the House Financial Services Committee, also said his committee won't consider legislation to help banks lend unless there is a "significant increase" in mortgage modifications.

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MSN Money

Citigroup (C) is considering paying a $100 million bonus -- to one guy. This is the same Citigroup that received $45 billion in bailout money. The same Citigroup that will soon be 34% owned by the U.S. government. The same Citigroup that has lost 95% of its share value since 2007.

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Washington Post

General Electric, the world's largest industrial company, has quietly become the biggest beneficiary of one of the government's key rescue programs for banks. At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government. The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.

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Just a Girl in Short Shorts

There are still a few people who refuse to become victims of the current wave of government kleptomania--namely the governor and treasurer of Indiana, who on behalf of the teachers and police officers pension funds, are challenging the Obama administration's bullying in the Chrysler bankruptcy. The Second Circuit has stayed the sale of Chrysler and will hold a hearing Friday morning

CrytoHippie