6 posts tagged with economy by ornate insect.
Displaying 1 through 6 of 6.
Although the government has committed almost 3 trillion dollars to rescuing the financial sector, testimony today revealed that 6 months after the start of TARP, basic oversight of the program is lacking (more here and here), including the failure to account for almost 80 billion dollars. Meanwhile, Congress wants to know more about the court-appointed AIG monitor, while Neal Wolin, who helped draft Gramm-Leach-Bliley, has replaced a former hedge fund manager to run TARP--raising more questions about who is overseeing the plans, and about how they are being administered.
Is the Obama administration, in its handling of the ongoing banking crisis, dithering while Rome burns? Is it perpetuating the problem by encouraging private investors to finance its rescue plan? (quote: Term Asset-Backed Securities Loan Facility, or TALF, has been welcomed by a range of hedge funds and private-equity firms as well as some lenders who issue assets that finance consumer loans.) While hedge funds and others are preparing to make money on the downturn, we still don't have a handle on where all the AIG money is going (and forget that four years ago, AIG was being outed as the new Enron), and despite calls for more transparency in the "bailout" process, the Fed has not been forthcoming in revealing how the money is being spent.
So how's the economy doing? Everyone, even google's CEO, seems to acknowledge it's bleak. Of course, panic would not be good, but a glance at the headlines reveals that one in five mortgages are underwater--prompting yet more federal relief--while the FDIC's insurance fund is threatened by further bank insolvency, and the U.S. private sector hemorrhaged nearly 700,000 jobs in February. New revelations about the banking crisis show that as Merrill Lynch foundered, its top 10 earners made $209 million last year, and that some of the companies that caused the mortgage crisis are now benefitting from it. At a time when 87 million Americans can't afford health insurance, and prison spending outpaces all but Medicaid; when we still don't know where exactly $2.2 trillion in bank loans have gone, some analysts are nevertheless cautiously optimistic. One sign of progress is that Obama is taking on the kinds of costly and wasteful U.S. defense contracts that the previous administration let run amok. If he can take on that racket, and make a dent, there may be hope after all.
Remember the stink a few weeks back that caused Wells Fargo to cancel their Las Vegas party? Well, it appears that last week Northern Trust, a bank that received $1.6 billion dollars in federal money, held a series of lavish parties in L.A., complete with performances by Sheryl Crow, Earth-Wind-and-Fire, and others (more here and here). [more inside]
America's for sale. Just ask Treasury Secretary Henry Paulson. With the U.S. economy in shambles, Paulson just spent four days touring the Middle East, hat in hand, looking for investors to bail us out. Specifically, on Monday, Paulson met with heads of the Abu Dhabi Investment Authority, the world's largest "sovereign wealth fund" with roughly $875 billion in assets, and encouraged them to buy American businesses. Mortgaging America by Eric J. Weiner (LA Times Op Ed) [more inside]