Several banks are doing just what they’re always bugging customers to do — paying back money that was lent to them.
It’s not just monolithic corporations, financial institutions, state governments and the like that are benefiting from bailout funds. Scam artists stand to make a killing also, the FBI says:
Want to see the top 10 biggest bankruptcies in U.S. history so far? [Fortune]
After failing to get its debt-for-stock offer approved last week, and missing the June 1st deadline for concessions from creditors and its union, GM will file for bankruptcy later today. Reuters notes that its filing will be the third-largest in U.S. history, after Lehman Bros and Washington Mutual, and the largest ever in manufacturing.
…The Public-Private Investment Program provides subsidies to private investors to encourage them to buy legacy loans from banks. The goal is to encourage buyers to bid more than they are currently willing to pay, and hopefully close the gap with the prices at which the banks are willing to sell.
Let’s say the U.S. has poured billions of dollars into a failing company. How strongly should it try to protect that money once the company files for bankruptcy? The Washington Post is reporting that the plan for GM—which may go belly up as early as Monday—is for federal officials to select 5 or 6 of the company’s new board members, and have a say over which 6 of the existing board will remain. The UAW gets to choose another, and Canada might possibly be given one slot to fill. The rest of us will probably just get t-shirts or a souvenir mug.
While we were concentrating on other things (Snuggie testing, for example), there has apparently been something of a backlash going on against NPR’s Planet Money podcast for its rude treatment of Congressional Oversight Panel Chair Elizabeth Warren. NPR’s Adam Davidson has since expressed regret that he talked over Ms. Warren in a rude way — but despite the mea culpa, a series of links about the issue has popped up in our inbox more than a week later.
The NYT DealBook Blog says that AIG’s $1 interim CEO is living pretty well, despite the whole “being hated for something you didn’t do” thing.
It now seems much more likely that Chrysler will avoid bankruptcy. BusinessWeek says that Chrysler and the US Treasury have reached a deal with the banks and private equity firms that hold Chysler’s debt.
New York Attorney General Andrew Cuomo’s office is at it again. They’ve been investigating the circumstances that led to the merger of Bank of America and Merrill Lynch and the subsequent bonus payments to executives. In a letter to Senator Chris Dodd (D-CT), chairman of the Senate Banking Committee, Cuomo quotes Bank of America CEO Ken Lewis as saying that former Treasury Secretary Hank Paulson threatened him with removal from his position and mass firing of the board and senior management if he didn’t allow the merger to go through.
With a week to go before the deadline runs out on Chrysler’s bailout — it’s looking less and less likely that the automaker will be saved from liquidation.
General Motors is projected to default on its next bond payment—the last before the June 1st government-imposed restructuring deadline. Next freeway exit: bankruptcy.
How would you like to ride down Second Avenue in this? And where would you park it once you got to work? The P.U.M.A. (Personal Urban Mobility and Accessibility Project), recently unveiled by General Motors and Segway, can go 35 miles on one battery charge, seats two, and reaches speeds of 35mph. Whee!
The bailed-out banks have found a new way to annoy the government, according to the Congressional Oversight Panel, the body named by Congress to oversee the federal bailout. Chair of the committee and friend of the blog, Elizabeth Warren, is concerned that the same people who are subsidizing the banks are being targeted by abusive lending practices, says the Wall Street Journal
Ever wonder how the government is going to afford the bailout? Public debt. If you don’t know the difference between a T-Bill and a T-Note, this article should clear that up.
Treasury Secretary Geithner is testifying before Congress, if you are interested. [CSPAN]