Last week I was watching Lou Dobbs while scrubbing my dentures and complaining about joint pain (two of those things are true, sadly), and I saw a segment on Ohio congresswoman Marcy Kaptur, who is encouraging homeowners to stay put in their foreclosed houses. She argues that many of the loans made during the subprime fiasco may not be legit, and that you should seek legal counseling and demand a mortgage audit from the bank before leaving. Kaptur admits her advice doesn’t trump the sheriff knocking at your door with an eviction notice, but a real estate lawyer told the Toledo Blade that otherwise she has a point.
With $45 billion in taxpayer funds burning a hole in its pocket, Citigroup is purchasing a $50 million Dassault Falcon 7X, according to the New York Post. Apparently none of the existing jets that ferried execs to Washington to ask for bailout funds was ironic enough.
Vikram Pandit, CEO of Citigroup, announced today that the company would be split after reporting a net loss for 2008 of $18.72 billion. He also promised to put the money from the $700 bailout to work by extending credit to consumers and businesses… responsibly.
Federal Reserve chairman Ben Bernanke said that the $800 billion stimulus plan being discussed by the new administration might “provide a significant boost to economic activity,” but that it wouldn’t work without more bank bailouts.
A study by the Associated Press says that executives at bailed out banks got $1.6 billion in salaries, bonuses, and other benefits — including cars, personal use of company jets, and country club memberships.
President Bush has approved a $17.4 billion auto bailout, with $13.4 billion in emergency loans to prevent the collapse of GM and Chrysler and another $4 billion to be handed out in February.
Friday will be the last day of production as Chrysler shuts down for 30 days — citing lack of available consumer credit.
The fall of AIG is old news, but we had to laugh at this ad from the October issue of Money magazine sent in by reader Tom.
Here’s a sad bit of news, investors are so shaken that they’re willing to put their money into Treasury bills — even if it means losing money.
We know the credit markets remain seized: late on Black Friday when no one was listening, the Federal Reserve issued a statement that its emergency lending to banks had increased over the prior week. Thus, massive amounts of money continue to flow to large financial institutions in an effort to stimulate economic activity, but by all appearances the money is not flowing into the broader economy. Quite the contrary; as the Fed lowers rates and adds record amounts of loaned cash to bank balance sheets, big banks are actually increasing consumers’ cost of borrowing and reducing their lines of credit. Witness Citibank’s recent adverse actions against cardholders.
A majority, 61% of Americans are not in favor of bailing out the auto industry, says CNN/Opinion Research Corp. poll. Ford, Chrysler and GM have requested up to $34 billion dollars in emergency loans, but a majority of Americans polled thought that bailing out the automakers wouldn’t help the economy.
GM desperately wants an invite to the bailout party — and has submitted a request for $12 billion dollars. In return, GM will attempt to return to profitability by “explor[ing] alternatives for the Saturn brand,” as well as cutting “product offerings” at Pontiac.
It’s apparently not entirely self-evident that when your company needs a taxpayer bailout you shouldn’t get a “bonus,” so money-sucking insurer AIG has written a letter to NY Attorney General Andrew Cuomo promising that their top executives will not get bonuses this year.
Today the Federal Reserve announced the creation of a new special purpose entity that will buy consumer and business debt. Under the new plan, the Treasury will provide $20 billion dollars in of credit protection (from the Troubled Asset Relief Program) — and will absorb most of the losses, should they occur.
ABCNews says that the big three auto CEOs “flew to the nation’s capital yesterday in private luxurious jets to make their case to Washington that the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy.”
Consumerist reader Darkrose writes, “I just got this in my e-mail. Thought you guys might be interested in it.” In the email, GM’s president Troy Clarke is in high PR mode, pointing out the grave consequences and emphasizing that GM wants not “a bailout but rather a loan that will be repaid.” We thought other readers who aren’t GM customers would find it interesting.