Hey, bank CEOs! Need “exceptional” help from the U.S. Government? Get ready to be fired. Treasury Secretary Tim Geithner told “Face the Nation” that he was open to firing bank CEOs in much the same way that GM chief Rick Wagoner was recently shown the door.
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]
The Washington Post is reporting that Treasury Secretary Timothy Geithner will testify before the House Financial Services Committee today and argue that his agency needs broad powers to seize companies and “wind them down” without allowing them to enter bankruptcy.
Markets jumped after the Treasury presented the fleshed-out details of its plan to buy troubled bank assets. The need for getting toxic assets off bank books has been around for quite some time, but has stalled because banks and investors couldn’t compromise on the price. Banks didn’t want to sell for less than 60 cents on the dollar, investors didn’t want to pay more than 30. The Treasury plan makes the two ends meet by providing $75-$100 billion in financing for buyers. For it to work, private investors will have to step up, but with the S&P leaping up 7.1% the street is betting they will and it will unclog the credit markets.
President Obama and Treasury Secretary Tim Geithner have announced a $500,000 maximum wage for employees of companies that receive taxpayer support. The rule will only apply to companies that receive future bailout funds. Oh, also, you’re going to be bailing out more companies.
The Washington Post says that the Treasury Department and the FDIC are considering a plan to guarantee millions of mortgages. According to the WaPo, the plan under consideration would encourage lenders to reduce borrowers monthly payments based on the homeowner’s ability to pay. To attract lenders into the program, the government would guarantee to repay the lender for a portion of its loss if the borrower defaulted on the reconfigured loan.
The Treasury Department is expected to announce that it will be pumping $250 billion into banks both large and small tomorrow… and the FDIC is expected to offer an unlimited guarantee on bank deposits in accounts that do not bear interest.
A while back the New York Times was concerned about the cost of the Iraq War and published some estimates of what else we could have bought with that money. We didn’t find that very interesting at the time, but now, while trying to wrap our minds around just how effing huge the $700 billion proposed bailout of Wall Street really is, we decided to revisit that article. Here’s what you can buy for less than $700 billion, according to the New York Times.
The SEC has temporarily banned short selling of 799 financial stocks, and the Treasury Department has said that it would guarantee (temporarily?) money market funds up to the amount of $50 billion. The New York Times called this move “startling” because money market funds have long been considered one of the safest investments — about as safe as a savings account.
This Sunday the Bush administration asked Congress to approve a “rescue package” that would give officials the ability to inject “billions of federal dollars” into Freddie Mac and Fannie Mae. The Federal Reserve also announced that it would make its short-term lending programs available to Freddie and Fannie, said the NYT.
Treasury Secretary Henry Paulson hates the penny because it is a worthless dingleberry of a coin. In an interview sure to have kids thinking they know enough to run the Mint, Paulson simplistically noted: “The penny is worth less than any other currency.” Don’t sing the penny’s swan song just yet.
…he quickly added that he didn’t think it was “politically doable” to eliminate the one-cent coin and it wasn’t something he planned to tackle in the final year of the Bush administration.
Great, add the penny to the slate of issues over which the parties disagree. Put it right next to war spending and social security.
When we posted about “30 Rock” last Friday, a reader SHOUTED IN ALL CAPS that someone—either NBC, or Tina Fey, or maybe The Consumerist, we’re not sure—is a government shill for basically being paid by the gov to write about financial advice. Turns out Mr. Shouty is right, sort of: the U.S. Treasurer, Anna Escobedo Cabral, was on the radio news program “Marketplace” a couple of weeks ago to talk about how she’s been meeting with the creative teams of soap operas and telenovelas to find ways to incorporate financial storylines into their plots.
You’ll never ever ever get that cool G refund from the telephone company, but here’s one refund you can count on: an obsolete long-distance tax that telephone customers have been paying for 108 years has finally been revoked by the US Treasury.