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"While there are encouraging signs that California's economy is preparing for a comeback, the recession continues to drag state revenues down," said Controller John Chiang in a statement. He called the new figures "a major blow to a budget that is barely 10 weeks old." Even before the bad fiscal news, policymakers were bracing for a big budget deficit next year. The Department of Finance anticipates a $7.4-billion deficit in 2010-11. That's a conservative estimate, because lawsuits have tied up or reversed some planned budget cuts.

One year and a week after Congress enacted legislation creating the $700 billion “Troubled Asset Relief Program,” the Treasury Department next week is expected to launch its first initiative to buy, well, troubled assets. Odd as it may be, in the year since its creation TARP has been used for just about everything but the original purpose of buying troubled, or “toxic,” mortgages and other securities from financial institutions. Now comes word that a long-planned Treasury program to acquire assets will be ready to begin. That’s bad news. Not only is the program flawed, but the emergency that spawned it...

In France, in order to reverse the trend that, from one generation to the next, young people are less likely to read newspapers, free subscriptions (with strings) are being tried successfully. According to the World Association of Newspapers' recent report on the French government's decision to give free, one-day-a-week newspaper subscriptions to every 18- to 24-year old in the country as a way to encourage newspaper reading and civic participation, the publishers say it works, though the free giveaway is not the only factor.

Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), says that despite multiple statements on Oct. 14 of last year that these nine banks were healthy and only receiving government funds for the good of the country's economy, federal officials knew otherwise.

Reviewing September's detailed sales results in the car business carried at the Wall Street Journal, three things stick out immediately: The awful performance at General Motors -- down 45% from September 2008. Chrysler's even worse performance -- down "only" 42% from September 2008, but a mind-boggling 61% from September 2007 (62,197 in 2009, 156,799 in 2007) Ford's tiny decline of only 6% from a year ago, despite the end of the Cash For Clunkers program in August. No other major maker had a year-over-year September decline that was even half of that seen at GM or Chrysler. Yet the...

Warren E. Buffett is emerging as the banker of choice to the embattled blue-chip companies of American business. Mr. Buffett, the billionaire investor, announced on Wednesday that he would invest $3 billion in General Electric, the industrial giant that is also the nation’s largest nonbank financial company. The move comes eight days after he said he would invest $5 billion in Goldman Sachs.

WASHINGTON - Mitt Romney had already sent out invitations for his Phoenix fund-raiser, offering supporters the chance to meet him in a Chase Field luxury box over a $300-per-person lunch or a $3,000 VIP reception. But when former rival John McCain called with an offer to be listed as host for the event in his hometown, Romney happily went back to the printer for a new invitation with McCain’s name emblazoned on it. Yesterday, McCain’s gesture helped Romney’s political action committee raise about $80,000. It also consummated an 18-month rapprochement between two competitors who battled for the 2008 GOP presidential...

A budget analyst is critical of Congress' decision to bail out the government-run company that President Obama has held up as the model of the "public option" -- the United States Postal Service. House and Senate Appropriations Committee negotiators approved legislation last week that allows the United States Postal Service to pay only $1.4 billion of its $5.4 billion annual payment to cover retirement health benefits for its employees. Under current law, the Postal Service is required to transfer $5.4 billion to the Retiree Health Benefits Fund by Wednesday, but Postal officials say they do not have enough money to...

.... The record seems to show that capitalism cannot function without state help, and the State cannot function without private enterprise. So perhaps we can have a satisfying synthesis of the two. I am told that, via the state holding, I am an investor in certain banks. Apparently I have accidentally stumbled into ownership of one of the great global cartels. So now I say, if capitalism is such a piece of cake, then I will have a slice myself. I will turn myself into a professional asset manager. The State will be my fund manager. I give it my...

The meeting with Bank of America executives came less than a year after American taxpayers rescued the institution with a $45 billion emergency bailout. The subject was derivatives, the complex securities that helped trigger Wall Street’s crisis and drag the country to the edge of an economic abyss. The guest of honor: Barney Frank. The bankers wanted to be sure that Representative Frank, the chairman of the House Financial Services Committee, would not attempt to clamp down excessively on derivatives trading. Frank said he left the session pledging to keep in mind their “legitimate’’ concerns. “It was not lobbying politically,’’...

Not only is Fannie paper NOT full faith and credit but in addition THEY ARE EXPLICITLY DISCLAIMING AGENCY STATUS! This is on the face of EVERY Fannie (and Freddie) prospectus. All of them. So where is the authority of The Fed to buy this paper, given the constraints in Section 14? Who is The Fed bailing out by monetizing Fannie and Freddie paper when it is quite clear on the face of that prospectus and a clean read of Section 14 that they don't have the authority to buy that paper in the first place? Now do you understand why...

Inflation was limited under Bush to the destructive price increases of oil and gasoline, which were created (deliberately) by Pelosi's energy policies to destroy the US economy in 2007 through summer 2008. By destroying the US transportation sectors by limiting oil exploration and oil markets - which threatened everything that moves, feeds, ships, or eats anything else - she created the housing and bank failures that we saw in late summer 2008. And those market crashes created the economic environment that allowed the democrat news media to give Obama the win. (Coupled, of course, with McCain's stpuid campaign and Bush's...

"If you've got me," Lois Lane once asked Superman as he flew to her rescue, "Who's got you?" We could point that same perplexed question at the U.S. government and its ranks of overwhelmed financial agencies, which are now in bigger danger than the nation's banks ever were. It's no surprise that the $19 trillion stimulus spending spree would take a toll. While Wall Street is enjoying a giant, inexplicable bull-market rally on the back of seemingly infinite government support, the paint is chipping on the old house down in D.C. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben...

Democrats moved Thursday to give special relief to the financially strapped Postal Service, which would be allowed to defer $4 billion in payments due at the end of this month to cover retirement benefits for its employees. Republicans protested the bailout but made no significant effort to block the provision, which has now been attached to a stop-gap spending bill slated to come before the House and Senate in the next week. Proponents of the language argued that the House has previously endorsed equivalent relief for the Postal Service, which faces a $5.4 billion payment to the retirement fund at...

(snip) Former Massachusetts Governor Mitt Romney, a potential 2012 Republican presidential candidate, told Reuters that it was vital for Republican candidates in 2010 to "not just talk about our principles but hold true to them.""We're a party that doesn't believe in spending money we don't have. And Republicans that can show that they have been fiscally conservative will stand in stark contrast to the extraordinary deficits and forecasts of even greater deficits that are coming from the Democrats," said Romney, who ran for president last year and lost the party's nomination to John McCain. (snip)

While the Senate Judiciary Committee on Thursday takes up the issue of a federal shield law, another congressional committee in the House will be focused on the impact of the newspaper industry's financial problems. Rep. Carolyn B. Maloney (D-N.Y.), Chair of the House Joint Economic Committee (JEC), will convene a hearing "to examine contraction in the newspaper industry, the economic impact of the changing media landscape, as well as the future of the industry at large," according to an announcement. The hearing, titled "The Future of Newspapers: The Impact on the Economy and Democracy," will take place Thursday, at 10:00...

Yes, The Ticker is formally calling for a national bank boycott on Bank of America. I'm serious. And this has nothing to do with the fact that I believe they're hiding losses, that they're under investigation 7 ways from Sunday regarding the Merrill merger, or that BofA likes to bang you in the backside with usurious "overdraft fees", even though any of those standing alone is more than enough reason to run this bank into the ground. Nope. It is about this: A South Carolina Bank of America branch is drawing criticism Thursday after an employee reportedly ordered the removal...

DETROIT — The old Chrysler — the automaker’s leftover assets that remain in bankruptcy court — lost $344 million in July, and the company continues negotiating with the U.S. Treasury over a new schedule for repaying $3.3 billion in loans that are technically in default. The July loss, reported in a bankruptcy filing, was down sharply from a $10.2 billion loss reported for June. That large loss reflected the government-financed sale of the automaker’s most viable assets to Chrysler Group LLC. That new Chrysler company is owned 20 percent by Fiat, 67.7 percent by the UAW’s Voluntary Employee Beneficiary Association...

The Treasury Department drove a hard bargain but likely won't recoup taxpayers' entire investments in General Motors Co. and Chrysler Group LLC, said a report from a congressional panel overseeing government bailouts of the banking and auto sectors. The panel, though, commended the Treasury's efforts to function as a tough negotiator for structuring deals to save ailing auto makers. "They may have driven the best bargain they could, but it may not be enough," said Elizabeth Warren, a Harvard University law professor and the panel's chairwoman. The report cited remarks from Obama administration manufacturing adviser Ron Bloom, who previously ran...

Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government. Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks. The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune. A hallmark of the financial crisis has been the...

The Chicago Cubs aren't going to win anything this year despite having one of baseball's largest payrolls. But their bankrupt owner, Sam Zell's Tribune Co., may be about to hit a home run -- at your expense. Zell...is trying to unload the team in a deal that would divert almost $300 million from taxpayers to the creditors of Tribune...The proposed Cubs deal, involving a "leveraged partnership" using lots of borrowed money, is so aggressive that a leading tax expert, Robert Willens expects the IRS to challenge it... Zell, who took over Tribune in late 2007 and put it into bankruptcy...

Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government. Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks. The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune. A hallmark of the financial crisis has been the...

At the suggestion of our editor, Rich Lowry, I’ve been reviewing some correspondence leading up to National Review’s endorsement of what became known as the Troubled Asset Relief Program, TARP. I was energetically opposed to our endorsement of that action and, upon reviewing my notes from the debate, it strikes me that I may even have been intemperate in my rhetoric. I trust Mr. Lowry will have forgotten my references to his “diseased mental siftings” and my sneering at “the panicked rantings of country-club Republicans in Greenwich, Conn.” In retrospect, that seems a bit much. I was happy that he...

With the federal treasury facing insolvency what industry do we help next? Well lets see, how about the public relations arm of the Democratic party, the newspaper industry. That way when our Taxes go even higher they can tell us that it is a great idea. Today the President said that he would be happy to look at the Senate proposal allowing papers to restructure as non-profit organizations. Non-Profit may describe a newspaper's balance sheet, but it should not describe its tax status, unless of course, if Senator Benjamin Cardin( D-Md.) gets his way. The Senator introduced a bill on...

Fascinating details of last years financial bailout have emerged in a new book by a former White House insider. The Bush administration felt that the Treasury Secretary, Hank Paulson, kept changing his proposal leaving the President to demand: "You’ve got to tell me what you’re doing.”

Bailout Recipient Banks Lending Drops For Sixth Consecutive Month Submitted by Tyler Durden on 09/15/2009 19:38 -0500 It was just yesterday that Tim Geithner was lying that banks are constantly increasing lending to consumers. Well, yet another lie refuted. Banks, and not just any banks, but those receiving government bail outs and subsidies, continued constricting lending in July, with total average loan balance outstanding declining by $54 billion from $4,295 billion to $4,241 billion, a 1.3% decline, following a 1.1% decline in June. As for the reason why loan originations in July declined a whopping 10% after posting a 12.7%...

Treasury says it will wind down emergency program Treasury says it will start winding down emergency rescue program to buy time for debt ceiling By Martin Crutsinger, AP Economics Writer On Wednesday September 16, 2009, 8:19 am EDT WASHINGTON (AP) -- The Treasury Department said Wednesday it will begin winding down one of the emergency programs created at the height of the financial crisis to give the government more time before it hits the national debt limit.

WASHINGTON/NEW YORK (Reuters) - Some of the largest U.S. banks will remain caught in the government's financial bailout program for months, as officials do not expect to grant the next wave of exit approvals until near the end of the year, according to a source familiar with the matter. Banks such as Citigroup (NYSE:C - News) and Bank of America Corp (NYSE:BAC - News) have been chafing under the government's reins and want to exit the Troubled Asset Relief Program (TARP), which delivered capital infusions to banks along with limits on pay, share repurchases and dividends. *** "It is very...

The bailouts have largely stabilized the financial system, but regulatory reform is needed to prevent another similar crisis from happening again, said President Obama in a speech delivered Monday on Wall Street. Marking the anniversary of the Lehman Brothers collapse, which set off a series of events that led to last fall's financial crisis, Obama talked about the state of economy one year later. "Although I will never be satisfied while people are out of work and our financial system is weakened, we can be confident that the storms of the past two years are beginning to break," said Obama....

New York - Chrysler Financial employees traveling on business can no longer be reimbursed for lunch on trips that don't require an overnight stay. If flying on business, they must travel coach if the flight is less than four hours. Tips to baggage handlers shouldn't exceed $2 per bag. The $4 cost of an in-flight movie? Not reimbursable. The company's new expense rules, posted on its website Friday, are among a handful of policies that have been made public so far as hundreds of companies receiving federal rescue funds scramble to meet a deadline Monday to put in place policies...

Both FOIA lawsuits by Bloomberg & FoxNews to force the Federal Reserve to reveal the names of participants in its emergency lending programs are on appeal. Bloomberg won at the trial level and FoxNews lost. Link to Reuters article.

The Federal Reserve's latest (through July) G19 update is out, showing consumer credit. To say that these figures are ugly would be an understatement. In fact, there is simply no way you can spin this - while this contraction in credit has to happen it has horrifying implications if our Washington policymakers don't get on the stick and deal with the underlying issues here and now instead of pretending that everything is ok or worse, try to "borrow our way to prosperity." Let's start with the "Full Monte"; this is the "de-noised" version of The Fed's "annualized" rate of change...

"The federal government is unlikely to recoup all of the billions of dollars that it has invested in General Motors and Chrysler, according to a new congressional oversight report assessing the automakers' rescue. "

A Congressional oversight panel warns taxpayers are facing huge losses on the government’s $81 billion auto industry bailout. Elizabeth Warren, the panel’s chair, discusses the findings. * The report said that a $5.4 billion portion of the $10.5 billion owed by Chrysler is “highly unlikely” to be repaid. * Full recovery of the $50 billion sunk into GM would require the company’s stock to reach unprecedented heights. * The report also recommended that the Treasury Department provide a legal analysis justifying the use of financial rescue funds for the automakers. * In all, the government has invested $74 billion in...

Taxpayers face losses on a significant portion of the $81 billion in government aid provided to the auto industry, an oversight panel said in a report to be released Wednesday. The Congressional Oversight Panel did not provide an estimate of the projected loss in its latest monthly report on the $700 billion Troubled Asset Relief Program. But it said most of the $23 billion initially provided to General Motors Corp. and Chrysler LLC late last year is unlikely to be repaid. "I think they drove a very hard bargain," said Elizabeth Warren, the panel's chairwoman and a law professor at...

The prospect of recovering the government's assistance to GM and Chrysler is heavily dependent on shares of the two companies rising to unprecedented levels, the report said. The government owns 10 percent of Chrysler and 61 percent of GM. The shares "will have to appreciate sharply" for taxpayers to get their money back, the report said. Treasury Department officials have acknowledged that most of the $23 billion provided by the Bush administration is likely to be lost. But Meg Reilly, a department spokeswoman, said there is a "reasonably high probability of the return of most or all of the government...

(snip) McCain also spoke about the raft of national spending bills over the past year, including the $787 billion financial bailout of 2008, $700 billion for the stimulus plan and the $83 billion rescue of the auto industry. Taken with other measures, the spending would saddle the country with as much as $9 trillion of debt future generations would have to pay, the senator said. "What I'm wary about is that we're committing an act of generational theft," McCain said.(snip) He advocated for reforms of Medicare, saying the system likely would go broke within seven years if Congress and the...

Article published on Bloomberg.com(restrictions apply to quotation or copying). Here is link to article! U.S. consumer credit plunged $21.6 billion for July, which was 5 times projected by economists, and is a 10% drop in total credit. June credit plunge had originally been projected at $10.3 billion and was revised to $15.5 billion. Banks are restricting lending terms and job losses make Americans reluctant to borrow. WHOA!This HUGE contraction of credit is getting worse, not better as the liars in Washington have been saying.

The head of the committee overseeing how Uncle Sam is spending its bailout dollars offered withering criticism of the feds' handling of Citigroup's rescue, blasting regulators for their lack of transparency -- and the absence of any clear exit strategy. Noting that other companies that have received federal aid have served up proposals to pay back the money, Elizabeth Warren, chairman of the Congressional Oversight Panel, had harsh words about the lack of such a plan in the case of Citi, which has received $45 billion in rescue cash and is more than one-third owned by US taxpayers. "Too big...

On my last and final job, the new CEO on his first day wanted to change my schedule effective immediately, and let my sons find another way to get home that day. That was a telltale. His insistence on my instant obedience told me clearly that I was soon to be unemployed. I was. When I walked into Doré’s apartment in 1976, I saw a sea of stuff from where I stood in the doorway to the farthest wall—lone boots, rolls of toilet paper, stacks of magazines, dirty clothes and dishes, canned goods, a set of wrenches, a basket of...

Barack Obama said the Waxman-Markey carbon tax would help create "green energy" jobs in the U.S. He is now using taxpayer dollars to fund jobs in Spain.Barack Obama sold the Waxman-Markey "American Clean Energy and Security Act" to Congress and the American people by saying that investment in so-called "green energy" would create millions of high-wage American manufacturing jobs. We received an E-mail from the Society of Manufacturing Engineers (nonpartisan professional organization) that exposed Barack Obama as a blatant prevaricator who is shamelessly using our tax dollars to create jobs not in the United States but in foreign countries. We...

Asian stock markets pulled back Wednesday, sending Japan's benchmark down nearly 3 percent, after an overnight sell-off on Wall Street amid fears about the U.S. financial sector. Selling across the region was broad, with banks, commodity producers and exporters taking big hits. Oil prices rebounded slightly to trade just above $68 a barrel, while the dollar weakened against the yen. Investors were showing little appetite for risky assets after U.S. markets tumbled as rumors about escalating troubles in the banking sector revived concerns about the health of the financial industry and the economy as a whole. After a powerful six-month...

WASHINGTON -- The U.S. government has hauled in about $4 billion in profits from large banks that have repaid their obligations from last year's federal bailout, The New York Times reported Sunday. Critics of the bailout were concerned that the Treasury Department would never see a return on its investment. But the government has already claimed profits from eight of the biggest banks.

“Paper money eventually returns to its intrinsic value -- zero.” -- Voltaire “The Federal Reserve in collaboration with the giant banks has created the greatest financial crisis the world has ever seen. The foolish notion that unlimited amounts of money and credit created out of thin air can provide sustainable economic growth has delivered this crisis to us. Instead of economic growth and stable prices, (The Fed) has given us a system of government and finance that now threatens the world financial and political institutions. Pursuing the same policy of excessive spending, debt expansion and monetary inflation can only compound the...

I just wanted to add some color to my recent post regarding why the NYSE TRIN indicator might be broken. Reader Brian adds a very interesting perspective, indicating that he's watched TRIN and C side by side and has seen a very strong correlation. When C flips from up to down (or vice versa), there is a corresponding huge move in TRIN. This could only be the case if a stock like C comprised a large share of total NYSE volume, which indeed seems to be the case, as noted by The Big Picture blog. Above I took C, FNM,...

Companies from US, UK and Australia have the most concentrated financial power. A recent analysis of the 2007 financial markets of 48 countries has revealed that the world's finances are in the hands of just a few mutual funds, banks, and corporations. This is the first clear picture of the global concentration of financial power, and point out the worldwide financial system's vulnerability as it stood on the brink of the current economic crisis. A pair of physicists at the Swiss Federal Institute of Technology in Zurich did a physics-based analysis of the world economy as it looked in early...

Wearing flip-flops, khaki shorts and a green polo shirt, the new chief executive of bailed-out insurer American International Group Inc says he's getting a lot of work done from his massive villa overlooking the Adriatic. "People criticize me for being on vacation. I actually started work a week before I was actually supposed to," Robert Benmosche told Reuters in an interview. "I do have conference calls every day, I have all my information sent here. I can work here as well as in the office in New York." Benmosche, 65, previously the CEO of MetLife Inc, the largest U.S. life...

Boy, not me Michele! I’m not proud at all of what you and your husband have done to the American economy or the American dream. I’ve seen your hope and I’ve seen your change and for the first time in my adult life I’m scared of a White House Administration. And I’m not the only one! Nat Hentoff of the CATO Institute is scared too! According to his article, “I Am Finally Scared of a White House Administration” what he’s afraid of is the subtext and stealth of this president and his administration concerning Health Care Reform... Camille Paglia social...

The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May. “We’ve already lost 81 this year,” he told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They're smaller companies.” Failed banks tend to be smaller and private, which exacerbates the problem for small business borrowers, said Kanas, who became CEO of BankUnited when his firm bought the bank and is the former chairman and CEO of North Fork bank. “Government money has propped up the very...

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