(Reuters) - U.S. government officials seeking to revamp the financial bailout have discussed spending another $1 trillion (709 billion pounds) to $2 trillion to help restore banks to health, the Wall Street Journal said, citing people familiar with the matter.
The paper said the Barack Obama administration could announce its plans within days but has not yet determined the final shape of its new proposal, and the exact details could change.
The administration is also seeking more effective ways to pump money into banks, and is considering buying common shares in the banks, according to the paper.
New U.S. bank bailout could cost up to $2 trillion
Thursday, January 29, 2009
Friday, January 23, 2009
UK bank shares plummet despite new bailout plan
LONDON, England (CNN) -- Shares in UK banks continued to fall Monday, despite new plans announced by the government to help financial institutions affected by the global financial crisis -- only months after a previous multi-billion-dollar bailout.
Royal Bank of Scotland -- which earlier Monday posted a UK corporate record loss of up to £28 billion ($41.5 billion) last year -- saw its shares plummet by 68 percent by 1620 GMT.
Other shares also hit included Lloyds, which dropped 32 per cent; HSBC, down by 11 percent; and Barclays, which lost around a quarter of its value Friday -- a drop of 16 percent.
The new UK program, which the government calls the Asset Protection Scheme, "is designed to protect financial institutions against exposure to exceptional future credit losses on certain portfolios of assets," the Treasury said in a statement -- in other words remove or limit the toxic debt which has created much of the financial crisis.
UK bank shares plummet despite new bailout plan
We are not alone in this hysteria. The rest of the world also loves our "Throw good money at bad investments" plan.
When inflation hits us next we can always stabilize the cost of food. Isn't that what the Russians did. Hush, bad boy.
Royal Bank of Scotland -- which earlier Monday posted a UK corporate record loss of up to £28 billion ($41.5 billion) last year -- saw its shares plummet by 68 percent by 1620 GMT.
Other shares also hit included Lloyds, which dropped 32 per cent; HSBC, down by 11 percent; and Barclays, which lost around a quarter of its value Friday -- a drop of 16 percent.
The new UK program, which the government calls the Asset Protection Scheme, "is designed to protect financial institutions against exposure to exceptional future credit losses on certain portfolios of assets," the Treasury said in a statement -- in other words remove or limit the toxic debt which has created much of the financial crisis.
UK bank shares plummet despite new bailout plan
We are not alone in this hysteria. The rest of the world also loves our "Throw good money at bad investments" plan.
When inflation hits us next we can always stabilize the cost of food. Isn't that what the Russians did. Hush, bad boy.
Some bailout recipients upped lobby spending in 4Q
WASHINGTON (AP) — Some big banks and an automaker increased the amount they spent to lobby the government late last year even as they received billions from the $700 billion financial rescue program.
The action raises questions about the propriety of big companies getting taxpayer support at the same time they're pressing the government for legislative and regulatory help.
"There's a smell to companies that are on the government dole lobbying for more money and lobbying for less oversight," said Ed Mierzwinski, consumer program director at Public Interest Research Group. "Nobody knows what they're doing with the (government) money, but we know that they're hiring lobbyists to get more money."
Companies that have received the most bailout funds, including Citigroup Inc. and Bank of America Corp., are not specifying how much they spent on lobbying on the rescue program. They insist that no bailout money was used for lobbying.
Some bailout recipients upped lobby spending in 4Q
This had to happen eventually. Lobbying for a bailout has really high return on investment. No business can say no to that.
The action raises questions about the propriety of big companies getting taxpayer support at the same time they're pressing the government for legislative and regulatory help.
"There's a smell to companies that are on the government dole lobbying for more money and lobbying for less oversight," said Ed Mierzwinski, consumer program director at Public Interest Research Group. "Nobody knows what they're doing with the (government) money, but we know that they're hiring lobbyists to get more money."
Companies that have received the most bailout funds, including Citigroup Inc. and Bank of America Corp., are not specifying how much they spent on lobbying on the rescue program. They insist that no bailout money was used for lobbying.
Some bailout recipients upped lobby spending in 4Q
This had to happen eventually. Lobbying for a bailout has really high return on investment. No business can say no to that.
Wednesday, November 26, 2008
Interesting Timeline (from AP)
_March 11: The Federal Reserve announces a rescue package to provide up to $200 billion in loans to banks and investment houses and let them put up risky mortgage-backed securities as collateral.
_March 16: The Fed provides a $29 billion loan to JPMorgan Chase & Co. as part of its purchase of investment bank Bear Stearns.
_May 2: The Fed increases the size of its loans to banks and lets them put up less-secure collateral.
_July 11: Federal regulators seize Pasadena, Calif.-based IndyMac, costing the Federal Deposit Insurance Corp. billions to compensate deposit-holders.
_July 30: President Bush signs a housing bill including $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners.
_Sept. 7: The Treasury takes over mortgage giants Fannie Mae and Freddie Mac, putting them into a conservatorship and pledging up to $200 billion to back their assets.
_Sept. 16: The Fed injects $85 billion into the failing American International Group, one of the world's largest insurance companies.
_Sept. 16: The Fed pumps $70 billion more into the nation's financial system to help ease credit stresses.
_Sept. 19: The Treasury temporarily guarantees money market funds against losses up to $50 billion.
_Sept. 29: The Fed makes an extra $330 billion available to other central banks, boosting to $620 billion the amount available to the Fed through currency "swap" arrangements, where dollars are traded for foreign currencies. It also triples to $225 billion the amount available for short-term loans to U.S. financial institutions.
_Oct. 3: President Bush signs the $700 billion economic bailout package. Treasury Secretary Henry Paulson says the money will be used to buy distressed mortgage-related securities from banks.
_Oct. 6: The Fed increases a short-term loan program, saying it is boosting short-term lending to banks to $150 billion. It says that by year's end, $900 billion in potential overall credit will be outstanding. It also says it will begin paying interest on reserves that banks keep with the Fed in hopes of coaxing banks into keeping more money on deposit at the central bank.
_Oct. 7: The Fed says it will start buying unsecured short-term debt, so-called "commercial paper," from companies, and says that up to $1.3 trillion of the debt may qualify for the program.
_Oct. 8: The Fed cuts its benchmark interest rate a half percentage point, to 1.5 percent. It follows a one-quarter point cut on April 30 and a three-quarter-point reduction on March 18.
_Oct. 8: The Fed agrees to lend AIG $37.8 billion more, bringing total to about $123 billion.
_Oct. 14: The Treasury says it will use $250 billion of the $700 billion bailout to inject capital into the banks, with $125 billion provided to nine of the largest: Bank of America Corp., which received $15 billion; Bank of New York Mellon Corp., $3 billion; Citigroup Inc., $25 billion; Goldman Sachs Group Inc., $10 billion; JPMorgan Chase & Co., $25 billion; Merrill Lynch & Co. Inc., $10 billion; Morgan Stanley, $10 billion; State Street Corp., $2 billion; and Wells Fargo & Co., $25 billion. The $10 billion for Merrill has been deferred until its purchase by Bank of America closes.
_Oct. 14: The FDIC says it will temporarily guarantee up to a total of $1.4 trillion in loans between banks.
_Oct. 21: The Fed says it will provide up to $540 billion in financing to provide liquidity for money market mutual funds.
_Oct. 29: The Fed cuts its benchmark interest rate to 1 percent, matching the low point reached in 2003. The rate hasn't been lower since 1958.
_Nov. 10: The Treasury and Fed replace the two previous loans provided to AIG with a new $150 billion aid package that includes an infusion of $40 billion from the government's bailout fund.
_Nov. 12: Paulson says the government will no longer buy distressed mortgage-related assets, formerly the centerpiece of the bailout, and instead will concentrate on injecting capital into banks.
_Nov. 17: Treasury says it has provided $33.6 billion in capital to another 21 banks, with the largest stake being $6.6 billion to Minneapolis, Minn.-based U.S. Bancorp. So far, the government has invested $158.6 billion in 30 banks.
_Nov. 23: The Treasury says it will invest another $20 billion in Citigroup Inc., on top of $25 billion provided Oct. 14. The Treasury, Fed and FDIC also pledge to backstop large losses Citigroup might absorb on $306 billion in real estate-related assets.
_March 16: The Fed provides a $29 billion loan to JPMorgan Chase & Co. as part of its purchase of investment bank Bear Stearns.
_May 2: The Fed increases the size of its loans to banks and lets them put up less-secure collateral.
_July 11: Federal regulators seize Pasadena, Calif.-based IndyMac, costing the Federal Deposit Insurance Corp. billions to compensate deposit-holders.
_July 30: President Bush signs a housing bill including $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners.
_Sept. 7: The Treasury takes over mortgage giants Fannie Mae and Freddie Mac, putting them into a conservatorship and pledging up to $200 billion to back their assets.
_Sept. 16: The Fed injects $85 billion into the failing American International Group, one of the world's largest insurance companies.
_Sept. 16: The Fed pumps $70 billion more into the nation's financial system to help ease credit stresses.
_Sept. 19: The Treasury temporarily guarantees money market funds against losses up to $50 billion.
_Sept. 29: The Fed makes an extra $330 billion available to other central banks, boosting to $620 billion the amount available to the Fed through currency "swap" arrangements, where dollars are traded for foreign currencies. It also triples to $225 billion the amount available for short-term loans to U.S. financial institutions.
_Oct. 3: President Bush signs the $700 billion economic bailout package. Treasury Secretary Henry Paulson says the money will be used to buy distressed mortgage-related securities from banks.
_Oct. 6: The Fed increases a short-term loan program, saying it is boosting short-term lending to banks to $150 billion. It says that by year's end, $900 billion in potential overall credit will be outstanding. It also says it will begin paying interest on reserves that banks keep with the Fed in hopes of coaxing banks into keeping more money on deposit at the central bank.
_Oct. 7: The Fed says it will start buying unsecured short-term debt, so-called "commercial paper," from companies, and says that up to $1.3 trillion of the debt may qualify for the program.
_Oct. 8: The Fed cuts its benchmark interest rate a half percentage point, to 1.5 percent. It follows a one-quarter point cut on April 30 and a three-quarter-point reduction on March 18.
_Oct. 8: The Fed agrees to lend AIG $37.8 billion more, bringing total to about $123 billion.
_Oct. 14: The Treasury says it will use $250 billion of the $700 billion bailout to inject capital into the banks, with $125 billion provided to nine of the largest: Bank of America Corp., which received $15 billion; Bank of New York Mellon Corp., $3 billion; Citigroup Inc., $25 billion; Goldman Sachs Group Inc., $10 billion; JPMorgan Chase & Co., $25 billion; Merrill Lynch & Co. Inc., $10 billion; Morgan Stanley, $10 billion; State Street Corp., $2 billion; and Wells Fargo & Co., $25 billion. The $10 billion for Merrill has been deferred until its purchase by Bank of America closes.
_Oct. 14: The FDIC says it will temporarily guarantee up to a total of $1.4 trillion in loans between banks.
_Oct. 21: The Fed says it will provide up to $540 billion in financing to provide liquidity for money market mutual funds.
_Oct. 29: The Fed cuts its benchmark interest rate to 1 percent, matching the low point reached in 2003. The rate hasn't been lower since 1958.
_Nov. 10: The Treasury and Fed replace the two previous loans provided to AIG with a new $150 billion aid package that includes an infusion of $40 billion from the government's bailout fund.
_Nov. 12: Paulson says the government will no longer buy distressed mortgage-related assets, formerly the centerpiece of the bailout, and instead will concentrate on injecting capital into banks.
_Nov. 17: Treasury says it has provided $33.6 billion in capital to another 21 banks, with the largest stake being $6.6 billion to Minneapolis, Minn.-based U.S. Bancorp. So far, the government has invested $158.6 billion in 30 banks.
_Nov. 23: The Treasury says it will invest another $20 billion in Citigroup Inc., on top of $25 billion provided Oct. 14. The Treasury, Fed and FDIC also pledge to backstop large losses Citigroup might absorb on $306 billion in real estate-related assets.
Gov't announces another $800B in bailout plans
WASHINGTON (AP) — The government's commitments to contain the financial crisis now approach $7 trillion.
That figure includes funds to guarantee certain corporate assets and debts, although those funds may never actually be spent. Still, the overall figure reflects the huge liabilities the government is taking on to battle the meltdown.
Among the government efforts announced Tuesday are plans to buy up to $600 billion in mortgage-related assets and up to $200 billion in loans for holders of securities backed by various types of consumer debt.
The new plans are the latest in a long list of government moves:
That figure includes funds to guarantee certain corporate assets and debts, although those funds may never actually be spent. Still, the overall figure reflects the huge liabilities the government is taking on to battle the meltdown.
Among the government efforts announced Tuesday are plans to buy up to $600 billion in mortgage-related assets and up to $200 billion in loans for holders of securities backed by various types of consumer debt.
The new plans are the latest in a long list of government moves:
GM and Ford shares jump on bailout outlook
DETROIT (Reuters) - Shares of General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) jumped on Wednesday after Deutsche Bank said chances have improved for the struggling automakers to receive a government bailout.
"There is growing concern about the risks to the U.S. economy that would be derived from inaction," Deutsche Bank analyst Rod Lache said in a research note.
"The proximity of these bailout hearings to the Citigroup (C.N: Quote, Profile, Research, Stock Buzz) bailout may have also tipped the scales somewhat," Lache said, referring to the massive government rescue of the bank announced Sunday.
M and Ford shares jump on bailout outlook
"There is growing concern about the risks to the U.S. economy that would be derived from inaction," Deutsche Bank analyst Rod Lache said in a research note.
"The proximity of these bailout hearings to the Citigroup (C.N: Quote, Profile, Research, Stock Buzz) bailout may have also tipped the scales somewhat," Lache said, referring to the massive government rescue of the bank announced Sunday.
M and Ford shares jump on bailout outlook
Thursday, November 20, 2008
Cities wrestle with economic bailout request
Associated Press Writer= SAN FRANCISCO (AP) - As three major U.S. cities asked the federal government for a slice of the $700 billion bailout plan, other cities were considering whether that was the right move for them.
Illustrating the complexity of the situation, San Jose Mayor Chuck Reed told The Associated Press early Friday he planned to request 2 percent or $14 billion of the federal government's bailout package to pay for mass transit improvements and expansion of the area's clean-technology businesses.
Hours later, the mayor issued a statement saying he would not ask for any of that money, unlike Philadelphia, Atlanta and Phoenix.
"I do not plan to ask Treasury Secretary Henry Paulson for TARP bailout funds for San Jose at this point in time," Reed said. "However, if TARP funds become available to cities, I will work to ensure that San Jose is allotted its fair share."
Reed said San Jose needed federal money to complete funding for the extension of the Bay Area Rapid Transit line, or BART, and to expand the area's clean technology businesses, which, he said, could produce 5,000 jobs. He also said the money could be used to fund "long-neglected infrastructure."
Illustrating the complexity of the situation, San Jose Mayor Chuck Reed told The Associated Press early Friday he planned to request 2 percent or $14 billion of the federal government's bailout package to pay for mass transit improvements and expansion of the area's clean-technology businesses.
Hours later, the mayor issued a statement saying he would not ask for any of that money, unlike Philadelphia, Atlanta and Phoenix.
"I do not plan to ask Treasury Secretary Henry Paulson for TARP bailout funds for San Jose at this point in time," Reed said. "However, if TARP funds become available to cities, I will work to ensure that San Jose is allotted its fair share."
Reed said San Jose needed federal money to complete funding for the extension of the Bay Area Rapid Transit line, or BART, and to expand the area's clean technology businesses, which, he said, could produce 5,000 jobs. He also said the money could be used to fund "long-neglected infrastructure."
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