This past election season was dominated by coverage of the Tea Party — and many outgoing politicians were ousted by Tea Party-backed candidates. Senator Bob Bennett (R-Utah) was among the first and most surprising of these casualties, losing to Tea Party-supported Mike Lee in Utah's Republican convention, back in May.
Under the unpopular bank bailout program, the Troubled Asset Relief Program, better known as TARP, the government invested money in struggling banks, and eventually got something in return. But the program's end got Louise Story, Wall Street and finance reporter for our partner The New York Times, thinking about whether the big banks got a better deal than the government did, when everything was said and done.
Insurance giant AIG has reached an agreement and a plan with the federal government to pay back some $70 billion given to the company in 2008 as part of the Troubled Asset Relief Program, just before their two-year deadline on October 3. Under the agreement, the Federal Reserve Bank of New York will remove it's ties to American International Group, and the Treasury will increase it's stake to 92 percent, gradually bringing the shares it owns from preferred to public to transfer the control back out of government hands. But is the public buying? Louise Story gives us the latest.
Israel's partial freeze on settlement buliding in the West Bank ended last night, and Marcus Mabry, associate national editor for The New York Times, and Charlie Herman, economics editor for The Takeaway and WNYC Radio, discuss how this will affect peace talks between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas. They'll also take a look at what's ahead this week for Bishop Eddie Long, who has been accused of trying to sexually seduce four teenage boys; President Obama's continued conversations with middle-class Americans; how China and Japan's relationship is rapidly deteriorating, and more.
After several days of successful attempts by Republicans to block the formal debate over financial reform in Washington, the debate has now begun on the Senate floor. One person who will certainly have the Obama administration’s ear as it negotiates with members of the Senate and House over the bill is Elizabeth Warren, Harvard Law professor and chair of the Congressional Oversight Panel that keeps an eye on the Troubled Asset Relief Program or TARP fund.
At companies deemed too big to fail, there's a delicate balance to be found between paying enough to retain talented staff and soothing public anger about big taxpayer bailouts. "Pay Czar" Kenneth Feinberg (he dislikes the term, but it's stuck) believes he’s getting the balance right.
Citigroup announced its earnings this morning, ending a three-quarter profit streak with a $7.6 billion loss during the final three months of 2009. This as consumers still struggled to repay loans and the bank managed to repay its government bailout money.
All this week we'll be taking a look at how fine print in the lives of consumers affects our ability to get out of debt. We kick off the series with Elizabeth Warren, chair of the Congressional Oversight Panel of the TARP. Warren discusses her role with TARP, a proposed Consumer Financial Protection Agency and how the American middle class has been slowly buried under more and more fine print.
Treasury Secretary Timothy Geithner defended his extension of TARP on Thursday, saying it will help fight foreclosures and increase lending for small businesses. But many banks have already paid back the bulk of their TARP money: Bank of America returned the entirety of its bailout funds on Wednesday, and Citigroup is playing catch-up, trying hard to get out from under government ownership by repaying $45 billion of TARP money. We speak with Andrew Ross Sorkin, chief acquisitions and mergers correspondent for The New York Times and author of "Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System - and Themselves
Our partners at The New York Times reported that profits collected from eight of the biggest bailed-out banks have fully repaid their debts to the U.S. government. Even though the $4 billion paid back still only represents a small percentage of the $700 billion the government doled out to help stabilize wobbly banks, it could point to brighter financial days on the horizon. We talk to New York Times reporter Louise Story about the significance of these quick paybacks and their impact on the economy.
Today, Goldman Sachs announced massive profits from the second quarter— $3.4 billion dollars. But as they announced the good news, they had to brace themselves to deal with some inevitable public outrage. How can Goldman avoid a public relations nightmare? The Takeaway is joined by Jonathan Bernstein, President of Bernstein Crisis Management, Inc.
"It's a choice: does Goldman Sachs want to be known as successful and arrogant about it or successful and humble? Humble is a lot smarter because their continued success is not guaranteed, and their former arrogance can come back and bite them."
—Jonathan Bernstein, professional crisis manager, on how the banking giant should behave in the face of its record profit
While much of America remains mired in a recession, Goldman Sachs is booming. The investment bank just paid back the $10 billion loan it took from the federal government last year and today Goldman is expected to announce a $2 billion dollar profit in its second quarter earnings report. How did Goldman go from bust to boom so quickly? Joining The Takeaway with their analysis are Matt Taibbi, a contributing editor to Rolling Stone, who wrote a scathing article on Goldman's practices, and Graham Bowley, a financial reporter for The New York Times. Graham's article on Goldman's expected earnings set off a market buying frenzy.
For more, read Matt Taibbi's article Inside the Great American Bubble Machine, in Rolling Stone. Also, read Graham Bowley's article, For Goldman, a Swift Return to Lofty Profits, in The New York Times.
"The entire Wall Street knows that this bank isn't going to go under because the government just isn't going to allow it."
—Matt Taibbi of Rolling Stone on the high earnings of Goldman Sachs
Report cards on the nation's 19 biggest banks will be released later today, but not all of the banks will be getting gold stars. While the results of the government-ordered stress tests are still to be released, early news of the results have been trickling out for days. The early leaks suggest that Bank of America will need $33.9 billion in additional capital. In fact, many of the banks tested need more money. But, this doesn't mean another multi-billion dollar bailout is looming. So if the additional funds don't come from the government, where will they come from? Eric Dash is following this story for our partners the New York Times and he joins The Takeaway with a report.
For more, read Eric Dash's and Louise Story's article, As Stress Tests Are Revealed, Markets Sense a Turning Point, in the New York Times.
Which banks will need more money? See our report card
Want to keep an eye on your stocks? Watch the market here.
Want to watch how the big 19 are doing in the market?
J.P. Morgan Chase & Co.
Citigroup Inc.
Bank of America Corporation
Wells Fargo & Co.
Goldman Sachs Group, Inc.
Morgan Stanley
Metlife, Inc.
PNC Financial Services
U.S. Bancorp
The Bank of New York Mellon Corporation
SunTrust Banks, Inc.
State Street Corporation
Capital One Financial Corp.
BB&T Corp.
Regions Financial Corp.
American Express Co.
Fifth Third Bancorp
Keycorp
GMAC LLC
Still want more? Here is related coverage from The Takeaway.
And here is Pro Publica's investigation into the stress tests.
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