Friday, October 3, 2008

Its a rescue plan not a bailout

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The Bailout Bill is now the Law
As Wall Street watched anxiously Friday afternoon, the nation learned exactly what the price of a few dozen votes in the House of Representatives is: about $1.2 trillion in stock market value, about $100 billion in new tax breaks and a big vote in the Senate. Oh, and also, a few wooden arrows. Congratulations -- besides some worthless mortgage-backed securities, you and every other taxpayer will also soon own about a 1/300-millionth share of the future of the domestic archery industry. Given a chance at a do-over, on a bailout bill lawmakers said was much improved from the version they shot down Monday, the House voted easily to send the legislation on to the White House for President Bush to sign. (Which he did, barely two hours after the vote ended -- probably close to a new legislative speed record.) A combination of policy shifts to make the bill a little better for Main Street (as the cliché goes) instead of Wall Street and some good old-fashioned pork (the usual grease for the legislative process, this time in the form of targeted tax credits) did the trick. So a 23-vote deficit Monday turned into a 92-vote majority by Friday. This time, leaders in both parties appeared to have done a better job counting votes; as on Monday, most Democrats backed it (172 to 63) and most Republicans opposed it (108 to 91), but the measure still passed easily, avoiding another unexpected failure, which could have crippled both the stock markets and the reelection bids of a lot of lawmakers. As it was, the Dow Jones average fell 157 points anyway.
While the initiative now shifts to the Treasury Department, armed with vast new powers to relieve stricken financial markets, Congress is launching its own, parallel oversight operation to ensure transparency and accountability in how these powers are used. It also has to meet vast new expectations on government's capacity to restore markets – and the lives of constituents – battered by the crisis. Beginning next week, Congress is also starting a series of hearings and investigations – just weeks before national elections – to identify who is to blame for the worst financial crisis since the Great Depression. Democratic lawmakers want to use them as a springboard for rapid legislation next session to reregulate financial markets.
"Those who most opposed government intervention in the economy for much of the past two decades were so successful in keeping the government away from regulating activities that should have been regulated, that the consequence is now a greater degree of intervention by the government in the economy," said Democratic Rep. Barney Frank, chairman of the House Financial Services Committee, after Friday's vote.



For now, the focus is on the Bush administration, which has three months to show that the powers it said were essential can make a difference. The new law gives the Treasury secretary other options, such as relying on insurance or loans to relieve the crisis. But over two weeks of congressional testimony and negotiations, Secretary Henry Paulson made the case that the key element in the plan is the power to buy up "troubled assets." Step One is setting up a process for buying "toxic," illiquid assets, such as mortgage-backed securities, that clogged credit markets and helped drive giant financial institutions in the US and around the world toward bankruptcy. "What we're going to see happen is the process of the auctions put into place to buy the securities from the banks. They will hire private companies to do that for them, because there isn't the capacity inside Treasury and they don't want to build one up. It can be managed by a couple of vendors," says Peter Morici, a professor at the University of Maryland School of Business and former chief economist of the US International Trade Commission.
But the process itself of sorting out assets in the new Troubled Assets Relief Program or TARP will be daunting, he adds. "Not all mortgage-backed securities have the same risk or potential default rate inside of these bonds. The real problem is telling which assets are alike so you can have a bidding process and set a price." House leaders, rebuffed on Monday by members on both sides of the aisle, needed 12 votes for victory in a revote on Friday. They easily surpassed that to win by a vote of 263 to 171. What changed is that members, swamped by calls from angry voters who opposed the rescue, this week began hearing from car dealers, small business owners, governors, and mayors who were worried about the impact of the credit crunch. "Over the last few days, a lot of members heard from Main Street businesses who are experiencing the front end of this credit crisis," says Rep. Paul Ryan (R) of Wisconsin, who says he expects to take a hit politically for his support of the bill, which is still highly unpopular with many Americans. "It's just beginning to sink in how dire this moment is.... Now, the public hasn't seen that yet." Calls from his constituents are still running 85 percent opposed, he said.
In the end, 91 Republicans voted with 172 Democrats to back the plan, up from 65 Republicans in the first vote on the plan on Monday. During the floor debate, Rep. Zoe Lofgren (D) of California said that, due to the credit crisis, "the state of California will not be able to meet payroll by the end of the month" if Congress fails to act. Democratic leaders also got more votes for the plan on Friday, thanks in part to commitments they made to black and Hispanic members that federal resources will be directed to help homeowners at risk of foreclosure. "Today was a day that I changed my mind, after talking to a considerable number of persons who indicated to me that they were having trouble with credit concerns," said Rep. Al Green (D) of Texas. Another deciding factor was assurances from Representative Frank that Democrats will "work very hard" to make sure that mortgages purchased by a reorganized Fannie Mae and Freddie Mac will be restructured so that homeowners can stay in their homes.
After signing the historic legislation on Friday, President Bush commended House leaders of both parties, "We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis across the country," he said. While most lawmakers are returning home to campaign this week, Congress could be called back into session, if necessary, as early as Monday. Meanwhile, congressional panels are gearing up for an unusual series of oversight hearings over the break, including the causes and effects of the bailout of American International Group (AIG) insurance company (next Monday) the bankruptcy of Lehman Brothers investment bank (Tuesday), the impact of the financial crisis on workers' retirement security (Tuesday), the regulation of hedge funds (Oct. 16), and the breakdown of credit-rating agencies (Oct. 22).
"The eye now is to the future: To shine the bright light of accountability on what is happening in our financial markets so that it doesn't happen again," said House Speaker Nancy Pelosi, after the vote. Upcoming committee hearings "will tell us how we got to this place and ferret out the abuses," she added. Republicans, meanwhile, are urging investigations into why Democrats over the years blocked GOP measures to curb mortgage giants Fannie Mae and Freddie Mac, now operating under a federal conservatorship.

Inside the Economic Rescue Plan: One Giant Bailout ...
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Deal Meltdown? Uncertainty on Rescue Plan - U.S. - CBN News
It's Now or Never. President Bush warned, Wednesday, that if a financial bailout is not approved now, the American people ... the nation, Bush assured that his rescue plan would not ...
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The Bush Administrations Billion Rescue Plan - Mergers, Acquisitions ...
The Bush Administration’s $700 Billion Rescue Plan September 20, 2008 ... If they do, its the government fault. 2) The bail out is not a prize for companies as they suffered from a ...
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Paulson, Senate Dems reach tentative bailout deal
... agreement on a $700 billion plan to rescue the ... work out the details, because its clear from this discussion that the details are not ... Soros floats alternative bailout plan with ...
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Bailout bill to go to House
No longer will the U.S. taxpayer bail out the recklessness ... At the center of the rescue plan are two programs designed to ... It's not a pretty option, but it's the best option."
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The Public: Backing the Bailout Bill After All?
There will be time for improving the plan as we move along. But there will be no time if we do not free up the credit ... The Bush Administration shouldn't expect action on its bailout ... House Passes $700 Billion Financial Rescue; President Has Said ...
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Source: BusinessWeek
NewsDateTime: 3 hours ago

Congress OKs historic bailout bill by big margin
... looming, Congress approved an unprecedented $700 billion government bailout ... It's not sold as giving a boost to the economy, but rather preventing a ... The core of the plan remains little changed from its inception — the Treasury Department would have ...
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Source: San Francisco Gate
NewsDateTime: 5 hours ago

Reversal of fortune: House approves $700-billion bailout bill
Lofgren said that California, with the eighth largest economy in the world, might not be able to meet its payroll ... And some Democrats argued that the rescue plan is nothing more than a bailout for the wealthy on Wall Street. If the House passes the ...
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Source: Los Angeles Times
NewsDateTime: 43 minutes ago

Local Business Owners Have Mixed Feelings About Bailout
LAKELAND | Debate over the $700 billion financial rescue package making its way ... Bush Warns of "Painful and Lasting" Damage if Bailout Not Passed ... of nearby Times Square Cafe, strongly supports the rescue plan. "I think if we don't have the bailout, we ...
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Source: The Ledger
NewsDateTime: 21 minutes ago

Historic bailout bill passes Congress; Bush signs
Let's not kid ourselves: We're in the midst of a recession. It's going to be a rough ride, but it will be a whole lot rougher ride" without the rescue plan, said Rep. ... the stock market took its largest-ever one-day dive on Monday. The plan ...
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Source: Forbes
NewsDateTime: 1 hour ago







Videos from YouTube
Title: Karl Rove Reacts to the No Vote on the Bailout!
Categories: Nancy,Bailout,News,Pelosi,Fox,Rove,News,Gibson,Karl,John,House,

Published on: 9/29/2008 5:58:47 PM
Title: Sarah Palin Talks Bailout Proposal
Categories: interview,economy,taxes,cbs,wall,globalism,healthcare,main,palin,mccain,News,sarah,street,finance,bailout,couric,katie,budget,

Published on: 9/25/2008 7:47:40 AM
Title: Congressman Ron Paul Schools Bernanke on the Bailout Plan
Categories: Price,Monetary,Wall,Bail,Constitutionality,News,Bailout,Ron,Bernanke,Street,Out,Authority,Debt,Fixing,Federal,Paul,Depression,

Published on: 9/24/2008 11:32:51 AM
Title: Palin: Bailout is about healthcare!
Categories: News,bailout,couric,news,cbs,thinkprogres,healthcare,palin,

Published on: 9/25/2008 11:25:46 AM
Title: Let's Play "WALLSTREET BAILOUT" The Rules Are... Rep Kaptur
Categories: military,economy,congress,taxcuts,gitmo,habeas,News,congresswoman,relief,mama,bush,kaptur,iraq,cheney,bill,corpus,

Published on: 9/22/2008 8:03:52 PM

The Bailout Bill :The journey begins

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The Bailout Bill is now the Law: Bush just signed it
While the initiative now shifts to the Treasury Department, armed with vast new powers to relieve stricken financial markets, Congress is launching its own, parallel oversight operation to ensure transparency and accountability in how these powers are used. It also has to meet vast new expectations on government's capacity to restore markets – and the lives of constituents – battered by the crisis. Beginning next week, Congress is also starting a series of hearings and investigations – just weeks before national elections – to identify who is to blame for the worst financial crisis since the Great Depression. Democratic lawmakers want to use them as a springboard for rapid legislation next session to reregulate financial markets.
"Those who most opposed government intervention in the economy for much of the past two decades were so successful in keeping the government away from regulating activities that should have been regulated, that the consequence is now a greater degree of intervention by the government in the economy," said Democratic Rep. Barney Frank, chairman of the House Financial Services Committee, after Friday's vote.



For now, the focus is on the Bush administration, which has three months to show that the powers it said were essential can make a difference. The new law gives the Treasury secretary other options, such as relying on insurance or loans to relieve the crisis. But over two weeks of congressional testimony and negotiations, Secretary Henry Paulson made the case that the key element in the plan is the power to buy up "troubled assets." Step One is setting up a process for buying "toxic," illiquid assets, such as mortgage-backed securities, that clogged credit markets and helped drive giant financial institutions in the US and around the world toward bankruptcy. "What we're going to see happen is the process of the auctions put into place to buy the securities from the banks. They will hire private companies to do that for them, because there isn't the capacity inside Treasury and they don't want to build one up. It can be managed by a couple of vendors," says Peter Morici, a professor at the University of Maryland School of Business and former chief economist of the US International Trade Commission.
But the process itself of sorting out assets in the new Troubled Assets Relief Program or TARP will be daunting, he adds. "Not all mortgage-backed securities have the same risk or potential default rate inside of these bonds. The real problem is telling which assets are alike so you can have a bidding process and set a price." House leaders, rebuffed on Monday by members on both sides of the aisle, needed 12 votes for victory in a revote on Friday. They easily surpassed that to win by a vote of 263 to 171. What changed is that members, swamped by calls from angry voters who opposed the rescue, this week began hearing from car dealers, small business owners, governors, and mayors who were worried about the impact of the credit crunch. "Over the last few days, a lot of members heard from Main Street businesses who are experiencing the front end of this credit crisis," says Rep. Paul Ryan (R) of Wisconsin, who says he expects to take a hit politically for his support of the bill, which is still highly unpopular with many Americans. "It's just beginning to sink in how dire this moment is.... Now, the public hasn't seen that yet." Calls from his constituents are still running 85 percent opposed, he said.
In the end, 91 Republicans voted with 172 Democrats to back the plan, up from 65 Republicans in the first vote on the plan on Monday. During the floor debate, Rep. Zoe Lofgren (D) of California said that, due to the credit crisis, "the state of California will not be able to meet payroll by the end of the month" if Congress fails to act. Democratic leaders also got more votes for the plan on Friday, thanks in part to commitments they made to black and Hispanic members that federal resources will be directed to help homeowners at risk of foreclosure. "Today was a day that I changed my mind, after talking to a considerable number of persons who indicated to me that they were having trouble with credit concerns," said Rep. Al Green (D) of Texas. Another deciding factor was assurances from Representative Frank that Democrats will "work very hard" to make sure that mortgages purchased by a reorganized Fannie Mae and Freddie Mac will be restructured so that homeowners can stay in their homes.
After signing the historic legislation on Friday, President Bush commended House leaders of both parties, "We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis across the country," he said. While most lawmakers are returning home to campaign this week, Congress could be called back into session, if necessary, as early as Monday. Meanwhile, congressional panels are gearing up for an unusual series of oversight hearings over the break, including the causes and effects of the bailout of American International Group (AIG) insurance company (next Monday) the bankruptcy of Lehman Brothers investment bank (Tuesday), the impact of the financial crisis on workers' retirement security (Tuesday), the regulation of hedge funds (Oct. 16), and the breakdown of credit-rating agencies (Oct. 22).
"The eye now is to the future: To shine the bright light of accountability on what is happening in our financial markets so that it doesn't happen again," said House Speaker Nancy Pelosi, after the vote. Upcoming committee hearings "will tell us how we got to this place and ferret out the abuses," she added. Republicans, meanwhile, are urging investigations into why Democrats over the years blocked GOP measures to curb mortgage giants Fannie Mae and Freddie Mac, now operating under a federal conservatorship.

KYW Newsradio 1060
... was talk of making it easier for financial institutions to hold questionable long-term assets, an idea embraced by some of the House Republicans who slapped down the bailout bill ...
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Stocks close nearly flat ahead of Senate vote
Oct. 1: New York Times columnist Paul Krugman talks with Countdown’s Keith Olbermann about whether the provisions that the Senate has added to the bailout bill will attract ...
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Bailout bill to go to House
WASHINGTON -- Saying the nation's economy is on the line, congressional leaders are pushing for a vote today on a $700-billion plan to end the financial system's paralysis and ...
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The Curious Capitalist - Justin Fox - Economy - Markets - Business ...
Justin responds to our colleague Jim Poniewozik's rumination that maybe the media is to blame for the bailout bill's failure. The argument: the mainstream business press dropped the ...
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Stephanopoulos: What's Next? Congress Mulls Four Options
ABC News' George Stephanopoulos reports: There are meetings going on right now on Capitol Hill to try to figure out what to do about the $700 billion Wall Street bailout bill that ...
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Bailout Bill Passes!
Late Friday, the House voted 263-171 to pass the $700 billion bailout for the financial sector by a comfortable margin, just days after rejecting an earlier bill, capping one of the most unsettling weeks in Wall Street history. Reports from Congress ...
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Source: US News and World Report
NewsDateTime: 47 minutes ago

Michigan reaction to House passage of bailout bill
"Inaction is not an option, if we do nothing, it won't just mainly be Wall Street employees that lose their jobs, but more workers in Michigan and around the country." "While I still hold some reservations about this bill, I do believe that action is ...
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Source: Detroit Free Press
NewsDateTime: 25 minutes ago

Reversal of fortune: House approves $700-billion bailout bill
Traders pause to watch the House vote on television on the floor of the New York Stock Exchange today in New York City. The U.S. House of Representatives approved a $700-billion bailout of the U.S. financial system. Four days after rejecting a ...
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Source: Los Angeles Times
NewsDateTime: 18 minutes ago

House Passes Bailout Bill, Bush Signs It
Wells-Fargo Buying Wachovia Business Owners Mixed on Bailout Calamity Offers Lessons for Today's Crisis Bailout Hopes Up as 'No' Votes Change Reports Stoke Investor Pessimism What Could We Do With $700 Billion? Colleges Scrambling After Fund Freeze ...
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Source: The Ledger
NewsDateTime: 1 hour ago

WRAPUP 5-Bank lending hobbled as bailout bill becomes law
NEW YORK/LONDON, Oct 3 (Reuters) - Interbank lending remained jammed up around the world on Friday even as investors gave a lukewarm reception to the passage of an anxiously awaited $700 billion U.S. financial sector bailout package. Key benchmark ...
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Source: Reuters
NewsDateTime: 1 hour ago







Videos from YouTube
Title: Karl Rove Reacts to the No Vote on the Bailout!
Categories: Nancy,Bailout,News,Pelosi,Fox,Rove,News,Gibson,Karl,John,House,

Published on: 9/29/2008 5:58:47 PM
Title: Sarah Palin Talks Bailout Proposal
Categories: interview,economy,taxes,cbs,wall,globalism,healthcare,main,palin,mccain,News,sarah,street,finance,bailout,couric,katie,budget,

Published on: 9/25/2008 7:47:40 AM
Title: Congressman Ron Paul Schools Bernanke on the Bailout Plan
Categories: Price,Monetary,Wall,Bail,Constitutionality,News,Bailout,Ron,Bernanke,Street,Out,Authority,Debt,Fixing,Federal,Paul,Depression,

Published on: 9/24/2008 11:32:51 AM
Title: Palin: Bailout is about healthcare!
Categories: News,bailout,couric,news,cbs,thinkprogres,healthcare,palin,

Published on: 9/25/2008 11:25:46 AM
Title: Let's Play "WALLSTREET BAILOUT" The Rules Are... Rep Kaptur
Categories: military,economy,congress,taxcuts,gitmo,habeas,News,congresswoman,relief,mama,bush,kaptur,iraq,cheney,bill,corpus,

Published on: 9/22/2008 8:03:52 PM

The Bailout Bill is now the Law: President signs the Wallstreet bailout bill. traders cheer

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U.S. banking regulators said on Friday they will seek to resolve rival acquisition proposals by Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) and Wells Fargo & Co (WFC.N: Quote, Profile, Research, Stock Buzz) for Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz). In a surprise announcement, Wells Fargo agreed to buy Wachovia for more than $16 billion, four days after Citi agreed to acquire Wachovia's banking operations in a government-backed deal that involved the Treasury Department and the Federal Reserve. The Federal Deposit Insurance Corp (FDIC) announced a shotgun merger proposal between Citi and Wachovia on Monday, with the FDIC agreeing to absorb up to $42 billion in losses should Wachovia's $312 billion pool of loans later turn sour. The deal, reached in consultation with President George W. Bush, also allowed the FDIC to receive $12 billion in preferred stock and warrants from Citi for taking on possible future risks. A deal with Wells Fargo, if consummated, could wipe out potential risks to the government and taxpayers that a government-approved Citi deal would include. Citi said Friday it has an exclusivity agreement with Wachovia. The FDIC said it stood by the Citi deal, but at the same time left open the possibility of accepting Wells Fargo's proposal after reviewing it. It was not immediately known if FDIC Chairman Sheila Bair or her agency participated in the negotiations between Wells Fargo and Wachovia, but Bair said in a statement that the new offer "does not require FDIC assistance."
Citigroup Inc. demanded that Wells Fargo & Co. and Wachovia Corp. terminate a $15.1 billion takeover agreement announced today, saying it breached an exclusive deal the New York-based company reached earlier this week.
Citigroup, led by Chief Executive Officer Vikram Pandit, dropped as much as 15 percent in New York trading after San Francisco-based Wells Fargo said it would buy Wachovia in an all- stock transaction. Citigroup announced a $2.16 billion offer for parts of the company four days ago.
``Citi has substantial legal rights regarding Wachovia and this transaction,'' the New York-based company said in a statement. ``Wachovia's agreement to a transaction with Wells Fargo is in clear breach of an exclusivity agreement between Citi and Wachovia.''
The Citigroup deal, which included assistance from the Federal Deposit Insurance Corp., would have pushed the New York- based lender to third place among U.S. bank networks, behind Bank of America Corp. and JPMorgan Chase & Co. The proposal didn't include Wachovia's brokerage and mutual-fund businesses.
``Citigroup loses an attractive, accretive deal, complete with government assistance,'' David Trone, an analyst with Fox- Pitt Kelton Cochran Caronia Waller in New York, wrote in a note today. ``The deal was struck at the 11th hour and clearly had not been formally completed.''
Shares of Citigroup fell $2.50 to $20 in composite trading on the New York Stock Exchange at 10:24 a.m. The stock had gained 12 percent since the Wachovia deal was announced on Sept. 29.
FDIC Review

``The FDIC stands behind its previously announced agreement with Citigroup,'' FDIC Chairman Sheila Bair said in a statement today. ``The FDIC will be reviewing all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest.''
U.S. bank regulators said they haven't evaluated Wells Fargo's deal.
``We have not yet reviewed the new Wells Fargo proposal and the issues that it raises,'' the Federal Reserve and Office of the Comptroller of the Currency said today in a statement in Washington. ``The regulators will be working with the parties to achieve an outcome that protects all Wachovia creditors, including depositors, insured and uninsured, and promotes market stability.''
Citigroup's proposed deal with Wachovia ``has undergone extensive review'' by the Fed and OCC, the statement said.
Wachovia's Value
The Wells Fargo transaction values Charlotte, North Carolina-based Wachovia, led by CEO Robert K. Steel, at $7 a share, the companies said in a joint statement today. Wachovia traded at $6.80, up 74 percent from yesterday. Wells Fargo rose 8 percent to $38.16.
``It provides superior value compared to the previous offer to acquire only the banking operations of the company,'' Richard Kovacevich, 64, chairman of San Francisco-based Wells Fargo, said in a statement. ``Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world's great financial services companies.''
Wachovia shareholders get 0.1991 shares of Wells Fargo common stock for each share they own. Wells Fargo expects charges related to the acquisition of about $10 billion, and the company said it will issue as much as $20 billion of new securities, mostly common stock.
Wells Fargo said it will acquire all of Wachovia's businesses, preferred equity and banking deposits. Chief Financial Officer Howard Atkins said in the statement that the acquisition will add to earnings per share by the third year after completion and should produce an internal rate of return of at least 15 percent.

U.S. stocks rose for the first time in three days as the biggest job losses in five years spurred expectations Congress will pass a bank-bailout plan and the Federal Reserve will cut interest rates to bolster the economy. Bank of America Corp., General Motors Corp. and United Technologies Corp. climbed more than 4 percent as futures traders bet the Fed will lower its benchmark rate by as much as 0.75 percentage point at its next meeting. Wachovia Corp. rallied as much as 80 percent after Wells Fargo & Co., the biggest West Coast bank, agreed to buy the lender for about $15.1 billion. National City Corp. climbed 25 percent and Sovereign Bancorp Inc. added 16 percent. ``This economic report is putting a gun to Congress's head that they've got to do something,'' said Peter Jankovskis, the Lisle, Illinois-based co-chief investment officer at Oakbrook Investments LLC, which manages $1.4 billion. ``There's no wiggle room for Congress, and that makes it very likely the bailout package will be passed soon.'' The Standard & Poor's 500 Index gained 31.88, or 2.9 percent, to 1,146.16 at 11:08 a.m. in New York. The Dow Jones Industrial Average added 247.7, or 2.4 percent, to 10,730.55. The Nasdaq Composite Index rose 64.17, or 3.3 percent, to 2,040.89. Six stocks gained for each that fell on the New York Stock Exchange. The S&P 500, which has fallen 5.6 percent over the past five days, pared losses at the end of its worst week since 2002. The benchmark index for U.S. stocks tumbled 4 percent yesterday as reports on jobless claims and factory orders reignited concern the economy is sinking into a recession. Wachovia Rallies Wachovia rallied as much as $3.14 to $7.05 on the New York Stock Exchange. The Wells Fargo offer values the Charlotte, North Carolina-based bank at $7 a share, the companies said in a joint statement today. Citigroup Inc., which had agreed four days ago to buy Wachovia's banking operations, declined $2.37, or 11 percent, to $20.13. The bank demanded that Wells Fargo and Wachovia terminate their agreement, saying it breached an exclusive deal the New York-based company reached earlier this week. National City, Ohio's biggest bank and the subject of takeover speculation earlier this week, gained 25 percent to $3.92. Sovereign, the second-largest U.S. savings and loan, increased 95 cents to $5.99. The U.S. House of Representatives cleared the way to complete action on a Senate-passed $700 billion financial-market rescue package that was refashioned to entice enough votes for passage. By a vote of 223-205, the House prevented members from offering amendments that could snarl the proceedings. The tally signaled the plan has enough support to clear Congress and be sent to President George W. Bush to be signed into law. The House roll call was scheduled for early this afternoon. Fed Funds futures trading on the Chicago Board of Trade show a 98 percent chance the Fed will reduce its target rate for overnight bank loans by a half-percentage point to 1.5 percent at its Oct. 29 meeting and 2 percent odds of a 0.75 percentage- point cut. `Part of the Solution' ``We wouldn't be surprised to see the Fed cut rates 50 points even before the next scheduled meeting,'' James Shugg, a senior economist at Westpac Banking Corp. in London, said in an interview on Bloomberg Television. ``It actually helps boost, to some extent, bank profitability. An interest-rate cut is an important part of the solution to the current serious problems confronting the U.S. economy.'' Payrolls fell by 159,000 in September, the biggest decrease in five years, the Labor Department said. The jobless rate, the last one reported before the presidential election, remained at 6.1 percent. Hours worked reached the lowest level since records began in 1964. Railroad Rally CSX Corp. jumped $3.96, or 8.4 percent, to $51.17. JPMorgan Chase & Co. upgraded shares of the Jacksonville, Florida-based railroad to ``overweight'' from ``neutral,'' saying an 11 percent tumble yesterday left the stock at a ``compelling valuation'' given its ``strong visibility'' for earnings growth next year. Burlington Northern Santa Fe Corp., also raised to ``overweight'' from ``neutral'' by JPMorgan, climbed $4.31, or 5.2 percent, to $87.31. The Fort Worth, Texas-based railroad whose largest investor is billionaire Warren Buffett dropped 7.3 percent yesterday on concern falling commodities and factory orders may foreshadow a decline in freight volume. General Growth Properties Inc. gained $4.05, or 53 percent, to $11.64. The Chicago-based mall owner whose shares slumped 48 percent yesterday fired its chief financial officer and suspended dividend payments to weather the seizure in financial markets. Equities retreated from Sao Paulo to London to Tokyo this week, sending the MSCI All-Country World Index to an 8.9 percent decline, as an increase in bank failures exacerbated the credit freeze that pushed up borrowing costs for companies and consumers around the globe. The S&P 500, down 22 percent this year, still trades for 21.9 times profit from the past 12 months. Only four of 48 developed and emerging nations tracked by MSCI Inc. -- Switzerland, Jordan, Colombia and Morocco -- have a higher price-to-earnings ratio, according to data compiled by Bloomberg yesterday. Europe's Dow Jones Stoxx 600 Index trades at 10.9 times earnings, near the lowest since at least 2002.

In another sign of weakness, the average hourly work week slipped by 0.1 hour to 33.6 hours. And a modest 3-cent gain in the average hourly salary, combined with the shorter week, means that the average weekly paycheck fell by 81 cents to $610.51. Both the work week and hourly wage gains were weaker than forecasts. The report is based on surveys of employers and households conducted in the week of Sept. 8 to 12, a period before the worst of the current financial crisis hit Wall Street. That crisis caused banks to hoard cash and cut back on credit extended to businesses. Fears that the credit crunch will cause widespread job losses and a severe downturn in the already struggling economy prompted Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to push for a $700 billion Wall Street bailout. The measure, which passed the Senate Wednesday night, was voted down in the House on Monday. But the House is set to vote on the measure again Friday

Occidental Petroleum Corporation News - The New York Times
... of the U.S. oil giant on Tuesday, the latest move in Latin ... and extra revenue from its crude output to resolve a legal ... Petroleum Corporation agreed to acquire its smaller rival ...
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FT.com / Markets - Earnings fears dent European equities
... hard on the heels of an unexpected profit miss from rival ... surprise loss at the fourth-biggest US lender Wachovia. ... to a positive outcome from talks with European regulators.
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Money & Company | WaMu's wild, rumor-filled week | Los Angeles Times
Pressured by regulators, WaMu’s board fired embattled ... it would drastically shrink its business in a bid ... some on Wall Street turned their attention to Wachovia’s arch-rival ...
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BBC NEWS | Business | AT&T merger to claim 10,000 jobs
... staff cuts would be made by 2009 in a move to ... If, as is expected, regulators approve AT&T's bid, the takeover will ... single company - added to pressure on rival Verizon to resolve ...
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Making room for the possibility of magic can move your ... warn the companies are in no mood to concede more to resolve ... sources familiar with the transaction said federal regulators ...
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September 2008
McCain wants to postpone Friday’s debate and go to Washington to help resolve ... The SEC’s move follows a similar move by regulators in the U.K. and the announcement by ... the session to see whether he really thought Houston had a chance to rival New ...
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Under terms of the agreement, which has been approved by directors of each company, Wachovia shareholders will receive 0.1991 shares of Wells Fargo stock in exchange for each share of Wachovia stock. The transaction, based on Wells Fargo’s closing stock price of $35.16 on Thursday, is valued at $7 a share. Wachovia has almost 2.2 billion common shares outstanding. The agreement requires the approval of Wachovia shareholders and regulators. “This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support,” Wachovia’s chief executive, Robert K. Steel, said in a statement. “The market presence and composition of our businesses, along with our service-oriented cultures, are extraordinarily complementary and this combination creates great potential for sustained stability and growth.” The agreement, the chairman of Wells Fargo, Richard M. Kovacevich, said, “provides superior value compared to the previous offer to acquire only the banking operations of the company and because Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world’s great financial services companies.” “Wachovia’s brokerage and asset management businesses, which would have been left behind in the prior proposal,” Mr. Kovacevich said, “are tightly interwoven with Wachovia’s core banking business — and this agreement avoids the complexity and unavoidable loss of value in trying to separate them, which would have disrupted Wachovia’s team members and customers.” Under the Citigroup deal, Wachovia would have retained parts of its wealth management businesses, including the Evergreen and Wachovia Securities franchises, and Citigroup would received the banking subsidiaries. In addition, as part of the Citigroup deal, the F.D.I.C. had agreed to guarantee losses above $42 billion in exchange for preferred stock and warrants worth about $12 billion. The deal will further concentrate power within the nation’s banking industry in the hands of a few giant lenders. A sale to Wells Fargo would further concentrate Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Wells Fargo would control more than 30 percent of the industry’s deposits. Together, those three would be so large that they would dominate the industry, with unrivaled power to set prices for their loans and services. Given their size and reach, the institutions would probably come under greater scrutiny from federal regulators. Some small and midsize banks, already under pressure, might have little choice but to seek suitors. For Wells Fargo, a deal will extend its reach past the Mississippi River, creating a cost-to-coast branch network that will compete with Bank of America and now JPMorgan Chase. It would also give Wells Fargo an important foothold in New York, Florida, and other big markets along the Atlantic Coast, ramping up its ability to sell mortgages, checking accounts, and other consumer loans. On the surface, Wachovia and Wells Fargo, the country’s fourth and fifth largest banks by assets, appear to be almost mirror images of each other. Both were oversized regional banks that never seemed to have national ambitions. Both emphasized consumer banking over lending to big institutional clients. And both had strong sales culture and a focus on nuts-and-bolts operations. Wells and Wachovia have been the subject of merger speculation for years. But Wachovia, like WaMu, has been hobbled by bad mortgages, making a merger more urgent and prompting federal regulators to push for a quick sale. Wachovia’s share price has plunged nearly 74 percent this year. With a big presence along the California coast, Wells Fargo has racked up big losses on mortgages and credit card loans as the housing market has melted down. But it has not been crippled by the bust like many of its big competitors, and maintained relatively strong finances. Wells Fargo kept its lending standards relatively high, even as other big mortgage lenders barreled into California as the housing market boomed. It held many of its loans, rather than packaging and selling them to outside investors. And without a big investment bank, it never suffered the massive write-offs of its big Wall Street rivals. It also bolstered its results with aggressive accounting. Wachovia, by contrast, has been ravaged. Its 2006 purchase of Golden West Financial, a California lender specializing in so-called pay-option mortgages, has proved disastrous. The bank also faces mounting losses on loans made to home builders and commercial real estate developers, and its acquisition of A. G. Edwards, a retail brokerage firm, turned out to be problematic. In June, Wachovia’s board ousted G. Kennedy Thompson, the bank’s longtime chief executive. The talks intensified on Sunday after a weekend of tense negotiations in Washington over a $700 billion rescue for the banking industry. Only days earlier, federal regulators seized and sold the nation’s largest savings and loan, Washington Mutual, in one of a series of important deals that have reshaped the financial landscape. As the credit crisis has deepened, a consolidation in the financial industry that analysts have predicted for years seems to be playing out in a matter of weeks. The impact will be felt on Main Street, Wall Street and in Washington. While the tie-ups may restore confidence in the industry, they also could leave a handful of big lenders to determine fees and interest rates on everything from home mortgages to credit cards to checking accounts. Some small and midsize banks may be unable to compete with these behemoths. But a Wells-Wachovia deal also could shift the center of power in the banking industry further from New York. JPMorgan, which bought Seattle-based WaMu, is based in Manhattan. But Bank of America, which recently acquired Merrill Lynch, is based in Charlotte, N.C. And Wells, which is seeking to buy Charlotte-based Wachovia, is based in San Francisco. In the last two weeks, Wachovia had entered into discussions with several possible suitors. After the collapse of Lehman Brothers, Wachovia held talks with Goldman Sachs and Morgan Stanley and put out inquiries to other banks, according to people close to the situation. Last week, it held discussions with Citigroup, Wells Fargo and Banco Santander of Spain, before the foreign bank’s interested cooled.



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Title: Peter Schiff - (Former Ron Paul Economic Advisor) Versus Art Laffer (Former Ronald McReagan Economic Advisor) - August 28, 2006 - Peter Schiff [Pimp]
Categories: Adkins,Freddie,Mutual,Real,Russia,ron,Volker,crunch,bubble,Faber,News,bailout,depression,Mac,Washington,Mike,David,And,Estate,Ben,Schiff,Cavuto,Powell,JP,Marc,Paul,Tom,Bulls,out,Pacific,Bail,gold,mortgage,Fannie,Capital,inflation,Tice,Jim,Rogers,Economy,FOX,hyperinflation,peter,Mae,Patricia,meltdown,Morgan,foreign,Euro,Stein,recession,housing,Australia,credit,Norman,Wachovia,Bears,

Published on: 9/29/2008 12:58:28 AM
Title: DRUNK, BROKE AND VOMITING! THANKS AIG, WAMU, WACHOVIA!
Categories: cnbc,broke,aig,vomiting,insurance,gold,laughing,american,puke,News,hotroast,mariott,street,reserve,money,central,parody,federal,presidential,freddie,group,vomit,spoof,markets,baby,silver,international,vlogolution,debates,crisis,vienna,wall,washington,sterns,park,mutual,commercial,drunk,retirement,barf,fannie,butterflies,bailouts,wamu,poor,bear,credit,

Published on: 9/22/2008 9:36:13 AM
Title: Paulson Bernanke 700 Billion Dollar Boondogle
Categories: Wall,gotcha!,700,Wa-mu,commercial,political,News,Bailout,Pelosi,Bernanke,commentary,Street,news,documentary,grassroots,outreach,analysis,Crash,Paulson,Billion,Wachovia,

Published on: 9/29/2008 5:42:56 PM
Title: 700 Billion Bailout, more like 4 Trillion $ bailout and counting.
Categories: News,aig,bailout,billion,700,nation,city,lehman,washington,wachovia,mutual,

Published on: 9/28/2008 1:37:07 PM
Title: BUSHONOMICS UNBLAMED FOR MELTDOWN: Its the Democrat Jingoist Space Technologists to blame. House Rejects $700B Bailout Package 228-205: Democrat Noes 95 Ayes 140 Republican Noes 133 Ayes 65. A stunning defiance of President Bush and Congressional leaders
Categories: aig,brittle,bail,Economic,forclosures,bubble,adventure,bailout,disintegrating,Meltdown,democrats,depression,foreclosure,financial,administrations,djimon,fight,budget,debates,throttle,democratic,contagion,McCainonomics,mismanagement,debt,boom,forbes,People,against,fbi,fed,fiercely,Bushs,action,benanke,mortgage,revitalize,flummoxed,couric,citigroup,federal,Bushonomics,freddie,$1,16th,brutal,fascism,crisis,deficit,brothers,affliction,finance,bloomberg,housing,fc,fannie,bjj,bear,bernanke,fraud,banking,

Published on: 9/29/2008 5:14:21 PM

Regulators move in to resolve rival Wachovia bids

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U.S. banking regulators said on Friday they will seek to resolve rival acquisition proposals by Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) and Wells Fargo & Co (WFC.N: Quote, Profile, Research, Stock Buzz) for Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz). In a surprise announcement, Wells Fargo agreed to buy Wachovia for more than $16 billion, four days after Citi agreed to acquire Wachovia's banking operations in a government-backed deal that involved the Treasury Department and the Federal Reserve. The Federal Deposit Insurance Corp (FDIC) announced a shotgun merger proposal between Citi and Wachovia on Monday, with the FDIC agreeing to absorb up to $42 billion in losses should Wachovia's $312 billion pool of loans later turn sour. The deal, reached in consultation with President George W. Bush, also allowed the FDIC to receive $12 billion in preferred stock and warrants from Citi for taking on possible future risks. A deal with Wells Fargo, if consummated, could wipe out potential risks to the government and taxpayers that a government-approved Citi deal would include. Citi said Friday it has an exclusivity agreement with Wachovia. The FDIC said it stood by the Citi deal, but at the same time left open the possibility of accepting Wells Fargo's proposal after reviewing it. It was not immediately known if FDIC Chairman Sheila Bair or her agency participated in the negotiations between Wells Fargo and Wachovia, but Bair said in a statement that the new offer "does not require FDIC assistance."
Citigroup Inc. demanded that Wells Fargo & Co. and Wachovia Corp. terminate a $15.1 billion takeover agreement announced today, saying it breached an exclusive deal the New York-based company reached earlier this week.
Citigroup, led by Chief Executive Officer Vikram Pandit, dropped as much as 15 percent in New York trading after San Francisco-based Wells Fargo said it would buy Wachovia in an all- stock transaction. Citigroup announced a $2.16 billion offer for parts of the company four days ago.
``Citi has substantial legal rights regarding Wachovia and this transaction,'' the New York-based company said in a statement. ``Wachovia's agreement to a transaction with Wells Fargo is in clear breach of an exclusivity agreement between Citi and Wachovia.''
The Citigroup deal, which included assistance from the Federal Deposit Insurance Corp., would have pushed the New York- based lender to third place among U.S. bank networks, behind Bank of America Corp. and JPMorgan Chase & Co. The proposal didn't include Wachovia's brokerage and mutual-fund businesses.
``Citigroup loses an attractive, accretive deal, complete with government assistance,'' David Trone, an analyst with Fox- Pitt Kelton Cochran Caronia Waller in New York, wrote in a note today. ``The deal was struck at the 11th hour and clearly had not been formally completed.''
Shares of Citigroup fell $2.50 to $20 in composite trading on the New York Stock Exchange at 10:24 a.m. The stock had gained 12 percent since the Wachovia deal was announced on Sept. 29.
FDIC Review

``The FDIC stands behind its previously announced agreement with Citigroup,'' FDIC Chairman Sheila Bair said in a statement today. ``The FDIC will be reviewing all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest.''
U.S. bank regulators said they haven't evaluated Wells Fargo's deal.
``We have not yet reviewed the new Wells Fargo proposal and the issues that it raises,'' the Federal Reserve and Office of the Comptroller of the Currency said today in a statement in Washington. ``The regulators will be working with the parties to achieve an outcome that protects all Wachovia creditors, including depositors, insured and uninsured, and promotes market stability.''
Citigroup's proposed deal with Wachovia ``has undergone extensive review'' by the Fed and OCC, the statement said.
Wachovia's Value
The Wells Fargo transaction values Charlotte, North Carolina-based Wachovia, led by CEO Robert K. Steel, at $7 a share, the companies said in a joint statement today. Wachovia traded at $6.80, up 74 percent from yesterday. Wells Fargo rose 8 percent to $38.16.
``It provides superior value compared to the previous offer to acquire only the banking operations of the company,'' Richard Kovacevich, 64, chairman of San Francisco-based Wells Fargo, said in a statement. ``Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world's great financial services companies.''
Wachovia shareholders get 0.1991 shares of Wells Fargo common stock for each share they own. Wells Fargo expects charges related to the acquisition of about $10 billion, and the company said it will issue as much as $20 billion of new securities, mostly common stock.
Wells Fargo said it will acquire all of Wachovia's businesses, preferred equity and banking deposits. Chief Financial Officer Howard Atkins said in the statement that the acquisition will add to earnings per share by the third year after completion and should produce an internal rate of return of at least 15 percent.

U.S. stocks rose for the first time in three days as the biggest job losses in five years spurred expectations Congress will pass a bank-bailout plan and the Federal Reserve will cut interest rates to bolster the economy. Bank of America Corp., General Motors Corp. and United Technologies Corp. climbed more than 4 percent as futures traders bet the Fed will lower its benchmark rate by as much as 0.75 percentage point at its next meeting. Wachovia Corp. rallied as much as 80 percent after Wells Fargo & Co., the biggest West Coast bank, agreed to buy the lender for about $15.1 billion. National City Corp. climbed 25 percent and Sovereign Bancorp Inc. added 16 percent. ``This economic report is putting a gun to Congress's head that they've got to do something,'' said Peter Jankovskis, the Lisle, Illinois-based co-chief investment officer at Oakbrook Investments LLC, which manages $1.4 billion. ``There's no wiggle room for Congress, and that makes it very likely the bailout package will be passed soon.'' The Standard & Poor's 500 Index gained 31.88, or 2.9 percent, to 1,146.16 at 11:08 a.m. in New York. The Dow Jones Industrial Average added 247.7, or 2.4 percent, to 10,730.55. The Nasdaq Composite Index rose 64.17, or 3.3 percent, to 2,040.89. Six stocks gained for each that fell on the New York Stock Exchange. The S&P 500, which has fallen 5.6 percent over the past five days, pared losses at the end of its worst week since 2002. The benchmark index for U.S. stocks tumbled 4 percent yesterday as reports on jobless claims and factory orders reignited concern the economy is sinking into a recession. Wachovia Rallies Wachovia rallied as much as $3.14 to $7.05 on the New York Stock Exchange. The Wells Fargo offer values the Charlotte, North Carolina-based bank at $7 a share, the companies said in a joint statement today. Citigroup Inc., which had agreed four days ago to buy Wachovia's banking operations, declined $2.37, or 11 percent, to $20.13. The bank demanded that Wells Fargo and Wachovia terminate their agreement, saying it breached an exclusive deal the New York-based company reached earlier this week. National City, Ohio's biggest bank and the subject of takeover speculation earlier this week, gained 25 percent to $3.92. Sovereign, the second-largest U.S. savings and loan, increased 95 cents to $5.99. The U.S. House of Representatives cleared the way to complete action on a Senate-passed $700 billion financial-market rescue package that was refashioned to entice enough votes for passage. By a vote of 223-205, the House prevented members from offering amendments that could snarl the proceedings. The tally signaled the plan has enough support to clear Congress and be sent to President George W. Bush to be signed into law. The House roll call was scheduled for early this afternoon. Fed Funds futures trading on the Chicago Board of Trade show a 98 percent chance the Fed will reduce its target rate for overnight bank loans by a half-percentage point to 1.5 percent at its Oct. 29 meeting and 2 percent odds of a 0.75 percentage- point cut. `Part of the Solution' ``We wouldn't be surprised to see the Fed cut rates 50 points even before the next scheduled meeting,'' James Shugg, a senior economist at Westpac Banking Corp. in London, said in an interview on Bloomberg Television. ``It actually helps boost, to some extent, bank profitability. An interest-rate cut is an important part of the solution to the current serious problems confronting the U.S. economy.'' Payrolls fell by 159,000 in September, the biggest decrease in five years, the Labor Department said. The jobless rate, the last one reported before the presidential election, remained at 6.1 percent. Hours worked reached the lowest level since records began in 1964. Railroad Rally CSX Corp. jumped $3.96, or 8.4 percent, to $51.17. JPMorgan Chase & Co. upgraded shares of the Jacksonville, Florida-based railroad to ``overweight'' from ``neutral,'' saying an 11 percent tumble yesterday left the stock at a ``compelling valuation'' given its ``strong visibility'' for earnings growth next year. Burlington Northern Santa Fe Corp., also raised to ``overweight'' from ``neutral'' by JPMorgan, climbed $4.31, or 5.2 percent, to $87.31. The Fort Worth, Texas-based railroad whose largest investor is billionaire Warren Buffett dropped 7.3 percent yesterday on concern falling commodities and factory orders may foreshadow a decline in freight volume. General Growth Properties Inc. gained $4.05, or 53 percent, to $11.64. The Chicago-based mall owner whose shares slumped 48 percent yesterday fired its chief financial officer and suspended dividend payments to weather the seizure in financial markets. Equities retreated from Sao Paulo to London to Tokyo this week, sending the MSCI All-Country World Index to an 8.9 percent decline, as an increase in bank failures exacerbated the credit freeze that pushed up borrowing costs for companies and consumers around the globe. The S&P 500, down 22 percent this year, still trades for 21.9 times profit from the past 12 months. Only four of 48 developed and emerging nations tracked by MSCI Inc. -- Switzerland, Jordan, Colombia and Morocco -- have a higher price-to-earnings ratio, according to data compiled by Bloomberg yesterday. Europe's Dow Jones Stoxx 600 Index trades at 10.9 times earnings, near the lowest since at least 2002.

In another sign of weakness, the average hourly work week slipped by 0.1 hour to 33.6 hours. And a modest 3-cent gain in the average hourly salary, combined with the shorter week, means that the average weekly paycheck fell by 81 cents to $610.51. Both the work week and hourly wage gains were weaker than forecasts. The report is based on surveys of employers and households conducted in the week of Sept. 8 to 12, a period before the worst of the current financial crisis hit Wall Street. That crisis caused banks to hoard cash and cut back on credit extended to businesses. Fears that the credit crunch will cause widespread job losses and a severe downturn in the already struggling economy prompted Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to push for a $700 billion Wall Street bailout. The measure, which passed the Senate Wednesday night, was voted down in the House on Monday. But the House is set to vote on the measure again Friday

Occidental Petroleum Corporation News - The New York Times
... of the U.S. oil giant on Tuesday, the latest move in Latin ... and extra revenue from its crude output to resolve a legal ... Petroleum Corporation agreed to acquire its smaller rival ...
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FT.com / Markets - Earnings fears dent European equities
... hard on the heels of an unexpected profit miss from rival ... surprise loss at the fourth-biggest US lender Wachovia. ... to a positive outcome from talks with European regulators.
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Money & Company | WaMu's wild, rumor-filled week | Los Angeles Times
Pressured by regulators, WaMu’s board fired embattled ... it would drastically shrink its business in a bid ... some on Wall Street turned their attention to Wachovia’s arch-rival ...
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BBC NEWS | Business | AT&T merger to claim 10,000 jobs
... staff cuts would be made by 2009 in a move to ... If, as is expected, regulators approve AT&T's bid, the takeover will ... single company - added to pressure on rival Verizon to resolve ...
more ...
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Cached

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Making room for the possibility of magic can move your ... warn the companies are in no mood to concede more to resolve ... sources familiar with the transaction said federal regulators ...
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September 2008
McCain wants to postpone Friday’s debate and go to Washington to help resolve ... The SEC’s move follows a similar move by regulators in the U.K. and the announcement by ... the session to see whether he really thought Houston had a chance to rival New ...
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Source: ABC News Blogs
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Under terms of the agreement, which has been approved by directors of each company, Wachovia shareholders will receive 0.1991 shares of Wells Fargo stock in exchange for each share of Wachovia stock. The transaction, based on Wells Fargo’s closing stock price of $35.16 on Thursday, is valued at $7 a share. Wachovia has almost 2.2 billion common shares outstanding. The agreement requires the approval of Wachovia shareholders and regulators. “This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support,” Wachovia’s chief executive, Robert K. Steel, said in a statement. “The market presence and composition of our businesses, along with our service-oriented cultures, are extraordinarily complementary and this combination creates great potential for sustained stability and growth.” The agreement, the chairman of Wells Fargo, Richard M. Kovacevich, said, “provides superior value compared to the previous offer to acquire only the banking operations of the company and because Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world’s great financial services companies.” “Wachovia’s brokerage and asset management businesses, which would have been left behind in the prior proposal,” Mr. Kovacevich said, “are tightly interwoven with Wachovia’s core banking business — and this agreement avoids the complexity and unavoidable loss of value in trying to separate them, which would have disrupted Wachovia’s team members and customers.” Under the Citigroup deal, Wachovia would have retained parts of its wealth management businesses, including the Evergreen and Wachovia Securities franchises, and Citigroup would received the banking subsidiaries. In addition, as part of the Citigroup deal, the F.D.I.C. had agreed to guarantee losses above $42 billion in exchange for preferred stock and warrants worth about $12 billion. The deal will further concentrate power within the nation’s banking industry in the hands of a few giant lenders. A sale to Wells Fargo would further concentrate Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Wells Fargo would control more than 30 percent of the industry’s deposits. Together, those three would be so large that they would dominate the industry, with unrivaled power to set prices for their loans and services. Given their size and reach, the institutions would probably come under greater scrutiny from federal regulators. Some small and midsize banks, already under pressure, might have little choice but to seek suitors. For Wells Fargo, a deal will extend its reach past the Mississippi River, creating a cost-to-coast branch network that will compete with Bank of America and now JPMorgan Chase. It would also give Wells Fargo an important foothold in New York, Florida, and other big markets along the Atlantic Coast, ramping up its ability to sell mortgages, checking accounts, and other consumer loans. On the surface, Wachovia and Wells Fargo, the country’s fourth and fifth largest banks by assets, appear to be almost mirror images of each other. Both were oversized regional banks that never seemed to have national ambitions. Both emphasized consumer banking over lending to big institutional clients. And both had strong sales culture and a focus on nuts-and-bolts operations. Wells and Wachovia have been the subject of merger speculation for years. But Wachovia, like WaMu, has been hobbled by bad mortgages, making a merger more urgent and prompting federal regulators to push for a quick sale. Wachovia’s share price has plunged nearly 74 percent this year. With a big presence along the California coast, Wells Fargo has racked up big losses on mortgages and credit card loans as the housing market has melted down. But it has not been crippled by the bust like many of its big competitors, and maintained relatively strong finances. Wells Fargo kept its lending standards relatively high, even as other big mortgage lenders barreled into California as the housing market boomed. It held many of its loans, rather than packaging and selling them to outside investors. And without a big investment bank, it never suffered the massive write-offs of its big Wall Street rivals. It also bolstered its results with aggressive accounting. Wachovia, by contrast, has been ravaged. Its 2006 purchase of Golden West Financial, a California lender specializing in so-called pay-option mortgages, has proved disastrous. The bank also faces mounting losses on loans made to home builders and commercial real estate developers, and its acquisition of A. G. Edwards, a retail brokerage firm, turned out to be problematic. In June, Wachovia’s board ousted G. Kennedy Thompson, the bank’s longtime chief executive. The talks intensified on Sunday after a weekend of tense negotiations in Washington over a $700 billion rescue for the banking industry. Only days earlier, federal regulators seized and sold the nation’s largest savings and loan, Washington Mutual, in one of a series of important deals that have reshaped the financial landscape. As the credit crisis has deepened, a consolidation in the financial industry that analysts have predicted for years seems to be playing out in a matter of weeks. The impact will be felt on Main Street, Wall Street and in Washington. While the tie-ups may restore confidence in the industry, they also could leave a handful of big lenders to determine fees and interest rates on everything from home mortgages to credit cards to checking accounts. Some small and midsize banks may be unable to compete with these behemoths. But a Wells-Wachovia deal also could shift the center of power in the banking industry further from New York. JPMorgan, which bought Seattle-based WaMu, is based in Manhattan. But Bank of America, which recently acquired Merrill Lynch, is based in Charlotte, N.C. And Wells, which is seeking to buy Charlotte-based Wachovia, is based in San Francisco. In the last two weeks, Wachovia had entered into discussions with several possible suitors. After the collapse of Lehman Brothers, Wachovia held talks with Goldman Sachs and Morgan Stanley and put out inquiries to other banks, according to people close to the situation. Last week, it held discussions with Citigroup, Wells Fargo and Banco Santander of Spain, before the foreign bank’s interested cooled.



Videos from YouTube
Title: Peter Schiff - (Former Ron Paul Economic Advisor) Versus Art Laffer (Former Ronald McReagan Economic Advisor) - August 28, 2006 - Peter Schiff [Pimp]
Categories: Adkins,Freddie,Mutual,Real,Russia,ron,Volker,crunch,bubble,Faber,News,bailout,depression,Mac,Washington,Mike,David,And,Estate,Ben,Schiff,Cavuto,Powell,JP,Marc,Paul,Tom,Bulls,out,Pacific,Bail,gold,mortgage,Fannie,Capital,inflation,Tice,Jim,Rogers,Economy,FOX,hyperinflation,peter,Mae,Patricia,meltdown,Morgan,foreign,Euro,Stein,recession,housing,Australia,credit,Norman,Wachovia,Bears,

Published on: 9/29/2008 12:58:28 AM
Title: DRUNK, BROKE AND VOMITING! THANKS AIG, WAMU, WACHOVIA!
Categories: cnbc,broke,aig,vomiting,insurance,gold,laughing,american,puke,News,hotroast,mariott,street,reserve,money,central,parody,federal,presidential,freddie,group,vomit,spoof,markets,baby,silver,international,vlogolution,debates,crisis,vienna,wall,washington,sterns,park,mutual,commercial,drunk,retirement,barf,fannie,butterflies,bailouts,wamu,poor,bear,credit,

Published on: 9/22/2008 9:36:13 AM
Title: Paulson Bernanke 700 Billion Dollar Boondogle
Categories: Wall,gotcha!,700,Wa-mu,commercial,political,News,Bailout,Pelosi,Bernanke,commentary,Street,news,documentary,grassroots,outreach,analysis,Crash,Paulson,Billion,Wachovia,

Published on: 9/29/2008 5:42:56 PM
Title: 700 Billion Bailout, more like 4 Trillion $ bailout and counting.
Categories: News,aig,bailout,billion,700,nation,city,lehman,washington,wachovia,mutual,

Published on: 9/28/2008 1:37:07 PM
Title: BUSHONOMICS UNBLAMED FOR MELTDOWN: Its the Democrat Jingoist Space Technologists to blame. House Rejects $700B Bailout Package 228-205: Democrat Noes 95 Ayes 140 Republican Noes 133 Ayes 65. A stunning defiance of President Bush and Congressional leaders
Categories: aig,brittle,bail,Economic,forclosures,bubble,adventure,bailout,disintegrating,Meltdown,democrats,depression,foreclosure,financial,administrations,djimon,fight,budget,debates,throttle,democratic,contagion,McCainonomics,mismanagement,debt,boom,forbes,People,against,fbi,fed,fiercely,Bushs,action,benanke,mortgage,revitalize,flummoxed,couric,citigroup,federal,Bushonomics,freddie,$1,16th,brutal,fascism,crisis,deficit,brothers,affliction,finance,bloomberg,housing,fc,fannie,bjj,bear,bernanke,fraud,banking,

Published on: 9/29/2008 5:14:21 PM

The Bailout is on Track

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Rejected once amid public fury about bailing out reckless financiers, a $700 billion rescue package is getting a second chance in the House as voters anxiously ponder an economic meltdown that could wipe out their ability to borrow, plunder their savings and put them out of work. Republicans and Democrats were jumping aboard the bailout as the House sped toward a make-or-break vote — a much-anticipated do-over after the plan met with a stunning defeat Monday, triggering a historic stock market plunge.
California may need an emergency loan of up to $7 billion from the federal government within weeks, the Los Angeles Times on Friday quoted Gov. Arnold Schwarzenegger as saying in a letter to U.S. Treasury Secretary Henry Paulson.
In the letter dated Oct. 2, Schwarzenegger called for the passage of the $700 billion financial industry bailout plan which the U.S. House of Representatives is expected to vote on on Friday, the Times said.
"Absent a clear resolution to this financial crisis, California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal treasury for short-term financing," Schwarzenegger wrote in the letter, according to the paper.
A top Schwarzenegger aide followed up the letter with a call to the Treasury secretary on Thursday night, the paper said.
The California governor's office and the U.S. Treasury department could not immediately be reached for comment.
Credit markets worldwide have frozen up in the two weeks since the failure of U.S. investment bank Lehman Brothers, prompting concerns that issuers will run into trouble rolling over previous loans.
In the letter, Schwarzenegger noted California's plans to issue $7 billion in revenue anticipation notes in the coming days to fund short-tern cash needs -- now put in doubt by the crisis in the credit markets.
On Wednesday, California Treasurer Bill Lockyer said the most populous U.S. state's cash reserves may be exhausted near the end of October, and various state-funded services are at risk of grinding to a halt. He said the planned notes sale was at risk from the uncertainty gripping financial markets and the U.S. government's lack of response to it.
Lockyer, who manages the bonds of the biggest issuer of public debt in the United States, said the credit market was simply frozen because financial institutions were afraid to commit capital amid enormous uncertainty.
"The economic fallout from this national credit crisis continues to drain state tax coffers, making it even more difficult to weather the continuation of frozen credit markets for any length of time. I will continue to do all I can to encourage the passage of the emergency rescue plan," Schwarzenegger wrote




Housing bailout on track : Real Estate : The Rocky Mountain News
The Senate cleared the last hurdle Friday to passing a housing rescue aimed at sparing hundreds of thousands of homeowners from foreclosure and bolstering troubled mortgage giants ...
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Senate puts financial bailout back on track
The U.S. Senate passed a revised US$700-billion U.S. financial bailout plan Wednesday night by a vote
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Stocks rise as investors track hearing on bailout (OneNewsNow.com)
NEW YORK - Financial markets appeared somewhat more upbeat Tuesday, with stocks showing a partial rebound from a huge sell-off as top economic officials updated Congress about ...
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Housing rescue on track to pass Senate by Saturday - Yahoo! News
... 80-13 test vote showed broad support for the election-year package and put it on track to ... Republicans are vehemently opposed to the foreclosure rescue, which they call a bailout of ...
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Stocks rise as investors track hearing on bailout - Examiner.com
Stocks rise as investors track hearing on bailout, NEW YORK ... Just because times are tough, doesn't mean you can't surround yourself with leather, wood, heated seats and the ...
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Local Business Owners Have Mixed Feelings About Bailout
Hammerberg said he is disturbed by reports of tax breaks in the revised legislation that promote wool research and race track improvements. "A bailout's a bailout," Hammerberg said. "If my business needed $25,000 to continue, I'd be asking for $25,000 ...
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Source: The Ledger
NewsDateTime: 41 minutes ago

Euro Stocks Gain Ahead of Bailout Vote
European stocks rose further in late trade on Friday, up 3.3 percent, tracking sharp gains on Wall Street on hopes over the vote of the U.S. House of Representatives on the rescue plan for the ailing financial sector. The FTSEurofirst 300 index of ...
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Source: CNBC
NewsDateTime: 48 minutes ago

W.House urges swift passage of bailout
... White House affirmed its strong support for the bailout legislation, saying it would "send an important, helpful signal to markets here and abroad that the federal government will take the actions necessary to get our financial system back on track ...
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Source: Washington Post
NewsDateTime: 2 hours ago

UPDATE 1-White House urges swift passage of bailout bill
... policy, the White House affirmed its backing for the bailout, saying it would 'send an important, helpful signal to markets here and abroad that the federal government will take the actions necessary to get our financial system back on track.' The ...
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Source: Forbes
NewsDateTime: 48 minutes ago

No Objection From Obama To Bailout Bill Language That Could Harm Firms ...
Small business advocates are extremely disappointed Senator Obama did not object to Section 107 of the bailout bill. Considering the Bush Administration's well documented track record of opposing federal programs for women and minorities, it seems ...
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Source: Huffingtonpost.com
NewsDateTime: 3 hours ago



Large manufacturers have started to see their customers pull back "just in the past few weeks," due to difficulties with credit, said Daniel Meckstroth, chief economist at MAPI/Manufacturers Alliance, a research group. The jobs and manufacturing reports disappointed Wall Street. The Dow dropped 348 points and the S&P 500 fell 47 points. The negative economic reports could also add pressure on the Federal Reserve to cut its benchmark interest rate in an effort to bolster the economy. Many economists think the Fed could even move before its next meeting Oct. 28. Credit markets, meanwhile, remained locked up as banks are wary of lending to each other, unsure of which might be the next to collapse. The London Interbank Offered Rate, or LIBOR, for 3-month dollar loans rose to 4.21 percent Thursday from 4.15 percent the day before. The LIBOR is the rate many banks charge each other for overnight loans and is used as a benchmark for trillions of dollars of auto, student and other consumer loans. Martin Regalia, chief economist for the U.S. Chamber of Commerce, said the higher short-term rates for banks make credit harder to get for everyone else. "When you build a dam upstream, you don't get any water downstream," he said. __






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