Like the assassination of Archduke Franz Ferdinand that touched off World War I, the collapse of Lehman Brothers, the largest underwriter of bonds backed by subprime loans when it declared bankruptcy on Sept. 15, 2008, was an event whose repercussions extended far beyond its executives, investors and creditors. It touched off a financial crisis that's affected employment and earnings of the middle class.
The bankruptcy of the 158-year-old Lehman Brothers wasn't the first sign of trouble in the economy, or in the mortgage backed securities market--the bad investments that brought the firm down. More than a year earlier ...
Continue readingThe bailout makes a move towards transparency
Today, in a huge win for transparency, the U.S. Court of Appeals in Manhattan ruled that the Federal Reserve Board must disclose records containing information about how it intervened to bail out banks during the financial crisis.
Since Bloomberg News filed the lawsuit in November of 2008, the Fed has claimed that if the information is released it could do more harm to the already weakened banks by stigmatizing them, thus hurting their ability to compete.
Supporters of Bloomberg’s lawsuit say the public has the right to know where their money is going. These records tell which ...
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GM, Chrysler to cut 3,000 campaign contributors
...er...dealers:
General Motors Corp and Chrysler aim to drop as many as 3,000 U.S. dealers and are expected to begin sending notifications as early as Thursday, three people briefed on the still developing plans said.GM, facing a U.S. government-imposed deadline of June 1 to restructure or file for bankruptcy, is expected to send termination notices to up to 2,000 dealers -- a third of its roughly 6,000 U.S. dealers, the sources told Reuters.
Chrysler, which filed for bankruptcy on April 30, will also tell up to 1,000 of its 3,189 U ...
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The unbearable opacity of TARP: Government agencies can’t tell us who’s in charge
The new report to Congress from SIGTARP -- the Special Inspector General for the Troubled Asset Relief Program -- begins by noting that TARP has evolved into "12 separate, but often interrelated, programs involving government and private funds of up to almost $3 trillion" of an "unprecedented scope, scale, and complexity." The report highlighted the possibilities of fraud and conflicts on interest in the bailout process and calls for better disclosure. We continue to find that even some of the most elementary details about the program -- like who is actually managing distribution of the bailout money to financial institutions -- is still shrouded ...
Continue readingBailout Watch debuts from Open the Government
File this one under useful tools -- our friends at Open the Government have launched Bailout Watch, a compendium of resources on TARP, Treasury, the Federal Reserve, and other places. I like the Expert Exchange page.
(Full disclosure: I sit on Open
Continue readingWho’s manning the TARP desk?
Less than half a dozen people are responsible for making the final decisions about which banks get part of the $700 billion in bailout money available through the Troubled Asset Relief Program, according to Department of Treasury officials. In response to a Freedom of Information Act request made by the Sunlight Foundation in January for the members of the TARP Investment Committee, a FOIA officer recently responded with just four names, including Assistant Secretary, Neel Kashkari; Chief Investment Officer, James Lambright; Acting Assistant Secretary for Financial Markets, Karthik Ramanathan and Acting Assistant Secretary for Economic Policy, Ralph Monaco, all holdovers ...
Continue readingK Street Boom: At least 1,699 new clients in 2009
Lobbying firms and special interests have filed nearly 1,700 new registration forms so far in the first quarter of 2009, according to a review of lobbying disclosure forms available online at the Senate Office of Public Records. As the federal government pumps up spending and intervenes in the troubled financial markets, K Street firms appear to have had no shortage of new business.
Our first pass at a database of the registrations shows that some of the financial firms that have received funding under the Troubled Asset Relief Program including Citigroup, JP Morgan Chase & Co., Goldman Sachs and Fifth ...
Continue readingBloomberg: Dodd faces campaign cash shortage
Kristin Jensen and Jonathan D. Salant report that Sen. Christopher Dodd is facing a cash crunch as he gears up for his reelection bid:
The Democrat has less than half the campaign cash he had at a comparable point in his last re-election bid, when he faced far fewer hurdles. Last year, he emptied an account built up largely through financial-company employees' donations to pay for a presidential run; now, he has to replenish his coffers even as the firms his panel regulates struggle with losses and back away from their one-time champion turned critic....Dodd began the year with ...
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A trillion here, a trillion there…
"History teaches us that an outlay of so much money in such a short period of time will inevitably attract those seeking to profit criminally," the Hill quotes Neil Barofsky, the Special Inspector General for the Troubled Asset Relief Program, saying.
It will also attract lobbyists, the members of Congress they enlist in their causes, special interests and others seeking to profit legally from the funds.
Via Instapundit.
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