- California misses budget deadline, readies “IOUs”
- Tepid offers for BofA asset manager
- Citi raises card rates on millions
- U.S. Plan to Sell TARP Warrants Will Favor Banks, Wilson Says
- Goldman Gotcha
- Nomura to buy Citi’s Japan trust bank for $196 mln
- Judge denies bail for Stanford
- Fed’s Yellen Says Economy May Be Poised for Recovery
- Corporate Bonds Show Lehman Doesn’t Matter With 9.2% Return
- SEC’s Gaping Blind Spots Kept Madoff’s Misdeeds Out of Sight
- FDIC guidelines on private equity expected
- Bischoff poised to become Lloyds chairman
- Putnam Chairman Charles ‘Ed’ Haldeman stepping down
- G.M. Pushes the Case For Its Rebirth in Court
- Chrysler Slows Cash Losses After Restructuring, Marchionne Says
- Cities Grow at Suburbs’ Expense During Recession
- Wal-Mart Backs Plan for Employers to Offer Insurance
California’s lawmakers failed to agree on a balanced budget by the start of its new fiscal year on Wednesday morning, clearing the way to suspend payments owed to the state’s vendors and local agencies, who instead will get “IOU” notes promising payment.
The notes will mark the first time in 17 years the most populous U.S. state’s government will have to resort to the unusual and dramatic measure…..
Tepid offers for BofA asset manager – Financial Times
Bank of America’s asset management business is drawing lukewarm bids now that BlackRock, once its likeliest suitor, has opted to pay $13.5bn for Barclays Global Investors, according to people close to the matter.
BofA is hoping to reap at least $3bn from a sale of Columbia Management, those people say, but bids so far have come in closer to $2bn….
Citi raises card rates on millions – Financial Times
Citigroup has sharply increased interest rates on up to 15m US credit card accounts just months before curbs on such rises come into effect, in a move that could fuel political anger at the treatment of consumers by bailed-out banks.
People close to the situation said that Citi, which is about to cede a 34 per cent stake to the US government as part of its latest rescue, had upped rates on between 13m and 15m credit cards it co-brands with retailers such as Sears….
The Treasury’s plan to sell warrants back to banks that are leaving the U.S. bailout program undervalues the securities by $525 million, said a University of Louisiana professor who has studied the process.
The expected value of warrants for 10 of the largest banks that repaid their Troubled Asset Relief Plan funds earlier this year is $3.3 billion using the Treasury’s valuation approach, compared with $3.82 billion with a more conventional method, Linus Wilson, a finance professor in Lafayette, Louisiana, said in an interview…..
Goldman Gotcha – NY Post
It’s not often that a magazine with a photo of the Jonas Brothers on the cover roils one of the most successful firms on Wall Street.
But that’s exactly what’s happening at Goldman Sachs, where sources said senior executives are miffed at a 12-page story in the current issue of Rolling Stone that advances a long-circulated theory that the gold-plated firm has rigged the game on Wall Street.
Written by contributing editor Matt Taibbi, the article echoes a string of conspiracies centered on Goldman’s uncanny ability to make reams of cash in both good times and bad, highlighting its role in several past bubbles, including last year’s run-up in oil prices, the tech-sector boom and bust at the turn of the century and the current mortgage crisis….
Citigroup (C.N) agreed to sell its Japanese trust bank to a unit of Nomura Holdings (8604.T) for 19 billion yen ($196 million), as it looks to raise cash by exiting businesses in the world’s second-largest economy.
Nomura Trust and Banking Co said it would buy all shares in NikkoCiti Trust and Banking, creating one of the country’s largest trust banks with about 24 trillion yen in combined assets under trust.
Citigroup had been looking for a buyer for the trust bank since May after Mitsubishi UFJ Financial Group (8306.T), Japan’s largest bank, which had been in negotiations to buy the asset, pulled away from the deal…..
Judge denies bail for Stanford – Houston Chronicle
R. Allen Stanford won’t trade his orange prison-issue jumpsuit for street clothes anytime soon, a judge ruled Tuesday.
Senior U.S. District Judge David Hittner said Stanford must remain jailed, revoking a magistrate’s order last week granting him release on bail….
His lawyer, Dick DeGuerin, said Hittner’s decision will be taken to the 5th U.S. Circuit Court of Appeals. “We are very disappointed,” DeGuerin said….
Federal Reserve Bank of San Francisco President Janet Yellen said the U.S. economy may be about to “turn the corner” and reiterated her expectation that the recession will end later this year.
“Right now, we’re like a patient in intensive care whose condition has stabilized and whose fever is just starting to come down,” Yellen said in the text of a speech today in San Francisco. “We’re just completing the sixth quarter of recession, but the pace of decline has slowed markedly” and “confidence in the financial system is slowly returning.”……
Nowhere is the recovery in financial markets more evident than in corporate bonds, where Lehman Brothers Holdings Inc.’s bankruptcy is becoming a distant memory.
U.S. investment-grade company debt returned 9.2 percent in the first half of the year, outperforming Treasuries by 13.7 percentage points, the most on record, according to Merrill Lynch & Co. index data. Corporate bonds also did better than the Standard & Poor’s 500 Index of stocks, marking the first time since 2002 that the fixed-income securities outshined both Treasuries and equities….
SEC’s Gaping Blind Spots Kept Madoff’s Misdeeds Out of Sight – Washington Post
It will be the end of the summer before we learn how the Securities and Exchange Commission could have conducted at least five inquiries into Bernie Madoff’s activities over 16 years and never found a Ponzi scheme so huge that it robbed billionaires and bubbies of $13 billion and won Madoff a 150-year, all-expenses-paid trip to prison.
That’s when the commission’s inspector general will issue his report on the Madoff screwup. By then, Mary Schapiro, the SEC’s earnest and aggressive new chairman, will have done enough to restructure the agency, replace top management, expand the staff, step up enforcement and revive morale that she’ll be able to declare, with sufficient credibility, that it won’t happen again…
The Federal Deposit Insurance Corp is expected on Thursday to propose new guidelines for private-equity investors seeking to buy failed banks, a move that could see strict new rules imposed.
The agency will hold a board meeting to discuss its policy on investments in failed banks, according to a meeting agenda posted on Friday.
FDIC Chairman Sheila Bair has said she is comfortable with the private-equity deals the agency has struck so far for failed banks such as IndyMac and BankUnited, but said there needs to be a more structured process…..
Bischoff poised to become Lloyds chairman – Financial Times
Veteran British banker Sir Win Bischoff is being lined up as the next chairman of Lloyds Banking Group, according to people close to the process.
The 67-year-old former chairman of Citigroup, who stepped down from the role in February, has been asked by UK Financial Investments to take the Lloyds job and steer it through the process of integrating HBOS, which it rescued last autumn….
Putnam Investments said Charles “Ed” Haldeman Jr. will step down on Tuesday as chairman of the Boston investment company, ending a turbulent seven-year run at the firm.
Haldeman, 60, who joined Putnam in 2002 and ran it as president and chief executive from 2003 until last year, is the prime candidate for the chief executive post at government-backed mortgage company Freddie Mac (FRE.N), the Wall Street Journal reported, citing people familiar with the situation…..
General Motors headed to bankruptcy court on Tuesday to seek approval for the linchpin of its turnaround plan, the sale of its best assets to a new government-backed company.
General Motors headed to bankruptcy court on Tuesday to seek approval for the linchpin of its turnaround plan, the sale of its best assets to a new government-backed company…..
Chrysler Group LLC has stemmed the pace at which it uses cash after emerging from bankruptcy June 10 as a slimmer company, Chief Executive Officer Sergio Marchionne said.
Chrysler, which reorganized around what it considered its best assets and $6 billion in fresh financing from the U.S. and Canadian governments, went through $9.6 billion in cash in 2008…..
Cities Grow at Suburbs’ Expense During Recession – Wall Street Journal
U.S. cities that for years lost residents to the suburbs are holding onto their populations with a mix of people trapped in homes they can’t sell and those who prefer urban digs over more distant McMansions, according to Census data released Wednesday.
Growing cities are growing faster and shrinking cities are losing fewer people, reflecting a blend of choice and circumstance…..
Wal-Mart Stores Inc. said it supports legislation that would require large companies to offer health-care insurance to their workers, offering a boost to President Barack Obama’s plans to revamp the system.
“Not every business can make the same contribution, but everyone must make some contribution,” Wal-Mart, the largest U.S. private employer, said today in a letter to Obama. The Bentonville, Arkansas-based retailer distributed the letter via e-mail and said it favors “the strongest possible commitment to rein in health-care costs.”…