Wall Street Folly

House lawmakers may retool President Barack Obama’s proposed $90 billion fee on the 50 biggest financial firms, a spokesman for the House Ways and Means Committee said.

One idea under discussion would base the fee on income rather than balance sheet calculations as proposed by Obama Jan. 14, said Matthew Beck, the committee spokesman.

“The committee expects to discuss a number of approaches to ensure American taxpayers are made whole for their extraordinary assistance to financial institutions in recent years,” Beck said in an e-mailed statement today. “A levy based on income is one approach that will be part of this broad discussion.”…..

Greece set off the crisis rattling the euro zone. Spain could determine whether the 16-nation currency stands or falls.

The euro zone’s No. 4 economy, Spain has an unemployment rate of 19%, a deflating housing bubble, big debts and a gaping budget deficit. Its gross domestic product contracted 3.6% in 2009 and is expected to shrink again this year, leaving Spain in its deepest and longest recession in a half-century.

At the center of the crisis are millions of Spaniards like Olga Espejo. The 41-year-old lost her administrative job at a laboratory in Madrid, then found a temporary post replacing someone on sick leave—until that job was abolished. Her husband and her sister have also been laid off—all among the one in nine working Spaniards who have lost jobs in the past two years……

Two House hearings this week to probe Toyota’s handling of sudden, unintended acceleration in its vehicles also included sharp criticism of the National Highway Traffic Safety Administration. NHTSA, responsible for overseeing auto safety, was faulted for failing in its duties in more than 60 statements by members of Congress, Toyota drivers and motor safety experts.

NHTSA’s role in the crisis will be the focus of two hearings next week in the Senate Commerce, Science and Transportation Committee.

“Toyota had three responses: First, blame the driver. Second, blame the floor mat. Third, blame a sticky gas pedal. And NHTSA — without doing any meaningful independent review — accepted Toyota’s explanations . . . Carmakers have entered the electronics era, but NHTSA seems stuck in a mechanical mind-set.”….

The Securities and Exchange Commission enacted new restrictions on short selling on Wednesday aimed at restoring investor confidence by preventing speculators from pouncing on stocks already in a tailspin.

The rules, which were approved in a 3 to 2 party-line vote, come as the agency has faced intense pressure from lawmakers and investors to crack down on the practice, which some on Wall Street have blamed for crashing the stock values of major financial companies during the 2008 market crisis……

Fed chief Bernanke expects extended hold on interest rates - Washington Post

Expect ultra-low interest rates from the Federal Reserve for some time to come, Chairman Ben S. Bernanke said Wednesday.

Last week, the Fed surprised some in financial markets by raising the discount rate, at which banks take out emergency loans, by a quarter-percentage point. The Fed made clear in its Feb. 18 statement — and in subsequent speeches by several officials — that the move was neither expected to increase borrowing costs for the public nor meant to presage increases in other interest rates……

Hummer Faces Shutdown After Chinese Sale Collapses - NY Times

Hummer, the off-road vehicle that once symbolized America’s love for hulking SUVs, faces a shutdown after its sale to a Chinese heavy equipment maker collapsed.

Sichuan Tengzhong Heavy Industrial Machines Co. said Wednesday it pulled out of the deal to buy the company from General Motors Co. Tengzhong failed to get clearance from Chinese regulators within the proposed timeframe for the sale, the Chinese manufacturer said…..

GM said it will continue to honor existing Hummer warranties.

Tags: Autos, Banks, Barack Obama, Ben Bernanke, Euro, Fed, Greece, Interest Rates, Politics, SEC, Short selling, Spain, Toyota