Wall Street Folly

U.S. stocks will probably fall this year, according to investor Marc Faber, and the country’s economy won’t face a “normal” recovery as job cuts dent consumer spending, said CLSA Asia-Pacific Markets’ Christopher Wood.

Faber advised investors to buy U.S. stocks on March 9, 2009, when the Standard & Poor’s 500 Index reached its lowest level since 1996. The gauge rallied 64 percent since then to 1,109.17 and the Dow Jones Industrial Average gained 59 percent as more than $700 billion in government spending boosted the economy…..

Timothy Geithner’s role in calming the financial crisis landed him the coveted job of Treasury secretary last year. That same résumé is now dogging him.

In his next test, Mr. Geithner will find out this week how lawmakers are treating one of his main goals—revamping the nation’s financial regulations—when Senate Banking Committee Chairman Chris Dodd unveils his new bill. In Washington, where perception can take on the status of fact, the political woes facing Mr. Geithner are diminishing his authority.

His dilemma: The bank rescues he helped engineer averted economic collapse. Yet to some lawmakers, Mr. Geithner looks weak. His association with unpopular financial bailouts has become an albatross. His neutral rhetoric on bankers’ bonuses—the fat payouts are “very hard for people to understand,” he recently told CNBC—spurs talk that he coddles Wall Street…..

AIG Death Spiral Ends as Bailout Support Brings Stable Revenue – Bloomberg

American International Group Inc., the troubled financial firm that threatened to bring down the U.S. economy, is showing stable revenue for its insurance units and improving its ability to repay taxpayers 17 months after a bailout that swelled to $182.3 billion.

AIG property-casualty businesses, contributing more than a third of the company’s revenue, posted sales increases in three straight quarters last year after plunging 23 percent following the company’s near-death experience in September 2008. Life insurance and retirement-products sales, AIG’s other main operations, rose for the first time since the bailout in the three months ended September 2009……

Alvarez & Marsal Gets $233 Million for Advising Bankrupt Lehman – Bloomberg

Alvarez & Marsal LLC, the liquidator of bankrupt Lehman Brothers Holdings Inc., has collected $233 million in fees for “interim management” over 16 months, according to a regulatory filing.

The restructuring firm, which provided Lehman with its current chief executive officer, Bryan Marsal, has made more than any other adviser of the investment bank since the September 2008 bankruptcy filing, according to a Feb. 19 report with the Securities and Exchange Commission. Lehman said it paid all its lawyers and advisers $641.9 million through January…..

Tags: AIG, Alvarez & Marsal, Bankruptcy, Bears, Fees, Lehman Brothers, Marc Faber, Tim Geithner, U.S. Treasury; Bailout