- Aid plan solves Greece’s near-term funding woes
- Light At the End of the Bailout Tunnel
- AIG, Goldman Unwind Soured Trades
- UBS Hopes Big Profit Will Lift Client Confidence
- NY state sees “deep well” of UBS client tax cases
- U.S. Faults Regulators Over a Bank
- Pimco Says Investors to Hold Down U.S. Mortgage Rates
- Committee Reluctant to Mark End of Recession
Aid plan solves Greece’s near-term funding woes – MarketWatch
The weekend pledge by euro-zone leaders to provide Greece with 30 billion euros ($40.3 billion) in loans should ensure Athens can meet its near-term funding needs, economists said Monday, triggering a relief rally for the euro as well as hard-hit Greek banks and government bonds.
“The deal still needs unanimous E.U. backing before it is made operational, so we are not there yet but at least we know how the plumbing looks like if Greece struggles to roll-over short and longer term funding,” said Kenneth Broux, senior market economist at Lloyds TSB…..
Light At the End of the Bailout Tunnel – WSJ
As momentum grows at companies that looked like zombies just a few months ago to repay taxpayers for lifelines they got during the financial crisis, the projected cost of the bailout is shrinking to just a fraction of previous estimates. Treasury Department officials say the tab is likely to reach $89 billion, which includes the Troubled Asset Relief Program, capital injections into Fannie Mae and Freddie Mac, loan guarantees by the Federal Housing Administration and Federal Reserve moves such as buying mortgage-backed securities and propping up the commercial-paper market…..
AIG, Goldman Unwind Soured Trades – WSJ
The derivatives unit of American International Group Inc. has unwound most of its soured mortgage trades with Goldman Sachs Group Inc. still left after the insurer was bailed out by the U.S. government in 2008, according to people familiar with the matter.
The move by AIG Financial Products to terminate credit-default swaps insuring about $3 billion of mortgage-asset pools arranged by Goldman caused AIG to realize a $1.5 billion to $2 billion loss last year, the people said. But the insurer is no longer exposed to declines in the value of these asset pools, called “Abacus,” which could have forced AIG to make payouts upon defaults or triggered a costly collateral call…..
UBS Hopes Big Profit Will Lift Client Confidence – NY Times
UBS reported Monday that pretax profit in the first quarter was “at least” $2.4 billion, the highest in more than two years, after a recovery of its debt trading business.
Switzerland’s largest bank also said that net withdrawals from its wealth management units were slowing, as the repercussions from big losses during the credit crisis — and the bank’s agreement to release some client data to U.S. tax authorities — abate…..
NY state sees “deep well” of UBS client tax cases – Reuters
New York state could glean considerable sums from UBS clients who have evaded taxes by hiding money in offshore accounts once the federal government starts handing over its data to the states, a New York state tax official said.
“That’s really a deep well and I expect we’ll be digging in that well for some time,” William Comiskey, New York State Tax Department’s Deputy Commissioner for enforcement, told Reuters by telephone on Friday…..
U.S. Faults Regulators Over a Bank – NY Times
Regulators failed for years to properly supervise the giant savings and loan Washington Mutual, even as the company wobbled under the weight of risky subprime mortgages, a federal investigation has concluded.
The two agencies that oversaw Washington Mutual, the investigation found, feuded so much that they could not even agree to deem the company “unsafe and unsound” until Sept. 18, 2008…..
The report, prepared by the inspectors general for the Treasury Department and the Federal Deposit Insurance Corporation, is expected to be released Friday. A draft was obtained by The New York Times. The release coincides with hearings this week by the Senate subcommittee on investigations, which is treating Washington Mutual as a case history of the financial crisis…..
Pimco Says Investors to Hold Down U.S. Mortgage Rates – Bloomberg
Investor demand for mortgage-backed securities will keep U.S. home-loan rates down after the Federal Reserve ended its purchases of the debt, said Pacific Investment Management Co., manager of the world’s biggest bond fund.
The Fed’s unprecedented program to buy $1.25 trillion of the securities that guide home-loan costs stopped U.S. housing prices from falling, Scott Simon, who is in charge of investing in the notes at Pimco, wrote on the company’s Web site. Pimco is among the fund companies that sold mortgage bonds to the Fed, and many money managers began 2010 “underweight” these assets, the report said.
“If and when we see mortgages cheapen, we expect to see private institutions stepping in to buy,” Simon said. “Lower- priced homes bottomed last year. Higher-priced homes should bottom later this year.”….
Committee Reluctant to Mark End of Recession – Wall Street Journal
The committee of academic economists that dates the beginning and end of recessions said it isn’t ready to put an end date on the recession that began in December 2007.
However, Corzine is unsure about elements of the proposed legislation that are based on rules devised by Paul Volcker, one of President Obama’s senior economic aides,
The National Bureau of Economic Research’s Business Cycle Dating Committee, which met Friday, said, “Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature.”….
Tags: AIG, Bailouts, Economy, Goldman Sachs, Greece, New York, Pimco, recession, Sovereign debt, Taxes, UBS, Washington Mutual
