Economic Glance
The Bush administration will announce a plan to rescue frozen credit markets that includes spending about half of a total of $250 billion for preferred shares of nine major banks, people briefed on the matter said.
The companies are Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley, State Street Corp., and Bank of New York Mellon Corp., the people said. One of the people also said Merrill Lynch & Co. will receive an investment.
U.S. Treasury Said to Invest in Nine Major U.S. Banks
Treasury to Invest in `Healthy' Banks, Kashkari Says
Neel Kashkari, the U.S. Treasury official overseeing the $700 billion rescue of the financial system, said government equity injections will be aimed at ``healthy'' firms.
``We are designing a standardized program to purchase equity in a broad array of financial institutions,'' Kashkari, who heads the department's Troubled Asset Relief Program, said in a speech in Washington. ``The equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions.''
U.S. officials are hurrying to address frozen credit markets that led France, Germany, Spain, the Netherlands and Austria to agree to commit $1.8 trillion to guarantee interbank loans and take equity stakes in banks. Buying shares of financial institutions has become the latest focus of Treasury Secretary Henry Paulson's rescue plan.
``While the U.S. tends to shy away from nationalizing or even partially nationalizing its financial institutions, it would appear that it has no choice but to follow suit,'' Win Thin, a senior currency analyst with Brown Brothers Harriman & Co. in New York, said in a research note today.
TVNL Comment: As predicted...this is a takeover, not a rescue. This is a wealth undistribution.
Private sector loans, not Fannie or Freddie, triggered crisis
As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.
Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.
US debt clock runs out of digits
The US government's debts have ballooned so badly the National Debt Clock in New York has run out of digits to record the spiralling figure.
The digital counter marks the national debt level, but when that passed the $10 trillion point last month, the sign could not display the full amount.
Is the Federal Reserve Engaged in Acts of Economic Warfare Against America?
In 1942, German intelligence officers rounded up skilled Jewish prisoners and launched Operation Bernhardt, a clever scheme designed to counterfeit hundreds of millions of dollars worth of British Pounds and destroy the British economy by flooding it with counterfeit money. Located in the Sachsenhausen concentration camp, Operation Bernhardt was, even by modern standards, a runaway success that resulted in the creation of forged bank notes worth 132 million British Pounds.
Bank of America agrees to modify mortgages
Facing a lawsuit over deceptive mortgage practices, Bank of America has agreed to modify tens of thousands of loans to keep people in Illinois, Washington and nine other states from losing their homes, the Illinois attorney general's office said Sunday.
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