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Newsroom
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BAIR'S FDIC IS DOWN TO ITS LAST $10.4B |
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BAIR'S FDIC IS DOWN TO ITS LAST $10.4B
MARK DeCAMBRE
Friday, Aug 28, 2009
It's the case of the incredible shrinking Bair. As the Federal Deposit Insurance Corp.'s depositor insurance fund to shutter failed banks shrinks, so, too, has the political clout of its chairman, Sheila Bair. Plagued by waves of bank failures, the FDIC, which guarantees bank deposits, has a mere $10.4 billion left in its coffers to backstop future losses -- the lowest level of funding the agency has seen since 1992, when it was battling the savings-and-loan crisis, according to a second-quarter public report.
It's troubling news considering many banking analysts predict that the FDIC may need nearly $70 billion over the next three years to rescue failed banks. Indeed, on Wednesday the FDIC revised upward by one-third its list of troubled banks to 416, with assets totaling $299.8 billion. So far, the FDIC has had to shut down 81 banks.
But even more disheartening for Bair is that she finds herself exactly in the position she's been trying to avoid -- a nearly depleted bank-insurance fund and none of the extra political firepower she hoped to gather for the agency after tussling with Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke.
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Obama to raise 10-year deficit to $9 trillion |
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Obama to raise 10-year deficit to $9 trillion
Jeff Mason
Friday, Aug 21, 2009
WASHINGTON (Reuters) - The Obama administration will raise its 10-year budget deficit projection to approximately $9 trillion from $7.108 trillion in a report next week, a senior administration official told Reuters on Friday.
The higher deficit figure, based on updated economic data, brings the White House budget office into line with outside estimates and gives further fuel to President Barack Obama's opponents, who say his spending plans are too expensive in light of budget shortfalls.
The White House took heat for sticking with its $7.108 trillion forecast earlier this year after the Congressional Budget Office forecast that deficits between 2010 and 2019 would total $9.1 trillion.
The new forecasts are based on new data that reflect how severe the economic downturn was in the late fall of last year and the winter of this year," said the administration official, who is familiar with the budget mid-session review that is slated to be released next week.
"Our budget projections are now in line with the spring and summer projections that the Congressional Budget Office put out." The White House budget office will also lower its deficit forecast for this fiscal year, which ends September 30, to $1.58 trillion from $1.84 trillion next week after removing $250 billion set aside for bank bailouts.
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News Corp puts Dow Jones index business up for sale |
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News Corp puts Dow Jones index business up for sale
The Dow Jones Industrial Average, the US index of its top blue-chip companies, may be renamed after its owner put the indices business up for sale. Garry White
Sunday, Aug 23, 2009
 The Dow Jones Industrial Average could be renamed under a new owner.
The Wall Street Journal, which is also owned by Dow Jones publishing group, part of Rupert Murdoch's News Corporation, reported over the weekend that the company was in discussions with potential buyers of the business.
Goldman Sachs has been appointed to lead the talks.
News Corp bought Dow Jones for $5.7bn (£3.45bn) in 2007 but was recently forced to write down $2.8bn of the purchase price after its publishing operations were hit by the fall in advertising.
Potential buyers of the indices business have been named as Bloomberg, FTSE - which is a joint venture between the Financial Times Group and the London Stock Exchange, MSCI Barra, Russell, Thomson Reuters or McGraw-Hill - the owner of index provider Standard & Poor's.
The Wall Street Journal said negotiations are still at an early stage and the talks could also result in an arrangement other than an outright sale, such as a joint venture. As well as the famous industrial average, the company also compiles more than 130,000 indices and licences the data to market professionals.
Should any new acquirer decide to change or scrap any of the indices, it could have a strong effect of providers of exchange traded funds (ETFs) as many of these investment vehicles track specific Dow Jones indices.
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The Greenback Effect
WARREN E. BUFFETT
Tuesday, Aug 18, 2009
IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.
The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.
To be sure, we’ve been doing this for a reason I resoundingly applaud. Last fall, our financial system stood on the brink of a collapse that threatened a depression. The crisis required our government to display wisdom, courage and decisiveness. Fortunately, the Federal Reserve and key economic officials in both the Bush and Obama administrations responded more than ably to the need.
They made mistakes, of course. How could it have been otherwise when supposedly indestructible pillars of our economic structure were tumbling all around them? A meltdown, though, was avoided, with a gusher of federal money playing an essential role in the rescue.
The United States economy is now out of the emergency room and appears to be on a slow path to recovery. But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time.
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