Live Video: Bernanke and Bair testify before the FCIC
Live video of Thursday’s Financial Crisis Inquiry Commission testimony from Fed Chairman Ben Bernanke and Federal Deposit Insurance Corp Chairman Sheila Bair.
[This event has ended]
BoA hearing: class-action fodder?
Dennis Kucinich pointed out at a Congressional hearing Thursday that Merrill’s weekly losses in mid-November were greater than the losses in mid-December, and that Bank of America boss Ken Lewis got weekly updates on the investment bank’s losses. Lawmakers repeatedly said Lewis must have known much earlier than he claims about the heavy losses at Merrill, which lost $15.84 billion in the fourth quarter of last year.
That’s something that class action lawyers may latch on to, as they push their case over the Bank of America-Merrill Lynch deal, which hinges on what the bank disclosed and when.
Shareholders OK’d the deal on Dec. 5. Bank of America disclosed Merrill’s losses in January, after the deal closed. If shareholders knew of the losses before, the outcome could have been different.
Even just days before voting on the deal in December, shareholders appeared to doubt the likelihood of the merger going through on the original terms set in September. As of the close on Dec. 1, Merrill shares were still trading at an 8.3 percent discount to the Bank of America offer.
At the Congressional hearing Thursday, Lewis said Ben Bernanke and Hank Paulson did not tell him what to tell shareholders. He said decisions on what to disclose to shareholders is made by “our securities lawyers and our outside counsel.”
But under questioning he also agreed with lawmakers that there was pressure from the government to complete the deal despite growing losses at Merrill.
Clearly, Lewis was in a tough spot. But how would that play out in court?
Post Traumatic Stress Test Order
A week ago, when the Fed and Treasury mesmerized the financial world with the results of “stress tests” and capital-raising targets for banks, nobody spent much time asking “what if they can’t raise the money?” There was a sense that authorities had washed away enough uncertainty in the sector to satisfy investors. In short order, healthier institutions started raising capital. Those that didn’t need any stepped up efforts to rid themselves of onerous state support.
Bank of America shares are on a tear after the bank raised nearly $13.5 billion through a stock sale. Along with money it raised by selling part of its stake in China Construction Bank, this put Bank of America about half way to filling its stress-test gap.
But when Regions Financial, a large U.S. Southeast regional bank that was stress-tested, announced plans this morning to raise $1.25 billion through stock offerings — also about half of what federal regulators told it to raise — investors balked, sending its stock down more than 8 percent.
Just goes to show that not everybody can fail a stress test and impress shareholders with massive ownership dilution. Regions’ trouble may be that aside from selling stock, it has far less to offer than bigger banks in terms of asset sales to make shareholders feel better about doubling down. If nothing else, the market reaction could put a scent in the air that might interest an acquisition-minded lender needing exposure in the U.S. Southeast. If such a creature exists, it might find many more stressed-out lambs in the U.S. financial pasture.
GMAC, I mean Ally Bank can not raise money, they will call the Treasury, ask for a (many)few more billions. Why do we keep giving this worthless firm anything. Fold it. Many bank already availible to loan. . . Who cares, fake company, fake bankruptcy, fake about everything, makes me sick. Billions down a rathole.
Very, very frightening
If Frankenstein isn’t scary enough for you, the enterprising folks at benandhank.com have Hank Paulson and Ben Bernanke masks ready just in time for Halloween!
That’s right — for the low, low price of $79.90 and you can get a latex mask of “Evil Hank” and “Evil Ben“. If you’re looking for a Halloween costume, though, move fast — Bernanke masks are sold out and only a handful of Paulson masks remain.
For the more thrifty consumer, Forbes has posted printable masks for its list of the scariest people of 2008. The magazine has included the Presidential candidates on this year’s list, as well as Paulson, Bernanke, Dick Fuld and Jimmy Cayne.
And if you’re still at a loss for a costume for Friday — how about going as the U.S. economy? Not much seems much scarier these days.
I have had this rather unpleasant thought over the past two weeks or longer that the McCain-Palin ticket wins the election mainly because voters go into the booth, feel the Bradley issue, do not vote for Obama because he is a black man, negro or whatever term they mentally use, and that they vote for McCain simply for that one reason… however, to make up for having voted against Obama, the Democrat, they are still unsettled about the decision, harbor immense resentment against George Bush and the Republicans generally for wasting money and ruining the economy and banking system, so the voter pulls many more Democratic levers than s/he would have if their mind was not spinning in such a manner at that moment.
The result is an incredible surprise victory for McCain-Palin and moreover for George Bush, who will take absolutely full credit for their election success by pointing out not that the voter supported the McC-P ticket but was actually showing appreciation for Dubya and his good works over the past eight years: no other rhyme or reason will be accepted or acceptable.
So what will McCain-Palin say when Bush, the sponsor of their success, claims shared victory (credit given: Bush 80% or more, McCain-Palin 20% or less) and then offers graciously to be an active and ongoing part of the McC-P transition period of the first 1-2 years in the White House, which McC will accept graciously but move Dubya’s wardrobe and knick-nacks (cowboys hats, spurs, chainsaws, empty and full Jack Daniel’s bottles, etc.) out of the Presidential apartment when the lease is up on the January Innauguration date.
Then McC-P will go over to “the Hill” to meet with a Congress that is not only majority Democrat but super-heavily Democrat by number, quality and reason… and very angry and even worse totally adversarial and uncooperative and in a position to quash every Presidential attempt at anything, especially matters requiring money, for the next 4-8 years.
Now, “my friends” (as that little snit and Pengiun-man McC would say) this would be a very fine mess, and who loses but the people of America: big time and for a long time. I hope the American voter listens to the candidates carefully and votes both their head and their heart and not the colour of one candidate’s skin: there is too much to lose.
