Posts tagged finance

Wealthy entities often hire Credit Suisse to manage their finances.

But Switzerland’s second biggest bank doesn’t just offer its clients the best legal solutions to their problems.

On May 19, Credit Suisse pleaded guilty to a count of conspiring to aid in tax evasion over decades (until 2009) and agreed to pay the largest criminal tax fine in U.S. history ($2.6 billion) for deceiving the Justice Department, the IRS, the Federal Reserve & the SEC.

It seems like a big number - until you realize the number of individual Americans involved - and the amount of money they’ve hoarded in Swiss banks. @Newsweek’s Lynnley Browning reports. Video produced in partnership with the @92ndstreety

Remember TARP? Turns out a pretty significant amount of those funds have yet to be repaid. 

The biggest banks that received billions from the government’s taxpayer-funded bailout of the financial system—J.P. Morgan Chase, Bank of America—have long since bought back the preferred shares they sold to the Treasury Department in late 2008 and early 2009. Add in dividend payments and the sale of warrants, and taxpayers have notched a profit on the Capital Purchase Program, the central component of TARP. The CPP disbursed just over $250 billion to financial institutions and has received $264 billion in return. (The latest TARP update can be seen here.)
But the TARP did not just feed the whales of the American banking system. It also dished out chum to the minnows, in disbursements of tens or hundreds of million dollars to smaller, regional banks. All told, 707 financial institutions participated in the program. Of those, 325 have either made only partial payments or haven’t made any payments at all. Together, they owe the government more than $11 billion.

The Banks That Still Owe TARP
[Photo: David McNew / Getty Images]

Remember TARP? Turns out a pretty significant amount of those funds have yet to be repaid

The biggest banks that received billions from the government’s taxpayer-funded bailout of the financial system—J.P. Morgan Chase, Bank of America—have long since bought back the preferred shares they sold to the Treasury Department in late 2008 and early 2009. Add in dividend payments and the sale of warrants, and taxpayers have notched a profit on the Capital Purchase Program, the central component of TARP. The CPP disbursed just over $250 billion to financial institutions and has received $264 billion in return. (The latest TARP update can be seen here.)

But the TARP did not just feed the whales of the American banking system. It also dished out chum to the minnows, in disbursements of tens or hundreds of million dollars to smaller, regional banks. All told, 707 financial institutions participated in the program. Of those, 325 have either made only partial payments or haven’t made any payments at all. Together, they owe the government more than $11 billion.

The Banks That Still Owe TARP

[Photo: David McNew / Getty Images]

Do you think Congress is responsible for this countries economic problems, or President Obama?

Can we say neither?

Sure, Congress & the administration have had a rough year trying to get along, but most of that hasn’t really affected our economic policy to a degree that it would really send us over the edge.

If you’re looking for someone to blame, we would start with the ten years prior at the Fed, then look at the banks and how they so poorly dealt with a rapidly collapsing housing market, and then Europe, which today is largely responsible for many of the fears and woes that things are going straight back to 2008. If you haven’t, we’d also recommend you listen to this This American Life podcast which really does a great job of explaining “The Giant Pool of Money.” It won a Peabody!

Golden Parachutes

A new study out today shows how top CEOs are walking away from their jobs with literally hundreds of millions of dollars—even after they do a crummy job. That’s wild. Gary Rivlin writes about the news today:

“You’re fired” can be the sweetest words these days when you’re the CEO of a publicly traded company. Sure, Leo Apotheker must have felt lousy when Hewlett-Packard dumped him as chief executive last September after less than a year on the job. But the sting of humiliation was no doubt softened by a $12 million cash payment the company gave him despite the lousy job he had done.

But now a new study released Wednesday shows that $12 million ain’t nothing in the age of the imperial CEO. GMI, a well-regarded research firm that monitors executive pay, looked at the largest severance packages ex-CEOs have received since the start of 2000.

To earn a spot in the top 20, a CEO would need to have received a golden parachute in excess of $100 million.

Read it on the Beast.

Nancy Cook goes inside the “Heir and Heiress camps;” boot camp type programs set up to let the wealthy mingle and speak honestly about their financial concerns without worrying about populist backlash.
In case you aren’t quite sure who these wealthy folks are, allow us to refer you to the “Who’s Rich and Who’s Super-Rich?" gallery.
And if that hasn’t sent you into a mild depression, there’s more on what it means to be rich now: Ben Adler asks “Would Raising Tax Cuts for the Rich Really Help the Economy?” and “Why Some Millionaires want their tax cuts to end.”

Nancy Cook goes inside the “Heir and Heiress camps;” boot camp type programs set up to let the wealthy mingle and speak honestly about their financial concerns without worrying about populist backlash.

In case you aren’t quite sure who these wealthy folks are, allow us to refer you to the “Who’s Rich and Who’s Super-Rich?" gallery.

And if that hasn’t sent you into a mild depression, there’s more on what it means to be rich now: Ben Adler asks “Would Raising Tax Cuts for the Rich Really Help the Economy?” and “Why Some Millionaires want their tax cuts to end.”

You won’t be hearing a lot this week about financial reform, even though Senate Banking Committee Chairman Chris Dodd announced his long-awaited bill on Monday, minus all Republican support. Instead, you will continue to hear mostly about health care, which by popular acclamation and the White House’s tacit assent has become the litmus test of success or failure for the Obama administration.

This is more than a little strange, since it wasn’t the lack of proper health care that almost destroyed the global economy a little over a year ago. It isn’t insufficient health care that’s threatening to disrupt the biggest single market in the Western world right now (the Eurozone). No, the culprit was, and is, an out-of-control financial system that is resisting all efforts at fundamental change. Yet the White House has permitted this truly global challenge to be championed by a handful of obscure legislators on Capitol Hill and poorly resourced if gutsy regulators such as Gary Gensler, chairman of the Commodity Futures Trading Commission. Together, against Wall Street’s army of lobbyists, these outnumbered champions are mounting an offensive that presently looks about as promising as the Charge of the Light Brigade. And yet the big guns of the Obama administration—starting with the president himself—have been only sporadically engaged.