In White House meeting, Obama calls on banks to increase lending

 sourced from The Washington Post 

By Binyamin Appelbaum and Michael A. Fletcher

Washington Post Staff Writer
Tuesday, December 15, 2009

President Obama exhorted the nation’s biggest banks on Monday to make “extraordinary” efforts to increase lending, even as some of those firms are racing to distance themselves from government control.

The nation’s most powerful bankers sat in the Roosevelt Room at the White House and nodded as the president spoke, but some executives and industry officials said afterward that increasing lending is largely beyond their ability.

Meanwhile, Citigroup and Wells Fargo announced plans Monday to spend billions of dollars — not on lending, but to repay federal aid. Citigroup chief executive Vikram Pandit missed the White House meeting to rally investor support.

Bank executives say they itch to make profitable loans, as many as possible, but are struggling to find qualified borrowers. They also say that the administration is asking for increased lending even as it pursues financial reforms that will limit the ability of banks to make loans.

Some note that a recession caused by an orgy of lending must be solved in part through greater restraint.

Obama has come under increasing pressure to demonstrate his concern for the plight of Americans caught in a rising tide of joblessness, even as the larger economy appears headed to recovery. The White House portrayed Monday’s meeting as a chance for the president to channel the anger of Americans who think federal programs intended to revive the broader economy have succeeded only in restoring Wall Street’s profitability.

“America’s banks received extraordinary assistance from American taxpayers to rebuild their industry,” the president said after the meeting. “And now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.”

Obama added that he expects not just effort but “results.”

Some administration officials privately conceded that borrowing always declines during recessions, and that they are struggling to find effective ways of spurring new lending. Furthermore, the administration’s options continued to be constrained by the belief of many officials that meddling in the details of banking is counterproductive.

The administration also is surrendering a measure of leverage over the industry as banks repay federal aid provided under the Troubled Assets Relief Program — although officials are eager to shed the political baggage of aiding big Wall Street firms. With the announcements Monday by Citigroup and Wells Fargo that they would repay federal aid, all of the nine major banks that got money late last year will be on track to pay it back.

Filed under: banking sector, news, Newspapers, recession, Recession starts Friday 23rd January, The washington Post, USA, banking sector, banks, banks increase lending, Barack Obama, Billion $, Obama, recession, US, USA, White House, world, years

Recession 'may see 25m jobs lost'

The Organisation for Economic Co-operation and Development (OECD) says the global recession could cost 25 million people their jobs.

Mr Gurria says unemployment could rise substantially by next year

This is despite recent signs that economies of its 30 member countries may be starting to recover.

“A recovery is in sight, but it is likely to be modest for some time to come,” OECD chief Angel Gurria said.

Fifteen million jobs have been lost so far, and up to 10 million more could go by the end of 2010, the OECD said.

The unemployment rate across the 30 most industrialised nations in the OECD was 8.5% for July, the highest since World War II. It was 5.6% at the end of 2007.

Filed under: bbc, Unemployment, USA, 25m jobs lost, highest since World War II, recession, Unemployment, world unemployment

Bank of America faces bonus trial

The US regulator has confirmed it will sue Bank of America over charges that it misled investors about bonuses when it acquired Merrill Lynch.

Bank of America was among the largest recipients of the US bail-out

Bank of America saved Merrill from collapse at the height of the financial crisis, after saying no bonuses would be paid without shareholder approval.

But up to $5.8bn (£3.4bn) in bonuses were later authorised.

Separately, Bank of America announced several new measures to reduce its reliance on US aid.

It will pay $425m to cancel unused federal guarantees against losses at Merrill from government agencies, including the US Treasury.

Bank of America received a total of $45bn from the taxpayer-financed $700bn bail-out programme. The US government has a minority holding in the bank.

Filed under: banking sector, bbc, USA, bank of America, banking sector, banks, bbc, bonuses, business, capitalism, Merrill Lynch, US, Us Goverment, USA, world

Watch The BBC Last Days of the Lehman Brothers

Watch the documentry made by the BBC

Filed under: banking sector, bbc, economic depression, Great Depression, lehman brothers, recession, USA, banking, banking sector, banks, bbc, BBC 2, Brothers, business, capitalism, credit, credit crunch, downturn, Leham, lehman brothers, news, one year on, recession, September 11th, UK economy, US, USA

US jobless rate at 26-year high

US employers cut 216,000 jobs in August, pushing the unemployment rate up to 9.7%, a 26-year high, official figures show.

There are signs of improvement in the labour market

The unemployment rate rose after dipping to 9.4% in July but the Labor Department said the job loss figure was the smallest in a year.

Since the start of the recession in December 2007, the economy has shed 6.9 million jobs, the department said.

Jobs have been lost across manufacturing and service industries.

Total unemployment stands at 14.9 million.

Filed under: bbc, blog, news, USA, Barack Obama, bonuses, jobless rate, Unemployment, US, USA, world

More signs of US economic growth

US durable goods orders and new home sales both soared last month, the latest positive indications of the state of the world’s largest economy.

The ‘cash for clunkers’ deal proved popular

 

Orders for goods expected to last more than three years increased 4.9% in July, beating analyst expectations of a 3% gain, said the Commerce Department.

Durable goods orders were lifted by the popularity of the government’s “cash for clunkers” car scrappage scheme.

This helped US car orders rise 0.9%, recovering from June and May falls.

At the same time, the annual rate of sales of new US homes rose 9.6% last month, also ahead of market targets.

This was the biggest rise in sales of new houses since September last year.

Boeing boost

The increase in durable goods orders was led by the commercial aviation sector, which pushed total transportation equipment orders up 18%.

Filed under: bbc, USA, Barack Obama, bbc, Billion $, business, capitalism, cash for cars, consumer, Goverment, home sales, news, recovery, UK, US, US economic, US economic growth, USA

Senator Edward Kennedy dies at 77

link to BBC video

Veteran US Senator Edward Kennedy, the brother of former President John F Kennedy, has died at 77, after a long battle with a brain tumour.

He became a Democratic Massachusetts senator in 1962, replacing his brother when he resigned to become president, and was re-elected seven times.

Senator Kennedy had been a dominant force in liberal US politics for almost half a century.

Recently, he was an active supporter of President Barack Obama.

He has championed issues like healthcare and education.

Filed under: bbc, USA, 77, bbc, brain tumour, brother of John F Kennedy, Goverment, John F Kennedy, Kennedy, president, Senator Edward Kennedy, US, USA, world, years

US agrees Swiss tax deal over UBS

The US and Switzerland have signed an agreement designed to end a tax evasion dispute surrounding UBS’s US customers.

The Swiss government negotiated with the US on behalf of its largest bank

 

The Swiss banking giant will now give the US tax authorities the details of 4,450 accounts, US officials said.

Internal Revenue Service Commissioner Doug Shulman said the accounts held $18bn in assets at one time, and many have since been closed.

Hours after the deal was agreed the Swiss government said it was putting its 9% stake in UBS up for sale.

The US Justice Department had been originally seeking the names of 52,000 US customers with Swiss accounts. 

Filed under: banking sector, bbc, news, recession, USA, banking giant, banking sector, banks, bbc, business, consumer, downturn, economy, IRS, news, recession, Swiss, Switerland, tax deal, UBS, US, USA, world

25 American people to blame Financial Crisis

Full List

Blameworthy

(all names link to Wikipedia)

Angelo Mozilo

Phil Gramm

Alan Greenspan

Chris Cox

American Consumers *

Hank Paulson

Joe Cassano

Ian McCarthy *

Frank Raines

Kathleen Corbet

Dick Fuld

Marion and Herb Sandler

Bill Clinton

George W. Bush

Stan O’Neal

Wen Jiabao

David Lereah

John Devaney

Bernie Madoff

Lew Ranieri

Burton Jablin *

Fred Goodwin

Sandy Weill

David Oddsson

Jimmy Cayne

sourced from Time

* information not found on Wikipedia

this information has been created by Time -CNN

and does not represent the feeling of recession2009

Filed under: banking sector, USA, 1980s, 25 people to blame, banking sector, banks, business, CNN, consumer, downturn, financial, time, USA, wikipedia, years

How Americans Got into a Credit-Card Mess

By Barbara Kiviat Saturday, Aug. 08, 2009 sourced from CNN

Americans have a long, sordid history with borrowed money. In Collateral Damaged: The Marketing of Consumer Debt to America, Charles Geisst, a professor of finance at Manhattan College, takes us through the centuries to explain how we wound up at our most recent — and spectacular — credit bubble. TIME’s Barbara Kiviat spoke with him.

You write that one of the major myths about American society is that we used to be prudent with our money and only recently did we go astray. What’s the real history?
Americans are speculative people. During and after the Civil War, for instance, there was a lot of stock market and commodities speculation — people trying to make a quick buck. But it was only when financial institutions picked up on that and provided the methods whereby you could buy now and pay later — that very simple concept — that things started to change structurally. Now Americans are more highly leveraged than they were in the past.

Which makes our most recent downturn worse?
Yes, absolutely. We’re out of proportion with our amount of personal debt. A good number of people are in debt to the point where they may not ever be able to pay their way out.

Why didn’t lenders better capitalize on our speculative bent sooner?
Our banking system was never national. In fact, it wasn’t even retail in the 19th or early 20th century. The banks that were capable of doing the most lending to individuals didn’t actually do it. We had to wait until Bank of America, for instance, got into business and a lot of the companies like Household Finance that started making consumer loans for this thing to actually warm up.

read full article

Filed under: banking sector, USA, American, bank of America, banking sector, banks, Barack Obama, business, downturn, economics, news, recession, USA, world, years