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Bailout

The Takeaway

This Week's Agenda: Irene Aftermath, Unemployment, Greece's Bailout

Monday, August 29, 2011

It's Monday morning, which means it's time to take a look at what's on the agenda for the week ahead. President Obama will be preparing his Labor Day speech on the economy this week, and after after Hurricane Irene's chaotic visit to the East Coast, leaving billions of dollars in damage behind, he may have to rethink what he's going to say. Irene hit at a time when the U.S. economy is continuing to slump and millions are jobless. Unemployment figures will be out on Friday, and the Congressional Budget Office is predicting that employment will not return to normal levels until 2017. Meanwhile Greece, may not receive a bailout from the European Union, as Finland hesitates to approve it. All EU members must approve the bailout, for it to go into effect.

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The Takeaway

Euro Zone Reaches Deal to Bail Out Greece

Friday, July 22, 2011

European leaders came to an agreement yesterday to help keep Greece and the rest of the euro zone from falling further into financial crisis. Greece will receive a second bailout, in the amount of 109 billion euros, or $157 billion. The move by the euro zone comes as Ireland and Portugal are still teetering on economic turmoil. The European Financial Stability Facility, the euro zone's rescue fund, will be given broad new powers to assist countries that have not yet been bailed out. It is unclear how French and German citizens, who have opposed any bailout, will react to the deal.

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The Takeaway

Greece Passes Austerity Meaures Vote

Wednesday, June 29, 2011

This morning, the Greek Parliament voted in favor of a package of austerity measures that includes tax hikes and spending cuts. The vote comes despite two days of protests in Athens, where polls say 80 percent of Greeks were against the measures. The package is an effort to avoid defaulting via a second bailout from the European Union. The vote is being met with violence on the streets of Athens.

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The Takeaway

As Greeks Strike, Parliament Remains Calm

Wednesday, June 29, 2011

Greece is preparing this morning to vote on drastic austerity measures that have sparked nationwide strikes and rioting in the country's capital, Athens. 5,000 police were deployed to Athens over the past two days, to combat protesters with tear gas. Meanwhile, the climate inside Parliament is calm as they prepare to vote. If the austerity measures pass, Greece will be able to obtain a second bail-out from the European Union, and avoid defaulting. 

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The Takeaway

Defaulting May Not Be A Greek Tragedy

Wednesday, June 29, 2011

Demonstrators continue to protest in the streets of Athens today, amid violence and tear gas. Many Greeks are not happy with their government's upcoming vote on austerity measures, which would mean higher taxes and many spending cuts. If Greece's government does not pass the austerity measures, though, they would be at risk of not receiving a €12 billion bail-out, and becoming the first eurozone country to default.

 

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The Takeaway

Reports from Athens, In Anticipation of Parliament's Vote

Wednesday, June 29, 2011

As we await the news of the Greek Parliament's vote in Athens on the austerity measures, reporters in the area give us an update on the climate there. 

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The Takeaway

This Week's Agenda: Afghanistan, Debt, Republicans

Monday, June 27, 2011

Robert Gates will step down as Secretary of Defense this week, with Leon Panetta taking over. Panetta will have a lot on his plate, starting with the start of U.S. troops withdrawing from Afghanistan later this week. Noel King, managing producer for The Takeaway, looks at what obstacles are in store for Panetta as he begins his reign as Defense Secretary. 

President Obama will meet with Congressional leaders to try and come to an agreement on raising the debt ceiling, or face going into default. Charlie Herman, business and economics editor for The Takeaway and WNYC, looks at the economic effects this on-going debate could have if a conclusion is not reached soon. 

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The Takeaway

Was the Auto Bailout Worth the Money?

Friday, June 03, 2011

President Obama will be speaking with workers at a Chrysler plant in Toledo, Ohio, on Friday. The visit comes on the back of a report released showing the government’s $80 billion auto bailout will only cost taxpayers about $14 billion at the end of the day – far less than originally expected. The report also shows the American car industry has created 115,000 jobs since the government stepped in. The president will be selling this as a big success story – but is it?

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The Takeaway

Citibank as a Government Entity?

Wednesday, April 13, 2011

Many of the big banks received huge bailouts from the government during the great recession. If they faced a crisis again, what would stop them from expecting another bailout the next time around? That question has led one Fed official, Thomas Hoenig, president of the Kansas City Fed, to raise the issue of whether big banks should be reclassified as government sponsored entities, kind of like Fannie Mae and Freddie Mac.

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The Takeaway

In Crisis, Federal Reserve Bailed Out Failing Banks

Tuesday, April 05, 2011

During the financial crisis, the Federal Reserve got a lot of flack for handing out big bailouts to major banks like Citibank and JP Morgan Chase, which were deemed "too big to fail." But it turns out that many more banks received funds through the Federal Reserve Bank's so-called “discount window” policy, including investment banks and foreign banks. The names of those banks were released last week, after the Supreme Court ruled in February that under the Freedom of Information Act, the Fed had to make the names and amounts known.

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The Takeaway

Fed Reveals Billions in Bailout Loans during Financial Crisis

Thursday, December 02, 2010

Most of the companies who received money from the TARP bailout funds have been public knowledge ... but yesterday, the Fed revealed that a slate of prominent American companies used billions of dollars in bailout loans during the height of the financial crisis, including such corporate pillars as GE, Verizon and McDonalds, to name a few.  We speak with New York Times Wall Street and finance reporter Louise Story for the program's details. 

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The Takeaway

How to Save Ireland: Bailout, or a Haircut for Lenders?

Tuesday, November 23, 2010

The International Monetary Fund’s $140 billion bailout for Ireland has been set in motion, but some economists are talking about a better option for the Emerald Isle: defaulting on their debt. What’s so bad about asking investors to suffer the consequences of over lending?

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The Takeaway

Ireland Accepts Bailout, Concerns for Euro Zone Grow

Monday, November 22, 2010

Ireland's bailout moves forward, as the country takes a $140 billion from the International Monetary Fund. The move has postponed some looming problems for Portugal, which the E.U. also worries is in need of large-scale financial help. But questions remain about whether the bailout of Ireland will create the necessary stability in the Euro single currency zone or not. The BBC's Theo Leggett joins us for more.  

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WNYC News

General Motors Returns to the New York Stock Exchange

Thursday, November 18, 2010

WNYC

General Motors’ public stock offering breathed new life into the automaker on Thursday, after it had been beleaguered by debt and rescued by the government during the recession.

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Transportation Nation

GM IPO Details Emerge

Tuesday, November 02, 2010

(Alex Goldmark, Transportation Nation) General Motors post-bailout, post-bankruptcy IPO is expected to raise between $8-$13 billion and transform the U.S. government's role from majority owner to minority shareholder.  But the federal government would still be the largest owner.

GM is expected to file a final registration for the IPO on Wednesday, the same day they release quarterly earnings (and are expected to announce they are profitable for the third straight quarter). That's when we'll officially know how much they are trying to raise, as well as the exact share price. Some hints have already leaked out, though, and early reports are that shares will likely be priced at $26 to $29--considerably higher than earlier estimates. And at that price, AP estimates the total company valuation will be around $46 billion, which is similar to Ford.

During the bailout, U.S. taxpayers ponied up $50 billion to save the company and has so far gotten about $10 billion back. GM will use the money from the IPO to pay off debt, not raise operating capital. Initially, GM will only be offering a portion of their shares. The rest will come in subsequent offerings at a higher price, GM and the U.S. Government are hoping.

According to multiple reports, GM executives will now begin meeting with major investors --like foreign-based sovereign wealth funds, including those based in Kuwait and China.

For a breakdown of likely ownership stakes see the Detroit Bureau.

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Transportation Nation

GM to Expand Production, Pay Back More of Bailout Money

Thursday, October 28, 2010

(From WDET—Detroit, and Transportation Nation) General Motors will build a new small Cadillac at its Lansing Grand River plant.  It will be built on the same platform as the Cadillac CTS, which was named Motor Trend’s car of the year in 2008.

Motor Trend Detroit Editor Todd Lassa says the new ATS will be designed to compete with the best small luxury cars like the Mercedes-Benz C- Class and the B-M-W 3 series. “The Cadillac ATS, I think, will do well against the Mercedes C-Class.  The BMW 3 series is the car everyone wishes they could build.  Cadillac wishes it could build that," he says.

GM CEO Dan Akerson tells WDET his company will invest $190 million in the Grand River plant to make the ATS.  That will mean the addition of a second shift, creating 600 jobs.  The car is set to launch in 2012.

Bailout Payback

In other GM news, the Department of the Treasury announced they have approved the buyback of $2.1 billion in preferred stock from GM. This brings the total repayment of government bailout money up to $9.5 billion of the $49.5 billion total.

Here's the official announcement from GM and from Treasury. They are only slightly different in what they highlight.

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Transportation Nation

Election Report: Obama bails out GM, Dems tanking in Michigan.....

Tuesday, October 19, 2010

Luz Guardarrama voted Obama in 2008, but says shes "tired" of politics and will stay home this year. Nothing particularly impresses her about the Obama tenure, not even the bailout of the auto industry.

(Jackson, Michigan - Andrea Bernstein, Transportation Nation) None of the bailouts have made Americans particularly happy. TARP was a Bush initiative -- supported by Obama, but not of his making. The stimulus was a series of internal compromises which gave a huge part of the spending control to Congress. But the GM bailout was an Obama plan, and one the White House considers an almost unqualified success. "The contrast between where these companies" -- Chrysler and GM -- " and the auto industry are today, and the situation President Obama faced when he took office are stark," the White House wrote in a report of April of this year.

In careful language, the analysis says some 1.1 million jobs had been at risk, but that the bailout had enabled the car companies to stay afloat, restructure, and, in GM's case, repay their loan 5 years ahead of schedule. Obama called the bailout a "success," and analysts agreed.

Writing in Bloomberg Business Week, David Welch noted:

"So far, it is tough to argue that the bailout hasn’t worked. GM is in the black, having reported an $865 million profit in the first quarter with black ink looking likely for the rest of the year.... Chrysler is at least making an operating profit, which puts the company in much better shape than most analysts thought it would be a year ago."

So, you'd think this would be a big selling point for the White House, right? A political plus? Dems should be cruising in Michigan -- if nowhere else? You'd be wrong.

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The Takeaway

AIG and Federal Government Reach Deal on TARP Repayment

Friday, October 01, 2010

Insurance giant AIG has reached an agreement and a plan with the federal government to pay back some $70 billion given to the company in 2008 as part of the Troubled Asset Relief Program, just before their two-year deadline on October 3. Under the agreement, the Federal Reserve Bank of New York will remove it's ties to American International Group, and the Treasury will increase it's stake to 92 percent, gradually bringing the shares it owns from preferred to public to transfer the control back out of government hands. But is the public buying? Louise Story gives us the latest.

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The Washington Report

WQXR's The Washington Report

Monday, August 02, 2010

David Sanger, of The NYT, on the politics of the auto bailout and the fall-out of last week's Wiki-Leaks.

The Leonard Lopate Show

Lending a Hand to Fannie Mae and Freddie Mac

Monday, May 17, 2010

Wall Street Journal reporter Nick Timiraos explains what’s happened to the government-sponsored mortgage giants Fannie Mae and Freddie Mac since the fall of 2008, and why they continue to be so troubled.

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