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Bailout

The Takeaway

On the Trail of the TARP

Thursday, May 07, 2009

Try to imagine tracking $700 billion dollars as it moves out the doors of the United States Treasury Department and into the coffers of America's biggest banks. That's essentially the charge of our guest, Elizabeth Warren. Warren, the Gottlieb Professor of Law at Harvard University, is the Chairwoman of the Congressional Oversight Panel, which watches where the TARP money goes. When President Obama talks about transparency, she's the one who helps make it happen. She joins The Takeaway in advance of a new TARP report due out today.

For more from Elizabeth Warren, click here for her interview on personal finance

Which banks will need more money? See our report card

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The Takeaway

Paul Krugman on lessons from the financial crisis

Wednesday, April 29, 2009

Paul Krugman joins The Takeaway today with lessons to be learned from the latest financial crisis, a topic he has covered in his latest book The Return of Depression Economics and the Crisis of 2008. Krugman is a Princeton University economics and international affairs professor, the 2008 Nobel Prize winner, and columnistat our partner The New York Times.

To hear Paul Krugman's conversation with The Takeaway from yesterday, click here.

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The Takeaway

Rep. Thaddeus McCotter's take on the auto bailout

Wednesday, April 29, 2009

GM and Chrysler are in the throes of negotiations to avoid bankruptcy. GM’s CEO announced on Monday that the company will cut 21,000 more jobs, close 40% of its dealerships, and discontinue the Pontiac brand. Republican Congressman Thaddeus McCotter represents Michigan’s 11th district, west of Detroit. Unemployment is over 13% in his district, and now it looks like things are going to get worse. He join The Takeaway to discuss his perspective on the auto bailout and how he hopes the negotiations will pan out.
"I continue to support keeping as many people employed in Michigan and manufacturing as we possibly can. The alternative to not having this deal goes through is a bankruptcy liquidation."
—Rep. Thaddeus McCotter on a merger between Chrysler and Fiat

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The Takeaway

Bank bailout fund dwindles to a (paltry) $109 billion

Wednesday, April 22, 2009

What can you buy for a $109 billion? That's the question the U.S. Treasury Department is asking itself as the TARP bank bailout fund has become a shell of its once robust self. The fund started out with $700 billion and managed to buy the solvency of the financial system (and a few AIG bonuses), so what should they do with the remaining money? 58 space shuttles, 500 million iPhones, or 1.7 million Hummers? Obviously The Takeaway has a few ideas.

Dr. Evil had a plan for what to do with $100 billion:

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The Takeaway

From the frontlines of GM a UAW worker weighs in

Monday, March 30, 2009

Later today President Obama is set to unveil his new plan to revive the flailing U.S. auto industry. As part of the administration's strategy, GM CEO Rick Wagoner was asked to step down. What does his departure mean for GM workers? For GM's employees and unions this question weighs heavily on their minds. We are joined now by Will Marcum, a UAW autoworker in Detroit, who has been grappling with the ousting of his CEO.

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The Takeaway

Auto industry back in the spotlight as Obama steps up and Wagoner steps down

Monday, March 30, 2009

The Obama administration unveils its restructuring plan for the troubled auto industry today, and in a surprise move, GM's Chief Executive Rick Wagoner will be stepping down, too. For an analysis, The Takeaway talks with New York Times Senior Business Correspondent Micheline Maynard in Detroit and Sheryl Gay Stolberg who is covering the story from D.C.

For more, read Sheryl Gay Stolberg's article, U.S. Moves to Overhaul Ailing Carmakers and Micheline Maynard's profile of Wagoner, The Steady Optimist Who Oversaw G.M.’s Decline, both in the New York Times.

"The feeling was that, as the White House officials said, they needed a clean sheet. But you might say it more simply that someone's head had to roll."
—New York Times correspondent Sheryl Gay Stolberg on Rick Wagoner leaving General Motors

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The Takeaway

In Europe, bankers' security at risk due to public outrage

Friday, March 27, 2009

There's been plenty of outrage in the U.S. over collapsing banks, bailouts and bonuses, but the financial crisis is turning violent in Europe. Fred Goodwin, the former chief executive of the ailing Royal Bank of Scotland, had his house and car vandalized this week and the manager of a 3M factory in France was barricaded in an office by workers demanding better severance packages for employees being laid off. All this comes ahead of the G20 meeting in London next week, where some protesters are planning to hang effigies of bankers from lamp posts. Damian McLoughlin, managing director of the security firm Guardian GS, joins us for a look at the security concerns for bankers in this environment.

For a look at the vandalism on Fred Goodwin's home in Edinburgh watch the video below.

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The Takeaway

Fresh from the fray over AIG's visit to the Hill

Thursday, March 19, 2009

Yesterday, Ed Liddy, the CEO of embattled insurance giant AIG, went to Capitol Hill to face down a wasps' nest of angry congressmen determined to make him justify the large bonuses company executives received. Todd Zwillich of Capitol News Connection swings by to give us his account of AIG's harrowing day on the Hill.

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The Takeaway

AIG boss faces House firing squad today

Wednesday, March 18, 2009

Lawmakers on Capitol Hill are busy pointing fingers in the fallout over the $165 million bailout of AIG and the executive bonuses. There's more to come today, as AIG boss Edward Liddy testifies in front of furious U.S. lawmakers at a House subcommittee. The Takeaway talks to Todd Zwillich from Capitol News Connection for the reaction, the political implications and what's ahead.

"You don't have enough fingers on both your hands to count all the fingers that were pointed yesterday in every direction."
— Todd Zwillich or Capital News Connection on reactions to the AIG bonuses

See reactions from Rep. Barney Frank and Sen. Chuck Grassley in this clip from Countdown with Keith Olbermann:

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The Takeaway

Andrew Ross Sorkin on why we should pay AIG bonuses

Tuesday, March 17, 2009

Outrage over the news that AIG employees will receive their enormous bonuses is widespread. Even President Obama suggested we simply tear up the bonus contracts and Iowa Senator Chuck Grassley suggested that the executives should consider doing the honorable thing a la seppuku. But not everyone thinks these bonuses are evil. One of those minority voices is Andrew Ross Sorkin, chief acquisitions and mergers correspondent for our partner, the New York Times, and he is here to make the case for the AIG bonuses.

For more, read Andrew Ross Sorkin's article, The Case for Paying Out Bonuses at A.I.G. in today's New York Times.

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The Takeaway

Despite tied hands, President up in arms over AIG

Tuesday, March 17, 2009

As the lavish AIG executive bonuses continue to infuriate the nation, the Obama administration is swearing to step in. But due to existing contracts and the rule of law, their hands may be tied. So what's a President to do? The New York Times' Jackie Calmes joins us to discuss.

For more, read Jackie Calmes' and Edmund L. Andrew's article, Obama in Effort to Undo Bonuses Granted by A.I.G., in today's New York Times.

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The Takeaway

AIG bonuses and the rule of law

Monday, March 16, 2009

AIG's bonus payments of $165 million to executives made no one happy. Well, the executives probably didn't mind them. From Ben Bernanke to Lawrence Summers, we're all mad at these guys. But what do we do next? How do we navigate the rule of law versus operating with the knowledge that we're compensating people for bad decisions? For more, The Takeaway talks to our friend Dan Ariely. Dan is the James B. Duke Professor of Behavioral Economics at Duke University and author of Predictably Irrational.

"There's such a huge loss over this thing that the few million dollars here and there don't matter. The reason we care, though, is that it's an outrage."
— Behavioral economics professor Dan Ariely on the AIG bonus payments


Federal Reserve Chairman Ben Bernanke discusses AIG.

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The Takeaway

Radically re-thinking the economy with David Korten

Thursday, March 05, 2009

Will fixing Wall Street really help Main Street? David Korten is suggesting that instead of bailout after bailout we should completely re-imagine our economy. He is the author of Agenda for a New Economy: From Phantom Wealth to Real Wealth and he joins us now to talk about the future he imagines for banks.

For more, here is David Korten on Democracy Now! discussing his book:

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The Takeaway

Parsing the Obama housing plan with Alvin Hall, Part Two

Thursday, March 05, 2009

Takeaway contributor and personal finance whiz Alvin Hall has been helping homeowners dissect the Obama administration's housing plan. Earlier we heard from Pamela Zombeck, a homeowner in Salem, Massachusetts who was struggling to pay her mortgage. Now we sic Alvin on a more complicated situation: the speculator, the guys who bought homes as investments and now have a lot to lose as mortgage payments escalate and housing prices fall. Scott Mintz of Los Angeles bought four homes and has a lot of questions for Alvin.

Click here for Part One

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The Takeaway

There are no residents here: Cleveland as the center of the housing crisis

Wednesday, March 04, 2009

The effects of the housing collapse are being felt acutely, daily, powerfully in Cleveland, Ohio. For a time, it led the nation in foreclosures, and now it’s a city that lives with one out every 13 homes vacant. Alex Kotlowitz is a contributor to the New York Times magazine and author of the book There are No Children Here: The Story of Two Boys Growing Up in The Other America. He has a story in this weekend’s magazine titled “All Boarded Up,” describing how the next stage of the national foreclosure crisis has already come to Cleveland.

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The Takeaway

AIG's $62-billion loss highlights change from life insurance company to toxic asset holder

Monday, March 02, 2009

Markets opened lower this morning after news that the federal government is bailing out insurance giant AIG for the fourth time. The announcement came on the heels of AIG posting a $62 billion loss, the biggest quarterly loss in history. Our friend Dan Gross from Newsweek joins us to discuss the implications of this new $30 million taxpayer-funded bailout. He just wrote Dumb Money: How our Greatest Financial Minds Bankrupted the Nation.

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The Takeaway

A portrait of Vikram Pandit, a bank CEO in crisis

Monday, March 02, 2009

The collapse of Citibank is now the stuff of financial legend. As Citi group lays off employees and sells off its assets, what of the man at the helm? Citibank CEO Vikram Pandit took charge of the megabank just as things started to fall apart and he has barely held onto his job. As the meltdown took hold, Citigroup’s board offered the government his head in exchange for the billions in bailout money. Then, President Obama himself publicly rebuked him for ordering a new $50 million jet. New York Magazine's Joe Hagan joins John with a look at what it's like to be a bank CEO as the banking system collapses.

For more, read Joe Hagan's fascinating portrait of Mr. Pandit, The Most Powerless Powerful Man on Wall Street in New York Magazine.

In a recent interview with Charlie Rose, Vikram Pandit discussed the impossibility of failure:

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The Takeaway

The government to bail out AIG (again)

Monday, March 02, 2009

The federal government is stepping in to bailout AIG one more time. Just as the ailing insurance giant announced a massive $62 billion loss this morning, the biggest quarterly loss in history, the government stepped in to provide an additional $30 billion in taxpayer money. This is the fourth time the government has stepped in with money for AIG. This is the front page story from our partner the New York Times and it's reported by Andrew Ross Sorkin, who joins us now.

For more, read Andrew Ross Sorkin's article, U.S. Is Said to Offer $30 Billion More to Help A.I.G., in today's New York Times.

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The Takeaway

This is a test, it is only a test

Tuesday, February 24, 2009

Starting Wednesday the U.S. government will begin examining how each of the country’s major banks would do in case of a worst-case scenario for the economy. Depending on the results of these so-called “stress tests,” the Treasury Department says it will make sure banks have the capital they need to survive an economic meltdown. Business Week Washington Bureau Chief Jane Sasseen gives a preview of how this process is likely to unfold.

"It's very unlikely the government is going to step in today, tomorrow, even a few months from now and say 'we're just going to take over.'"
— Jane Sasseen, Washington Bureau Chief for Business Week, on the unlikelihood of bank nationalization

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The Takeaway

Resisting foreclosure by any means necessary

Friday, February 20, 2009

It's the stuff of melodramas: "I can't pay the mortgage!" says the pretty young mother. "You must pay the mortgage!" replies the landlord, dressed in black with a dragoon's moustache. "I'll pay the mortgage!" says Dudley Doright. But what if you really can't pay the mortgage? And you really don't want to leave your home despite the eviction notice and there's no dashing Dudley Doright in sight? Answering that question is a group of activists in Baltimore who are using nonviolent resistance tactics as a way of keeping people in their homes. Joining us now is Melody Simmons, a reporter for WEAA in Baltimore, and Donna Hanks a homeowner facing foreclosure.

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