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The Takeaway

Give me some credit

Friday, April 24, 2009

It’s become a familiar story. People who pay their credit cards on time every month are seeing their interest rates go up, their monthly due dates changed without warning, and are watching all sorts of new fees pop up on their monthly statements. Well, President Obama (and Sen. Chris Dodd) is fed up with those stories. Yesterday the President met with representatives of the credit card industry at the White House and recited the many ways he would like to see their business model change.

Here at The Takeaway we've been asking our listeners to call in with their stories of credit card woes and the occasional victory. We turn now to two of our listeners to tell their story and make their suggestions on how they'd improve the credit card industry. We are also joined by The Takeaway's personal finance guru Alvin Hall for his take on the President's makeover of the credit industry.
"Congress needs to look at this and say to the credit card companies 'Listen, if you change interest rates on a customer, you need to give them some time to adjust to this.'"
—Financial adviser Alvin Hall on new rules for credit card companies

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The Takeaway

Banks prepare for the results of government "stress tests"

Friday, April 24, 2009

The day of reckoning is at hand for banks required to undergo government "stress tests." Today federal regulators will meet with the leaders of the nation's biggest banks to tell them how they did. Banks have until early next week to dispute the results, which will be released to the public on May 4. Eric Dash, who writes about banking for the New York Times, joins The Takeaway with a look at what the tests are likely to reveal and what the results will mean for the recovery of the economy.

For more, read Eric Dash's article, U.S. to Tell Big Banks the Results of Stress Test, in today's New York Times.

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The Takeaway

Positive bank reports offer new hope for economy

Tuesday, April 14, 2009

As the nation awaits President Obama's speech on the state of the economy, some of the country's largest banks are reporting positive earnings. Both Wells Fargo and Goldman Sachs reported even larger than expected first-quarter returns. Is this the hope we've been waiting for as we wait results from the other "too big to fail banks" this week? And what does it mean to be profitable when you owe the nation a multi-billion dollar debt? For some perspective on what this means for the state of banking and the public's perception of banks, The Takeaway is joined by James Surowiecki who writes The Balance Sheet blog and is a business columnist for The New Yorker.
"It's profitability with an asterisk. The one thing to remember is, every dollar these banks earn right now is, for the most part, a dollar that we're not going to have to put into them if we, say, were to take them over."
—The New Yorker's James Surowiecki on banks reporting positive earnings

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The Takeaway

A look back at six months of stimulus with the Congressional Oversight Panel

Wednesday, April 08, 2009

It’s been six months, almost to the day, since the TARP stimulus package was put into law. Last night, the Congressional Oversight Panel charged with monitoring the use of those funds and making sure the Treasury makes the right moves to stabilize the economy and the nation’s financial sector, issued a new report spelling out how the federal government is doing. The Takeaway's Todd Zwillich is here to give us a quick overview and we are pleased to have Richard Neiman, a member of the Congressional Oversight Panel, and the New York State Superintendent of Banks, joining us in the studio.

Click through for the transcript.

"We were at a precipice. We were at a risk of financial collapse. We averted that through those actions and now it's up to us to continue to focus on expanding the economy and to get the banks lending."
—Richard Neiman of the Congressional Oversight Panel on helping the economy

For more about the COP, here is a video they just released to accompany their report called Assessing Treasury's Strategy: Six Months of TARP.

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The Takeaway

G-20 meeting in London to shore up global financial crisis

Monday, March 30, 2009

The G-20, a group of finance ministers and central bank governors from around the world, is set to meet this week in London to tackle the global financial crisis. Dan Price, the White House official responsible for the preparation of the G-20 summit in Washington last November, joins The Takeaway from London to talk about why this G-20 is so important for the U.S.

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The Takeaway

Revamping regulations

Thursday, March 26, 2009

Treasury Secretary Tim Geithner is heading to Capitol Hill this morning to outline a sweeping overhaul of federal financial regulations. Early leaks of his testimony say the plan would extend regulation for the first time to all trading in financial derivatives and to companies including large hedge funds and major insurers such as AIG. Joining us this morning to look at whether this will stop the next meltdown and whether lawmakers will pass the new regulation laws, are Dan Gross, senior editor at Newsweek and columnist for Slate and Philip Coggan, capital markets editor at The Economist in London.

"It's like we're always fighting the last regulatory war, trying to stop the last bubble from happening again. And, of course, they always find a way to create something new."
—Dan Gross, senior editor at Newsweek, on economic regulation

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The Takeaway

Meet the man behind Lebanon's stable economy: Riad Salame

Tuesday, March 24, 2009

While banks in the U.S. and Europe have been bailed out or boarded up, a different scenario has played out in Lebanon: banks there are thriving. The man responsible for bucking the banking trend is Riad Salame, the Governor of Lebanon’s Central bank. In 2005 he prohibited banks in Lebanon from investing in mortgage-backed securities and today his prudent move has proved to be prophetic. Governor Salame, joins us from Beirut to discuss how Lebanon’s economy is weathering the global economic meltdown.

Earlier this month Riad Salame rang the opening bell at the New York Stock Exchange. Watch below.

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The Takeaway

Judging market confidence amid the ups and downs

Tuesday, March 24, 2009

In these economic times, it's all about confidence. Markets responded with a surge of confidence to U.S. Treasury Secretary Tim Geithner's announcement of a revised plan to help banks rid their balance sheets of toxic assets yesterday. Stock markets may be overused as indicators, but yesterday's gains were significant as stocks surged almost seven percent. Add to that the almost 5.1 percent upswing in home sales and things are starting to look good, right? Is all this good news the start of the economy turning around? Or are we still bumping up against the bottom? Kelly Evans, economics reporter for the Wall Street Journal, and Juliana Liu, the BBC's Asia business correspondent in Singapore, join The Takeaway to tell us how much confidence is actually warranted.

"Just to see a stabilization or a pop, to me is everything."
—Kelly Evans, economics reporter for the Wall Street Journal, on having confidence in the economy

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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

Bankless in America

Tuesday, March 17, 2009

As 28 million Americans know, living without a bank out has its perks. For example, there are no overdraft fees, no worry about bouncing your rent check and there is no need to hunt all over town looking for YOUR banks ATM machine. But it also means it next to impossible to get a decent rate on a mortgage or get approved on a car loan. Frank Garcia, Chairman of the Hispanic Bronx Chamber of Commerce and also the owner of Millenium Recycled Toner walks us through the pros and cons of going bankless.

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The Takeaway

Bill would allow bankruptcy judges to modify mortgages

Wednesday, March 11, 2009

Congress has passed a measure that would allow bankruptcy judges to change the terms of mortgages to help strapped homeowners avoid foreclosure. Supporters say it will keep people in their homes while the banking industry says it will prompt lenders to raise rates across the board. University of Iowa Law Professor Katie Porter, a specialist on bankruptcy and mortgages, and her father Daniel Porter, vice president of Kerndt Brothers Savings Bank in Lansing, Iowa, join The Takeaway with an analysis.

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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

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

Royal Bank of Scotland claims record deficit for a British company

Thursday, February 26, 2009

The Royal Bank of Scotland has announced the largest annual loss in corporate history in the United Kingdom. The Royal Bank of Scotland said it will insure assets worth 325 billion pounds, or $462 billion, with the British government, who owns two-thirds of the bank. This comes after RBS. nearly collapsed during the credit crisis and needed British taxpayer's money to stay afloat. Andrew Walker, BBC economics correspondent, joins us now to talk about how this compares to the situation banks in the U.S. are facing.

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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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The Takeaway

U.S. tax evasion still legal in Switzerland according to UBS

Friday, February 20, 2009

After it became clear that some UBS employees in the United States helped wealthy Americans evade taxes by setting up Swiss bank accounts, UBS agreed to reveal the details of a few hundred clients suspected of tax fraud and to pay a hefty sum to the U.S. for aiding tax evasion. But when the U.S. sought information on over 50,000 U.S. citizens holding Swiss bank accounts, the Swiss hit the fan. For the details on UBS' decision to rebuff this new U.S. government lawsuit, we turn to the BBC's Imogen Foulkes in Geneva.

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