Archive for the ‘Financial meltdown’ Category

Why no transparency? Here’s the answer

April 6, 2009

Last month I posted about a conversation Terry Gross had with Gretchen Morgenson, a business editor for the New York Times about why the Treasury Department under Obama, in the new era of transparency, is doing the opposite, stonewalling on information about how bailout money is being used.  At that time I posed the question, why?  My first quess was because the government was afraid people would panic if they knew the truth. 

Now William Black, a regulator involved in the saving and loan situation back in the late eighties, affirms my guess in an interview with Bill Moyers.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They’re scared to death of a collapse. They’re afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we’ll run screaming to the exits. And we won’t rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it’s foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, “We just can’t let the big banks fail.” That’s wrong.

Transcript

Depressing but important article on AIG

February 28, 2009

Of all the financial debacles of September 2008, the most infuriating has to be AIG.  One, because as an insurance company it was suppose to be in the business of providing stability for the risk-laden world of financial wheeling and dealing but instead it destroyed that stability and two because its the the debt that keeps on giving.   Taxpayers have spent $150 billion already on this monster and there is talk that we will spend another $100 billion more before the company stabilizes.

Worse, as Joe Nocera explains in his great column about AIG, the government is propping up the insurer’s bad lending practice because if it doesn’t, it risks destroying the fragile modicum of stability in the financial markets.

Article

Lehman bankruptcy: still creating shockwaves

February 2, 2009

Tax officials in Austin Texas are concerned that the nearly $18 million that Lehman Brothers and others owe on their ownership stake in ten Austin buildings.  Its seems that the other owners are embroiled in lawsuits with the bankrupt investment bank to get them to pay their fair share but that the money is due now and the lawsuit, not surprisingly, hasn’t resolved the issue.  $9.5 million of this money owed to the Austin school district.

Article

DHL pull-out creates domino effect

December 13, 2008

Wilmington Ohio braces for more job losses as ABX Air announced today layoffs of 1,900 because DHL terminates its contract with the company as of Jan.4th.   ABX operated planes and transport services for DHL in Wilmington Ohio where 1,000 of ABX jobs will be lost.

Its too late to bail out DHL and stop them from leaving the U.S. but in looking at candidates for bailouts, DHL acts as a model.  It is a company that acts as an economic hub where its failure cascades more failure through out an industry sector and such companies should be considered candidates for federal money if one of the goals of the bailout is to insure the continued basic functioning of the economy.

Listening to Elizabeth Warren who heads the Congressional bailout oversight panel on “Fresh Air” yesterday, its unclear the Treasury Department has a bailout strategy but given the likelihood of more sectors failing throughout the economy in the coming weeks and months, they had better come up with one.

Article on ABX layoffs

Newspapers the way of vaudeville?

December 11, 2008

Vaudeville died in the early thirties for several reasons but the Great Depression was one of them.  With the Tribune company going into bankruptcy, will other newspaper companies follow suit?  The Internet hit the newspapers like the “talkies” hit vaudeville but it was  the seismic economic shift of the Great Depression that sealed the deal.   My prediction: no media company will be primarily newspaper based in three years.

Window workers latest

December 10, 2008

An article from the BBC (they would have the best coverage!) suggests that BofA is willing to extend a loan to meet the workers’ demand for vacation pay and severance but no more.  And the workers are no dummies, remaining at the plant until they actually see the $$.  The other thing that galls me about the article is how the Gov’s scandal got all mixed up in this thrilling workers-take-back-their-power story.   The workers plight and their struggle should stand alone. 

Article

Email to Bank of America CEO

December 7, 2008

ken.d.lewis@bankofamerica.com

Subject: Please keep the window factory running

Dear Mr. Lewis,

We all know that Bank of America got billions of taxpayer funds
expressly for the purpose of lending it to companies that need the
money to keep our economy running.  Therefore it is perplexing that
your company would choose to cut-off a company like Republic Window
and Door when they desperately needed the money to stay afloat during hard-times employed.

Please reconsider this course of action.  If your biggest concern is
your shareholder, consider that this heartless act which certainly
violated the spirit if not the letter of the bailout plan, will not
play well in the coming days and could cause your company to lose
whatever goodwill it has.  The money you save by cutting off Republic
Window is going to be lost in how it effects your stock price.

Respectfully,

Randy Wilson

Window workers update

December 7, 2008

ACTION: Bailout Workers, Protest Bank of America, Mon, Dec 8th Charlotte 12-1pm‏

Bank of America, Recipient of $25 Billion in Bailout

Pulls Financing at Factory; 300 Workers Lose Jobs

Workers Occupying Factory Need your Support!

What: Picket to Demand Plant stay Open!

When: Picket at 12noon – 1pm, Monday, Dec 8th

Where:  Bank of America, Corner of Trade St and Tryon St, Charlotte

Background:  Bank of America controls the day to day finances of Chicago-based Republic Windows and Doors, LLC, closed its doors on Friday December 5th.  The company, in business since 1965, announced to its workforce that the Bank has ended its financing.  Republic has told workers that Bank of America has refused to allow payment of money owed under the WARN Act and vacation pay.  

Workers have been occupying their factory refusing to leave until Bank of America comply with federal and state WARN Acts which require 60 days notice before the closure of a workplace or 60 days pay in leiu of notice.  Bank of America received 25 billion in federal bailout funds yet still refuses to support these workers!

“Just weeks before Christmas we are told our factory will close in three days”, says Armando Robles, a maintenance employee and local union president, “taxpayers gave Bank of America billions and they turn around and close our company, we will fight for a bailout for workers.”

National television news networks CNN News and Fox are running reports on the following story involving the UE members in Chicago. Several national news media outlets have covered this fast-developing story; several links are provided below. More news to follow as it becomes available…

Daily kos comment

Laid off workers fight back

December 6, 2008

In Chicago, Bank of America tells a small window manufacturing company, Republic Window and Door factory, they are getting no more credit.  On Friday, the company shuts down telling the workers they are laid off and will not get earned vacation time or insurance coverage.  The company has been operating since 1965 and I’m sure many of the workers have been there for years.  The workers are refusing to leave the plant, staging a sit-in.

How about we all help them out with a little email to Mr Ken Lewis Chairman and CEO of Bank of America letting him know how we feel about Bank of America getting $15 billion of taxpayer money while he yanks the financing on a manufacturing company and leaving the workers with nothing?

ken.d.lewis@bankofamerica.com

Article

Update: Foreclosure rescue scams

December 5, 2008

I just came across a useful blog entry that address the legal issues involved in type of suit I mentioned earlier here.

It appears from “The Lead Counsel Corner” that these scams are being monitor carefully by the FTC.  I hope the Illinois AG is working with them and other AGs to prevent the worst abuse of this sort from happening.


Follow

Get every new post delivered to your Inbox.