6/1/2009

Another piece of history was made today, as General Motors filed for bankruptcy protection.

Following Chrysler's bankruptcy filing on April 30, GM's filing is the fourth-largest in U.S. history and the largest for an industrial company. The largest automaker in the U.S. has been in financial trouble, since the global economy tumbled. The company has $172.81 billion in debt and $82.29 billion in assets at the moment.

"The General Motors board of directors authorized the filing of a...

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The recent rally in the stock market has been led by the very same financial sector that dragged down the market. Thanks to the modified mark-to-market accounting rules, several banks have seen much improved balance sheets and reported better than expected earnings for the first quarter of 2009.

What's the magic about "the modified market accounting rules"? Here is the excerpt from Barron's:

Dick Bove, the dean of bank analysts, now with Rochdale Securities, explains how mark-to-market ac...

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3/11/2009

President Obama signed the $410 billion bill Wednesday morning to keep most of the government operations running until September 30. Banking on Obama's willingness to sign the bill, both Republican and Democratic lawmakers jammed the bill with about 8,500 earmarks worth of $8 billion. At $410 billion, the bill represents an 8 percent increase over last year's spending levels, more than double the rate of inflation. Given the fact that the U.S. national deficit has been making its re...

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1/22/2009 Some GOP governors appear to have difficult time in deciding whether to accept any money from the $787 billion economy stimulus package provided by the federal government. Some even are doing their calculus in determining which portion of the stimulus aid would be accepted and which portion not. Their reasons: The stimulus package is a waste of the taxpayers' money and is not going to help much of the economy or create enough jobs. Well... California Gov. Arnold Schwarzenegger is ...
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2/10/2009 How much would it take to turn around the sinking economy again? The Obama administration has been considering for the government and private sectors to purchase so-called toxic assets from the struggling financial institutions. According to the new estimate, the amount of government and private funds combined will be "on an initial scale of up to $500 billion, with the potential to expand up to $1 trillion."

In addition, the Federal Reserve announced it would commit up to $1 tri...

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2/9/2009 President Obama held a conference today to call on Republicans not to "play the usual politics games" and pressure the lawmakers to approve the massive economy stimulus plan. "The plan is not perfect," the president said. "No plan is. I can't tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans." President Obama sa...
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Most of the first half of the $700 billions bailout money has been handed out by the Treasury Department to the nation's banks. The idea was to inject enough money to the banks, so they would start making loans and lending money to businesses or consumers. In theory, that would thaw the frozen credit market and help jump-start the economy. "Banks might normally be leveraged 10:1, so some of the logic is that if you invest a billion dollars in a bank in capital, then over a period of time tha...
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