A little bit of encouraging news on the job front. Continuing unemployment claims fell for the first time since January. Could be a sign of some stabilization in the job market. Some other items of interest:
The New York Post reports that TARP-tethered Bank of America has been paying out millions in bonuses to try and keep executives from leaving. B of A’s TARP-less competitors smell blood in the water:
The guarantees being shelled out by the embattled bank run by CEO Ken Lewis are raising eyebrows on Wall Street because BofA has taken $45 billion in capital from the Troubled Asset Relief Program and hasn’t been allowed to refund that money.
A BofA spokeswoman argued that paying talented employees top dollar to stay is necessary because rival firms are poaching its best execs at an alarming rate…
Meanwhile, internally, BofA’s guarantees have added to the friction that already exists between former Merrill workers and BofA employees, the latter of whom complain Merrill bankers are more often getting the guarantee bonuses.
I’m guessing Lewis’s regret runs pretty deep over his decision to let the Merrill deal happen.
Meanwhile, now that Goldman Sachs can pay back TARP, CEO Lloyd Blankfein is expressing his official regret. From the New York Times:
In his letters to lawmakers, Mr. Blankfein wrote that Goldman had “an explicit contract with our shareholders to be responsible stewards of their capital.”
Mr. Blankfein said Goldman was “grateful for the government’s extraordinary efforts and the taxpayers’ patience” during the crisis. And he acknowledged in letters obtained by DealBook that “certain practices were unhealthy” for the banking system.
“While we regret that we participated in the market euphoria and failed to raise a responsible voice, we are proud of the way our firm managed the risk it assumed on behalf of our client before and during the financial crisis,” he said.
NPR has a story about the government’s “involvement” in GM. I thought this section with Congressmen Lamar Alexander and Barney Frank was particularly telling:
Alexander: “If you have 535 congressmen and senators, all of whom know nothing about building cars and have other larger interests in mind, telling GM and Chrysler how to design, build and sell cars — they’re almost guaranteed to fail.”
Last week, Alexander even gave Frank a mock “Car Czar” award on the floor of the Senate.
“That’s a lot of political hooey,” says Frank. He says the distribution center employs only about 80 people and keeping it open a while longer won’t break the budget. Frank also says that with the government propping up GM with $50 billion, politicians are within their rights to scrutinize decisions.
“Now what we should do is not burden them in ways that would make it impossible for them to get through in the long haul,” he says.
Asked if he was concerned about the government meddling in General Motors, Frank had this response: “That’s a very odd question. If the government hadn’t ‘meddled’ in General Motors, there would be no General Motors. ‘Meddle’ is what you say when you don’t like it. ‘Involve’ is what you say when you do.”
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