Citigroup about to complete purchase of brand new $50 million corporate jet. from Think Progress

from http://thinkprogress.org/2009/01/26/citigroups-new-jet/

The New York Post reports today that Citgroup — the recent recipient of a $45 billion government bailout — is about to receive a brand new $50 million corporate jet:

The French-made luxury jet seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center, according to Dassault's sales literature. … There are just nine of these top-of-the-line models in the United States, with Dassault's European factory churning out three to four 7Xs a month.

"Why should I help you when what you write will be used to the detriment of our company?" replied Bill McNamee, head of CitiFlight Inc., the subsidiary that manages Citigroup's corporate fleet, when asked to comment about the new 7X.

Earlier this month, a provision requiring the recipients of TARP funds to give up their corporate jets was stripped from the legislation.

Seven reasons the market is not going up any time soon: #5 The consumer has stopped spending from BloggingStocks

The consumer spending component of the economy was 70% of GDP, but it is shrinking fast and it will not come back to former levels for a long time -- maybe ever.

Unemployment and fear of unemployment are killing spending. I believe we will see double-digit unemployment before we see 5% again.

Another drag on spending is a lack of credit, as credit cards get pulled back, home-equity lines are withdrawn and people realize that buying the next piece of breakable stuff made in China may not be the wisest thing to do with their money right now.

rest http://www.bloggingstocks.com/2009/01/24/seven-reasons-the-market-is-not-going-up-any-time-soon-5-the-c/

Memo to All: Republican Members of Congress, and Their Media Dogs, Lie All the Time from Grasping Reality with Both Hands: The Semi-Daily Journal of Economist Brad DeLong

Duncan Black:

Eschaton: Your Liberal Media: Still happy to run with any Republican horseshit it is fed. Get used to it.

Steve Benen:

The Washington Monthly: ABOUT THAT CBO REPORT.... This week, congressional Republicans seized on a new report from the Congressional Budget Office (CBO) showing the limited short-term stimulative effects of the Democrats' proposed rescue package. It's also led to widespread media coverage undermining the White House's arguments about the benefits of a stimulus plan.

There is, however, a problem. The CBO report, as it's been described, doesn't exist.

Reports of a recent study by the Congressional Budget Office, showing that the vast majority of the money in the stimulus package won't be spent until after 2010, have Democrats on the defensive and the GOP calling for a pullback in wasteful spending.

Funny thing is, there is no such report.

"We did not issue any report, any analysis or any study," a CBO aide told the Huffington Post.

Rather, the nonpartisan CBO ran a small portion of an earlier version of the stimulus plan through a computer program that uses a standard formula to determine a score -- how quickly money will be spent. The score only dealt with the part of the stimulus headed for the Appropriations Committee and left out the parts bound for the Ways and Means or Energy and Commerce Committee.

Because it dealt with just a part of the stimulus, it estimated the spending rate for only about $300 billion of the $825 billion plan. Significant changes have been made to the part of the bill the CBO looked at.

Oops.

rest http://delong.typepad.com/sdj/2009/01/memo-to-all-republican-members-of-congress-and-their-media-dogs-lie-all-the-time.html

Palin’s campaign wardrobe is in trash bags at the RNC. from Think ProgresS

After it was revealed that Gov. Sarah Palin's (R-AK) infamous campaign wardrobe was worth at least $150,000 dollars, Sen. John McCain (R-AZ) remarked, "They'll be donated at end of this campaign. They'll be donated to charity." But the conservative blog New Majority reports that the clothes are actually in trash bags at the RNC:

REST AT http://thinkprogress.org/2009/01/23/palin-clothes-trash-bags/

Clueless from Daily Kos

REST AT http://www.dailykos.com/storyonly/2009/1/23/134815/053/389/688122

You can't make this stuff up:

The Thain of Wall Street: “Let ‘em eat cake” from Eideard

Merrill Lynch paid billions of dollars of bonuses to its employees, three days before completing its life-saving sale to Bank of America, reports the Financial Times.

The money was paid as Merrill's losses were mounting, forcing Bank of America CEO Kenneth Lewis last month to seek additional government support for the deal. Merrill's compensation committee agreed to pay bonuses on December 29, at least one month earlier than usual, the paper said.

Bank of America said Merrill had a $21.5 billion operating loss in the fourth quarter. Despite the massive losses, Merrill set aside $15 billion for 2008 compensation, 6% lower than a year earlier. About $3 billion to $4 billion of that compensation were annual bonuses.

And then there's the egregious fop who ran this castle, John Thain:

John Thain spent $1.22 million of Merrill's money to refurbish his office. Thain's largest expense was the hiring of celebrity designer Michael Smith for $800,000. This is the same guy who is currently redesigning the White House for the Obama family for only $100,000. Thain had Merrill pay that designer $700,000 more for the redesign of only his office. Again, are you kidding me?

rest at http://eideard.wordpress.com/2009/01/23/let-em-eat-cake-still-rules-on-wall-street/

Citi Follows Chase out of Wholesale - The ‘Rest’ Are Next from Mr. Mortgage's Guide to the TRUTH

It looks like Citi is following Chase's lead and is shutting down their wholesale lending (broker) and much of their correspondent (banker) divisions effective immediately (not verified by Citi). Chase kept open correspondent by the way. For those of you that did not catch my Chase report and take on where the mortgage industry is headed over the near-term, please see…

• The End of Large-Bank Wholesale Lending - Time For the Mortgage Banker (144)
  Posted on January 16, 2009 2:23 PM

This announcement could also be a sign of something bigger coming than Citi simply exiting the highly unstable wholesale space. Chatter has it that the Obama administration will announce something big this weekend. Some think this 'something' is the nationalization of some of the nation's most troubled financial institutions vs. letting them suck every penny thrown their way into their black liquidity trap holes. Some are saying that Obama will increase the size of the stimulus plan in addition to announcing TARP 2.

There is even speculation that the National 'Bad Bank' of the USA will be brought to life to buy up distressed assets from the balance sheets of the nation's most important banks. However, the latter would likely require much deeper pockets than most think…and I only track the residential side! Additionally, a bad bank buying distressed assets at 'fair value' as Sheila Bair said this week could do serious damage to the very distressed asset prices that they are buying and hit hard already battered balance sheets.

Stay tuned. More banks will be shutting down wholesale lending over the near-term which will put a strain on the mortgage market. There is just not the excess capacity through retail or correspondent channels to absorb everyone 'trying' to refinance now. There isn't the warehouse capacity on the mortgage banker side to make a dent either.

rest http://mrmortgage.ml-implode.com/2009/01/22/citi-follows-chase-out-of-wholesale/

Merrill Paid Billions In Bonuses, As New Owner Sought More Bailout Dollars from TPMmuckraker

It's got stiff competition, but Merrill Lynch may have just wrapped up the prize for the investment bank that best exemplifies Gordon Gekko's famed articulation of the Wall Street creed: "Greed is good."

The Financial Times reports(sub. req.) today that in early December, Merrill, which months earlier had agreed to be bought -- rescued, really -- by Bank of America, decided to pay out $3-4 billions in bonuses.

The bonuses were handed out on an accelerated schedule -- at least a month earlier than in previous years. And they ere agreed to just days before Bank of America, realizing how much in toxic assets Merrill had on its books, went to the federal government asking for more taxpayer money to help it digest Merrill -- money that was eventually forthcoming.

One equity analyst told MarketWatch that the move, apparently initiated by then-Merrill CEO John Thain, was "simply outrageous and one of the more extreme examples of poor corporate governance we can think of."

You also might remember that Thain -- who today resigned as a Bank of America exec, amid criticism -- had originally asked the firm's compensation committee for a $10 million bonus for himself, as part of that round of payouts, though the committee at least had the good sense to decline the request.

And the Wall Street Journal now reports that New York Attorney General Andrew Cuomo is investigating the payouts -- part of a broader probe of executive compensation among Wall Street firms.

Just to get a clear sense of how this all went down, and what a boondoggle this looks to have been for Merrill, it's worth looking at a timeline of events:

rest http://tpmmuckraker.talkingpointsmemo.com/2009/01/merrill_paid_billions_in_bonuses_as_new_owner_soug.php

John Thain Quits Bank of America, Leaving $87,000 Rug Behind from Gawker

After details of a spending spree became public, Merrill Lynch CEO John Thain has resigned from his post at Bank of America, which bought his firm in the midst of the Panic of '08.

The $1.2 million Thain spent redecorating his office — with expenses like an $87,000 area rug and a $35,000 "commode with legs" — paled beside the $15 billion in losses Merrill reported for the fourth quarter. The losses were so heavy, and so unexpected, that Bank of America CEO Ken Lewis met secretly with government officials and negotiated a new infusion of cash from the government's bailout fund.

rest http://gawker.com/5137182/john-thain-quits-bank-of-america-leaving-87000-rug-behind

House Votes Against Kleptocracy, Puts Obama's Economic Team on Notice from Open Left

The U.S. House today publicly rebuked the Obama administration's economic team, voting overwhelmingly to disapprove the second half of the Wall Street bailout money that Obama has been demanding. Because this resolution of disapproval was rejected by the Senate, the House's vote does not have the force of law (both chambers would have needed to pass the bill in order to block the money). However, this is a major victory for the progressive movement in that the House has formally gone on record against kleptocracy.

What's great about this vote is its juxtaposition of true bipartisanship with Beltway buypartisanship. Indeed, as the roll call shows, the House vote for the resolution of disapproval forged a coalition of about a third of the Democratic caucus, and most of the Republican conference - all voting for a progressive cause: namely, preventing Wall Street from ripping off the American taxpayer. Though we are led by the media to believe that "centrism" means corporatism, this vote is the kind of populist bipartisan coalition that reflects the real centrism in the country at large - a centrism where the "center" is decidedly against letting big corporations raid the federal treasury.

Couple this vote with the House's vote yesterday to attach more strings to the bailout money, and with our work in getting the Senate - through Ohio Sen. Sherrod Brown (D) - to pass a bailout regulation bill, and we're seeing real progress - or, dare I say, the possibility of real, actual, substantive change.
Let's remember that this economic fight isn't over - not by a longshot. The Wall Street Journal reports that at his confirmation hearing, incoming Treasury Secretary Tim Geithner - one of the architects of the current kleptocratic bailout - suggested that he may ask Congress for even more bailout money. That means the House's display of strong bipartisan opposition and our work getting the Senate to support tough restrictions is laying the groundwork for the next fight. As these successes accrue, we could also be changing the fundamental dynamics. It's entirely possible that if/when Geithner comes back to Congress asking for more money, he will submit legislation that is - at its origination - far more progressive in transparency, oversight, and objectives than the original bailout, knowing that it must be more progressive to have a shot at passing the new Congress.

rest http://www.openleft.com/showDiary.do?diaryId=11060

The 24/7 Wall St. Twenty-Five Best Financial Blogs

from http://www.247wallst.com/2009/01/it-has-been-ove.html

Merrill Gives Itself Huge Bonus For Snookering Ken Lewis And BOFA (BAC) from Clusterstock

Merrill Lynch's sale of itself to Bank of America (BAC) for almost $50 billion is shaping up to be the deal of the century. As we now know, when Ken Lewis was fooled into thinking if he didn't buy Merrill at a huge premium over the market price, he'd lose it forever, Merrill was actually worth zero.  And getting $50 billion for something that's worth zero is no mean feat.

Merrrill had to reward itself for its cunning, of course, and it had to do it before Ken Lewis took over, because Ken Lewis is known to frown on over-the-top dynastic investment-banking compensation (and also because he's probably secretly steamed about being taken to the cleaners).  So, three days before the BAC deal closed, shortly after informing Ken Lewis that his new prize would book more than $10 billion of losses in Q4, Merrill accelerated its firm-wide bonus payments by a month.

Just another welcome gift from the CEO of the Year, John Thain:

FT: BofA said: "Merrill Lynch was an independent company until January 1 2009. John Thain (Merrill's chief executive) decided to pay year-end incentives in December as opposed to their normal date in January. BofA was informed of his decision."...

Nancy Bush, an analyst with NAB Research, described the size of the 2008 Merrill bonus payments [$15 billion, only 6% lower than 2007] as "ridiculous".

Oh, and that $15 billion came from you, of course.  U.S. taxpayers just handed Ken Lewis $20 billion so he could save his own bank from going to zero. Three-quarters of it is now in the pockets of Merrill Lynch executives.

rest http://clusterstock.alleyinsider.com/2009/1/merrill-gives-itself-huge-bonus-for-snookering-ken-lewis-and-bofa-bac

John Thain's $87,000 Rug - The Daily Beast

[WHAT A CLUELESS ASSHOLE ]

in a Daily Beast/CNBC exclusive, Charlie Gasparino reveals how Merrill Lynch's CEO spent over $1 million and hired the Obamas' decorator to redecorate his office last year—even as the firm faced a financial crisis.

UPDATE: Bank of America has just announced that Thain will leave the firm, less than a month after its merger with Merrill.

In early 2008, just as Merrill Lynch CEO John Thain was preparing to slash expenses, cut thousands of jobs and exit businesses to fix the ailing securities firm, he was also spending company money on himself, senior people at the firm say.

According to documents reviewed by The Daily Beast, Thain spent $1.22 million of company money to refurbish his office at Merrill Lynch headquarters in lower Manhattan. The biggest piece of the spending spree: $800,000 to hire famed celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000.

Big ticket items included $87,000 for an area rug, four pairs of curtains for $28,000, a pair of guest chairs for $87,000 and fabric for a "Roman Shade" for $11,000.

REST http://www.thedailybeast.com/blogs-and-stories/2009-01-22/john-thains-87000-rug/

Obama keeps promises on his first day from Politifact.com stories

In his first full day in office, President Obama kept several campaign promises on ethics and was scheduled to fulfill a well-known pledge on the Iraq war.

His first executive orders followed through on three promises Obama made during the campaign: closing the revolving door on lobbyists in government, banning lobbyist gifts for executive employees, and requiring new hires to affirm that they did not receive their positions based on political influence or contributions.

So he's already earned three Promise Kept ratings on our Obameter.

rest http://www.politifact.com/truth-o-meter/article/2009/jan/21/obama-keeps-promises-his-first-day/

Rush Limbaugh passes out his marching orders to the GOP: He wants Obama to fail from Crooks and Liars

from http://crooksandliars.com/john-amato/rush-limbaugh-passes-out-his-marching-o

http://www.youtube.com/watch?v=XuYjWbAU2eU

Rush Limbaugh is not mincing words and showing the real face of Conservative ideals as he announces that he wants Barack Obama to fail. He is the worldwide voice of Conservatism, so the Republican party has just gotten its marching orders. I dare any Republican to defy him.

What this means, of course, is that he hopes the economy crashes into a full-blown depression. His multimillion-dollar salary is safe, obviously, so to hell with the nation and its economy if the cost of saving the country is being guided by a Democratic President.

Limbaugh: I'm happy to be the last man standing. I'm honored to be the last man standing. Yeah, I'm the true maverick. I can do more than four words. I could say I hope he fails and I could do a brief explanation of why. You know, I want to win. If my party doesn't, I do. If my party has sacrificed the whole concept of victory, sorry, I'm now the Republican in name only, and they are the sellouts.

I'm serious about this. Why in the world, it's what Ann Coulter was talking about, the tyranny of the majority, all these victims here, we gotta make sure the victims are finally assuaged. Well, the dirty little secret is this isn't going to assuage anybody's victim status, and the race industry isn't going to go away, and the fact that America's original sin of slavery is going to be absolved, it's not going to happen. Just isn't, folks. It's too big a business for the left to keep all those things alive that divide the people of this country into groups that are against each other. Yes, I'm fired up about this.

There isn't a bigger pig on the air than Limbaugh, and this clip proves the point. He's using race as the wedge (as usual) to try and stir up his base.