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Daily Monitor – Wall Street may be bruised and battered, but it still donated more money than any other U.S. industry to President-elect Barack Obama’s inaugural festivities on Tuesday, a study has found.
The Center for Responsive Politics said executives of finance, insurance and real estate companies and their family members gave $7.1 million to Obama’s inaugural committee.
Top donors from the world of high finance included George Soros, Ronald Perelman and David Shaw, the center said.
New York (HedgeCo.Net) – President-elect Barack Obama has been granted permission to dole out the second half of the $700 billion in the Troubled Asset Relief Program, after a vote of confidence from the Senate. They shot down a resolution that would have prevented him from distributing it, after much criticism came from the handling of the first $350 billion by the Bush administration.
"I’m gratified that a majority of the U.S. Senate, both Democrats and Republicans, voted today to give me the authority to implement the rest of the financial rescue plan in a new and responsible way," Obama said in a statement after the vote. “I know this wasn’t an easy vote because of the frustration so many of us share about how the first half of this plan was implemented.”
While most democrats were on board with the release of the funds, a few voted against it. A final vote of 52-42 gave Obama his first legislative victory just days before taking office. John McCain, who supported the enactment of the TARP program, voted against the release of the funds by Obama.
“If the Bush administration was going to continue to dole out this money, I wouldn’t give them three dollars, let alone $350 billion,” said Barbara Boxer, a California Democrat.
Republican Senator Jim Inhofe of Oklahoma expressed his disdain that it is “probably going to be one of the most egregious votes in the history of this institution."
Larry Summers, who Obama has chosen to head the White House National Economic Council, wrote a letter to Congress earlier this week, urging them to let Obama take action. He focused on the fact that Obama would use a large chunk of the money to help troubled homeowners avoid foreclosures, while keeping public records so that all of the money could be accounted for. In addition, he expressed their belief that small businesses and community banks should be getting more help.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Financial institutions that have received generous assistance from Congress may be forced to restrict executive compensation and their dividends, if Barack Obama and his new Treasury have their way.
“Those receiving exceptional assistance will be subject to tough but sensible conditions that limit executive compensation until taxpayer money is paid back,” said Larry Summers, who Obama chose to head the White House National Economic Council. He also said they would ban dividend payments beyond the minimum amounts while putting limits on stock buybacks.
Obama has expressed his disappointment with the current administration and the lax oversight in doling out the first $350 billion of the bailout, along with failing to focus on areas like housing and consumer credit. Summers tackled the subject in a letter to Congress yesterday that outlined the issues Obama supports in distributing the other half of the $700 billion Troubled Asset Relief Program.
Summers told Congress that the President-elect believes there has been “too little transparency and accountability,” among the financial institutions. In addition, Obama believes the executives acted irresponsibly and did not provide enough support for small-businesses owners. Small businesses and community banks are where more of the money needs to be directed, Obama says.
In addition, he wants to provide help to struggling homeowners in order to avoid foreclosure, along with providing enhanced oversight of the relief program which includes public accounting to see how the money is being spent.
The House of Representatives will vote on a proposal this week that include some of the restrictions outlined by Summers.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Paul Volcker, one of the men President-elect Barack Obama is counting on to save the U.S. economy, last night helped the Museum of American Finance raise about $470,000 at a gala dinner.
The former Federal Reserve chairman’s Rolodex and clout helped the museum come within $30,000 of the money raised at its inaugural gala before the crisis started last year.
Jeanne Driscoll, the museum’s development director, smiled as patrons arrived, including Merrill Lynch & Co. Vice Chairman William McDonough and Blackstone Group L.P. co-founder Pete Peterson. She said a Volcker-less affair and the absence of many of his rich and powerful friends would have raised much less in the current economy, which he is charged with fixing as head of Obama’s Economic Recovery Advisory Board.
Charleston Gazette – Whether it’s a buildup of Civil War troops, Depression-era bureaucrats or defense contractors after Sept. 11, the region has prospered in times of crisis. Today, the financial meltdown is delivering a jolt of its own.
Lawyers, lobbyists and public relations experts — many of whom live and work in Virginia and Maryland suburbs — are benefiting as companies from Wall Street to Motor City seek a piece of Washington’s $700 billion financial bailout, and try to influence any regulatory strings attached. Business is also percolating as President-elect Barack Obama prepares an economic stimulus package comprised of infrastructure spending and tax breaks that could exceed $800 billion.
"There will be a mad rush to have influence on where that money should go,” said David Rubenstein, co-founder and managing director of The Carlyle Group, the Washington-based private-equity firm whose partners include former high-ranking U.S. and foreign government officials. Far from struggling, the Washington region could be on the verge of "boom times,” Rubenstein said.
The Australian – HFA, which has $5.8 billion in assets, joins a long line of fund managers — including Perpetual, Babcock & Brown and Macquarie Group — in suspending redemptions from some funds this year as the credit crisis takes its toll on the value of fund assets.
Standard & Poor’s has placed 80 to 90 per cent of all the mortgage funds, property funds and fund of hedge funds it rates "on hold" this year due to changes in the redemption process.
HFA shares plummeted 55 per cent to 4.3c in local trade yesterday, taking the year’s decline to 98 per cent, after the company said it had stopped allowing withdrawals from the HFA Diversified Investments Fund, the HFA Octane Fund and the HFA Octane Fund Series 2 because of "deteriorating liquidity in underlying investments".
Business Intelligence Middle East – International Tax lawyers are urging private-equity and hedge-fund clients to restructure their partnerships so they can sidestep the higher taxes that president-elect Barack Obama has vowed to impose on their profits.
Obama’s promise to revive a failed 2007 bill forcing executives to pay rates of 35% or more instead of the 15% capital-gains tax has prompted lawyers to advise the firms to take measures such as setting up offshore entities. That would help circumvent higher taxes on so-called carried- interest profits that executives at the firms typically earn.
The lawyers say they are pressing their clients to act before the year’s end on the assumption that any law or regulatory change won’t apply before 2009.
“If you wait to do it, then to unwind or restructure later will be very difficult and trigger significant tax penalties,” said Mike Kosnitzky, who heads Boies Schiller & Flexner’s tax practice in New York and is advising clients.
