This week was the one-year anniversary of the fall of Lehman Brothers, the largest bankruptcy in history. Lehman’s failure was just one of several events with serious implications that led to the massive bailouts given to struggling financial institutions by the federal government in an attempt to prevent a complete meltdown of our financial system. During this week a year ago Bank of America (BAC) announced it would buy Merrill Lynch, and the government prevented the collapse of American International Group (AIG).
A tariff was imposed on Chinese tires being exported to the U.S., which created tension at a G-20 meeting. After President Obama’s announcement of these duties, China took steps toward its own tariffs on American chicken and car parts, making many worry about a potential trade war brewing between the countries.
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Nationwide Average
$2.55 a gallonTuesday
Tuesday started off with reports that Citigroup (C) is mulling a plan to repay taxpayers some of the Troubled Asset Relief Program money the bank has received. The plan would also lessen the 34% stake the federal government currently holds in the company. The Wall Street Journal recently reported that Citi would like to get rid of this stake so that it can keep regulators off its back.
Meanwhile, President Obama started pushing financial regulation reform again on Capitol Hill.It’s been made the number-two priority after reforming health care. Rep. Barney Frank (D-Mass.) may soon introduce an updated bill to put together a Consumer Financial Protection Agency. And in the Senate, Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.) have reportedly created a basic framework for that chamber's version of a bill.
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Obama Adopts Tariffs for Chinese Tires
Wednesday
But health care still remains the first priority on Capitol Hill, and Senator Max Baucus (D-Mont.), chairman of the Senate Finance Committee, finally released his version of a health-care reform bill Wednesday.
This bill, which is only a starting point since the amendment process will likely make significant changes, does not contain a highly-contested public option, which the President had been pushing, but does require that all Americans buy health insurance or face penalties.Baucus said the bill will cost $856 billion and that the Finance Committee would start meeting next week to consider it.
Meanwhile, New York Attorney General Andrew Cuomo continued his investigation into Bank of America’s purchase of Merrill Lynch on the anniversary week of the deal. He issued subpoenas to five board members, and FOX Business learned that more would probably come.
And the Dow jumped to new 2009 highs Wednesday afternoon at close. The average rose 108 points, hitting 9798, coming very close to the 10000 level.
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Martha Stewart Partners With Home DepotThursday
California Attorney General Edmund Brown launched his own investigation Thursday. Brown said he’s looking into the roles of the major credit-rating agencies may have played in the financial crisis. He issued subpoenas to Standard & Poor’s (MHP), Moody’s (MCO) and Fitch.
The House of Representatives passed a bill to prevent private lenders from issuing federal loans to students, which also included a measure to remove federal funding from controversial advocacy organization ACORN. The bill is intended to help make college more affordable to more people.
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Sec. Locke: Reform Good for Business
TARP Watchdog on Tax Dollars
Friday
A report in The Wall Street Journal Friday said the Federal Reserve is considering regulating bankers' pay. The central bank is looking to curb risk-taking at banks, and is reportedly mulling the idea of reviewing banks’ compensation policies in an attempt to ensure that these do not encourage excessive risks.
Meanwhile, Citigroup CEO Vikram Pandit said the bank is in the process of spinning off its oil trading unit Phibro. Doing so would allow it to operate outside of the oversight of the Obama Administration’s pay czar.
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$650,000 in grants to help fund affordable housing in Middle TNFOXBusiness.com’s Week in Review: July 6-10, 2009
