Cavuto: Sweet Deal for Czars

Missed Wednesday's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

Forget car czar.

Try..just "bi-czar."

Here's the deal.

It'd be like having a party but the guest of honor never shows up.

An auto task force hearing, but the guy who heads that task force doesn't pop up.

I don't know if he sent his regrets.

Or even felt he had to.

That's the thing about being a car czar. You kinda do what you want.

Even though you're overseeing and spending a lot more dollars than taxpayers want.

But apparently that's Steve Rattner's call.

Not theirs.

Just like it's his call if he wants to soil himself speaking before an annoying Congressional committee.

Not that committee's.

Steve can pretty much do what he wants.

Because he was appointed by the President.

And is accountable only to the President.

Sweet.

Part of a sweet 16 group of czars for whom life is very sweet, indeed.

I know I’ve pounded this czar thing, this master thing, this grand poo-bah thing, this "whatever the hell we call these various task force titans" thing...

But hear me out on this thing.

Together, they control nearly two trillion bucks of our money, and our industries, and our auto companies, and our banks, and yes, our very environment...Remember, there's a Great Lakes czar, too, whose purview, I’m told, includes everything from trout to, I kid you not...Sucker fish..

So dismiss all you want the car czar taking a car somewhere else today.

Ask yourself what could be more important than simply explaining to the nation, what the hell you're doing today.

Fed Issues First of New Monthly Reports on Rescue Programs

Starting Wednesday, the Federal Reserve will begin releasing a monthly report on its finances, including details of the multiple emergency credit and liquidity programs it launched in the last year to help stabilize the financial system.

The new monthly document will supplement existing weekly Fed financial reports, as well as its comprehensive annual report.

Fed officials said the new report was created as part of Chairman Ben Bernanke’s ongoing commitment to improve disclosure and transparency at the central bank, especially with the creation of its complex financial stabilization programs. The officials said the report also meets new mandates from Congress for additional disclosure.

A Fed official said the report is intended to assure people that the Fed is a “careful steward” of its resources and that all borrowings by financial firms in its new programs are “more than adequately covered” by collateral.

Among other items in the report for June, the Fed disclosed that in the first quarter of 2009, it had:

--earned a profit of $4.5 billion on its $1.1 trillion in expanded holdings of U.S. government and other securities

--earned a profit of $1.2 billion on its multiple loan and liquidity programs

--earned a profit of $2.1 billion on its special facility for commercial paper liquidity

--lost $5.3 billion in the value of lower grade investments held in special entities created in the failure of Bear Stearns and near-failure of American International Group (AIG) last year. A Fed official said the losses were generated by write-downs in the values of investments, which are mainly deteriorating commercial and residential mortgages. But he said the investments were taken over by the Fed after they had been written down significantly by Bear Stearns and AIG, and that the Fed expects to hold the investments to maturity or, if for sale, until values recover, to maximize their value.

Fed officials said the increased disclosure in the report is unrelated to recent Freedom of Information Act requests from FOX Business and others seeking details of its new programs.

Federal Reserve Monthly Report for June

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Chrysler-Fiat Deal Signed, Company Exits Chap. 11

Chrysler announced the sale of its "good" assets to New Chrysler, an entity to be led by Italian auto maker Fiat SpA.

In a simple announcement Wednesday morning, Fiat closed its purchase and alliance with Chrysler after the U.S. Supreme Court denied an emergency appeal from some of Chrysler's creditors Tuesday evening.

Robert Kidder was appointed to serve as chairman of the New Chrysler and Sergio Marchionne as CEO.Jim Press, who joined Chrysler after being with Toyota, will become deputy CEO and advisor to Marchionne.

The new company now exits Chapter 11 bankruptcy after only 40 days in bankruptcy with $6 billion in exit financing. In a statement, the "new" Chrysler said it plans to begin operations immediately.

"This is a very significant day, not only for Chrysler and its dedicated employees, but for the global automotive industry as a whole," Marchionne said in a statement.

Weigh In: Are you more or less likely to buy a car from Chrysler now--comment below

Under the terms of the agreement with the U.S. Bankruptcy Court of the Southern District of New York, Fiat will now own a 20% equity stake in the new company, which will grow to a 35% stake if certain milestones are achieved. Fiat cannot own a majority stake until all taxpayer funds are returned.

The United Auto Workers union, through its VEBA health care trust, owns a 55% stake in the company, while the U.S. taxpayer owns a 8% stake in Chrysler.

In a memo to Chrysler employees, Marchionne said, "Chrysler is now a more focused and nimble company that will benefit greatly from its new global strategic alliance with Fiat."

For consumers, little has officially changed other than the parent company of the Detroit auto maker. Chrysler will, for the time being, continue to manufacture its Dodge, Jeep and Chrysler brands. As the engineering operations between Fiat and Chrysler are integrated, consumers should begin seeing models like the Fiat 500 in showrooms.

Chrysler, which already was the smallest of Detroit's Big Three auto makers, now walks away even smaller. The 789 dealerships Chrysler designated to be closed have just a week to sell their remaining cars; their leftover inventories will be redistributed among the company's surviving members.

Any obstacles to the sale of Chrysler became void after Justice Ruth Bader Ginsburg's temporary stay was lifted on Tuesday by the High Court. Originally some of Chrysler's creditors, most notably representatives of some Indiana pension funds, had objected to the sale and asked for a stay in the sale, arguing that some bankruptcy law protections were voided in exchange for expediency.

In its statement, the Court noted that the denial wasn't based on the legal merits per se, but on such factors as whether a majority of the justices would see the lower-court decisions as erroneous.

The step enabled "the previously announced global strategic alliance, forming a vibrant new car company, to proceed," Chrysler announced in a statement Tuesday night.

READ the Supreme Court's Official Order

Chrysler and Fiat had both said throughout the proceedings that their deal must be completed quickly.

Fiat’s CEO had said the company would never walk away from the Chrysler deal, but a court filing by the company noted that if the deal didn't get done soon, it would at the very least have to be re-worked.

See our Chrysler page for the latest videos and news on the auto maker.

Fiat was the only prominent company to put an offer on the table to purchase Chrysler, and was the one designated by the White House as the best option for the bankrupt auto maker. The company has changed hands three different times in the past 10 years, starting with the 1998 deal between Chrysler and Germany's Daimler. Daimler then sold its stake in 2007 to private equity firm Cerberus Capital Management, who was unable to turn around the company in time.

"During my 38 years in business, I’ve never faced a tougher challenge," former Chrysler CEO Robert Nardelli said in an exit letter to employees. "Even with our early and aggressive restructuring efforts, we could not offset the negative impact of the financial crisis and the severe economic recession."

Correction: This article originally stated Jim Press was from Ford Motor Co. Press actually came from Toyota before coming to Chrysler in 2007.

Cavuto: The Pay Czar Knows No Limits

Missed Tuesday's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

Kenneth R. Feinberg.

Don't know the name?

Don't worry.

Pretty soon, he'll know yours.

Here's the deal.

And here I thought I was chatting with the boss yesterday.

Turns out it isn't Rupert Murdoch.

It's Ken.

And lest you think I’m stretching the point saying the Obama Administration's pay czar is going to soon be my pay czar or your pay "czar," think about this.

Ken starts out overseeing pay at federally rescued institutions…which could explain a bunch of 'em eagerly offering to pay back that dough ASAP.

Especially when he's called a "Master of Compensation?"

Masters generally don't soil themselves with a specific industry, or a specific group…masters tend to branch out.

Because when you're in charge of compensation, you're in charge of a lot.

And when it comes to compensation, let's just say Ken knows a lot. And Ken has done a lot.

Ken's the guy who doled out federal relief dough to 9/11 victims' families.

And years later, did the same for loved ones of those Virginia Tech shooting victims.

Let's just say, sadly, Ken knows victims.

And this time he's setting the pay for the very folks who many argue left a trail of financial victims.

But before you cheer his charge, remember his charge.

He's the face of government changing the face of the financial system..

Setting pay for CEOs, and brokers, bankers, and even their assistants.

And in setting such pay for firms taken over, what firm wouldn't be watching the new pay levels ken is making over?

The talk is Ken Feinberg drives a hard bargain, which is a good quality when you're doling out government cash.

But after the government cash has been doled out?

This, I can't figure out.

All I know is that Ken is a compensation master.

And right now, the financial world is his oyster.

For now.

Because that's the thing about masters. They move over to other oysters.

After all, look at Ken.

This is his third oyster.

Market Winners and Losers: Allegheny Energy, MBIA Incorporated

The markets ended mostly flat Friday after a mixed bag of unemployment data. The Dow finished up 0.15%, the Nasdaq finished down 0.25% and the S&P 500 ended down 0.03%.

Here are some of Friday’s market winners and losers.

Winners

AK Steel Holding Corp. (AKS) Shares of AK Steel continued to rise Friday after Thursday’s announcement of a $70 surcharge to all invoices for July 2009 shipped orders of electrical and stainless steels. Rising steel prices may be indicative of higher demand and the stock rallied 6.8% to close at $17.63, up $1.14.

Flir Systems Inc. (FLIR) Defense contractor Flir rallied Friday after an earlier announcement that competitor Axsys Technologies would be acquired by General Dynamics. Raymond James analysts say the $634 million cost of that acquisition is higher than the valuation of Flir despite Axsys narrower market and that Flir may be under-valued and due for a rise. Shares were up 6% gaining $1.38 to close at $24.50.

Monster Worldwide Inc. (MWW) As job losses slowed this month, there is hope that a rebound in the job sector may be on the horizon. Shares of many staffing companies rallied Friday led by Monster Worldwide, which closed at $24.50, up $1.38 or 6%.

Interpublic Group of Companies (IPG) The advertising and marketing company reported Friday that its revised exposure to the General Motor’s bankruptcy was $50 million. Company executives had previously indicated that they might be owed as much as $150 million. This reduced exposure helped drive the stock up 5.6% to close at $5.70, a gain 30 cents.

Allegheny Energy Inc. (AYE) Shares of electricity provider were up 5.3% Friday after the market responded positively to the results of the second round of auctions to purchase power starting in 2011. The stock closed at $26.62, up $1.33 or 5.3%.

Losers

Ciena Corporation. (CIEN) Shares of communications networking equipment company were down Friday after the company reported disappointing earnings last night with a larger than expected loss per share of 25 cents. The stock closed at $10.77 down 86 cents or 7.4%.

Harley Davidson Inc. (HOG) The company hit a bumpy road after Citigroup analysts cut the stock’s rating to "sell" from "hold" citing weak retail sales trends and international sales. Shares were down $1.26 or 6.7% closing at $17.45.

E.I. Du Pont De Nemours & Co (DD) Shares of the diversified chemical company dropped Friday after analysts at Bank of America downgraded the stock to "underperform" from "neutral" based on valuation and company fundamentals concerns. Shares ended at $27.00 down $1.71 or 6%.

Newport Mining Corp. (NEM) Newport Mining shares, which have been performing well recently, lost 5.5% Friday as investors seemed to be cashing in on recent gains in materials stocks. This profit-taking drove the stock down $2.60 to close at $44.84.

MBIA Incorporated (MBI) Shares of this insurance company were down 5.4% after Standard & Poor’s downgraded its counterparty credit rating. Shares closed at $6.28, down 36 cents or 5.4%.

Appeals Court Upholds Chrysler's Sale to Fiat

A U.S. Court of Appeals ruled to uphold the sale of Chrysler to Fiat SpA -- a sale which was approved in a ruling by Judge Albert Gonzalez earlier this week.

Glenn Kurtz, a lawyer with the White & Case law firm represents several Indiana state pension funds who had appealed the ruling, but that appeal was denied, Friday.

Kurtz and the pension funds can still try and file an appeal with the US Supreme Court until June 8 at 4:00 pm (ET), when the deal officially closes. In an interview with FOX Business correspondent Adam Shapiro, he indicated that he is prepared to ask the Supreme Court to hear their appeal, and he has until Monday to do so.

“The last we left it Chrysler did not yet have regulatory approval so they couldn’t close—I don’t know if they’ve obtained that since but my expectation is that they will work vigilantly to close immediately in an effort to moot out any further appeals.”

Kurtz said that despite the June 15 deadline that Fiat set for closure of the transaction, he anticipates that there is plenty of time for the Supreme Court to hear the case.

“Cars aren’t going back into production until mid-August,” Kurtz said. “I suspect we have quite a bit of time before there’s any real need to close this transaction.”

Rep. Frank Supports Idea of a 'Council of Regulators'

The powerful chairman of the House Financial Services Committee supports a “council of regulators” to monitor the health of large financial institutions as part of a package of reforms Congress will begin to consider later this month, a person familiar with the matter said.

Rep. Barney Frank (D-Mass.) has begun sharing his views on possible measures designed to prevent future financial meltdowns, the source said. The Obama Administration is working on its own reform proposals, which it is expected to send to Capital Hill within two weeks.

The source said Frank’s views are preliminary and fluid, and that they could change as the Administration continues its work and as the legislative process moves forward.

A regulatory council would monitor firms that pose a “systemic risk” to the financial system. It would bring together the Federal Reserve, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and other financial market supervisors in a coordinated, umbrella entity.

Frank’s support for the idea could dash proposals to give such powers to the Federal Reserve. While the administration has signaled support for making the Fed the sole systemic risk regulator, Frank’s counterpart in the Senate, Sen. Christopher Dodd (D-Conn.), chairman of the Senate Banking Committee, favors the regulatory council idea.

According to the source, Frank also favors giving existing bank supervisors new powers to close failing institutions without putting them into bankruptcy. Some policymakers have called for giving such powers solely to the FDIC, which currently can take over failing banks but does not have authority to take over larger, more complex financial firms like AIG. Under Frank’s preliminary plan, the FDIC would assist “primary regulators” in winding down a failed concern, helping them sell assets, merge operations with stronger and take other steps.

Such power-sharing arrangements for monitoring systemic risk and closing failed firms could quell emerging turf battles among regulators and speed Congressional approval of compromise proposals.

Frank also backs creating a new government entity to improve consumer protections in the sale and marketing of consumer financial products such as mortgages, credit cards and mutual funds, the source said. Some members of Congress have introduced legislation to create a “Financial Product Safety Commission,” modeled after the existing Consumer Product Safety Commission.

A spokesperson for Frank said, “We do not comment on rumor or hearsay such as this. All this speculation is not only unproductive--it is premature, given the President has yet to introduce his proposal.”