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A U.S. Parallel to Dubai World – By AGNES CRANE and WEI GU – … But creditors of the two mortgage finance giants should not forget that, like Dubai’s investment arm, they have only implicit government backing … Even setting aside domestic concerns, a default by the two on what has long been seen as quasi-sovereign debt would torpedo America’s reputation in international financial markets. All that helps explain why two-year bonds issued by Fannie and Freddie are at levels reminiscent of a precrisis world, trading this week with yields in the area of 18 to 20 basis points less than benchmark swap rates. … – NY Times
What Happens to Citibank’s $8 Billion Loan to Dubai? – by Washington – On Friday, I provided some specifics about who had loaned Dubai money, and the potential fallout from Dubai’s debt crisis. But I just found another interesting tidbit. Specifically, 7 Days – one of the largest papers in Dubai – wrote in March: The US public will be “outraged” by Citibank’s $8 billion loan to Dubai just six weeks after the bank was bailed out, … – Washington’s Blog
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Bank of America to repay U.S.- Firm will be first to reimburse taxpayers completely for bailout – Bank of America says the repayment of $45 billion in taxpayer aid shows the strength of the company. – By Binyamin Appelbaum – Washington Post
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BofA’s TARP repayment puts pressure on Citi, Wells – By STEVENSON JACOBS – Bank of America’s surprise move to pay back $45 billion in federal bailout money ratchets up pressure on rivals Wells Fargo and Citigroup to get out from under the government’s thumb. But don’t expect it to happen anytime soon. – AP Yahoo
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Geithner Expects Bailout Program to End Soon – By THE ASSOCIATED PRESS – Timothy F. Geithner affirmed Wednesday the administration’s intent to end the $700 billion financial bailout program soon. – NY Times
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NY Fed’s Sack: Exit RPs May Not Work as Some Anticipate – Federal Reserve Bank of New York Executive Vice President Brian Sack Wednesday night said he doesn’t think reverse repos will work as some anticipate but the Fed can compensate by raising rates more than otherwise and with asset sales. … However, Sack said, “My own perspective differs.” He said he sees the effects of the asset purchases arising “primarily from the removal of duration and prepayment risk from the markets, based on the portfolio-balance effects.” So those effects, he said, “would not be unwound by draining reserves with reverse repos or term deposits.” … No worries, though, because, he said, “as long as the FOMC has control of short-term interest rates, … – imarketnews.com
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U.S. Taxpayers May Reap $3.17 Billion in TARP Warrant Auctions – By Peter Eichenbaum – … from the first auctions of warrants demanded by the government for bailing out banks, including Capital One Financial Corp., JPMorgan Chase & Co. and TCF Financial Corp. … The auction was set after the agency and the bank couldn’t agree on a price for selling the warrants back to Capital One … – Bloomberg
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Why The Government Jobs Policy Isn’t Working – Mark Sunshine – … The problem with jobs growth in the U.S. is pretty simple; many small and medium size companies have demand for their goods and services but can’t get financing to grow. … – The Sunshine Report
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Senator Bunning to Bernanke “You are the definition of a moral hazard. Your Fed has become the Creature From Jekyll Island” – Michael Shedlock – many good quotes and a video of the senator opposing Bernanke’s renomination – MISH’s Global Economic Trend Analysis
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China wary of gold ‘bubble’ danger after quietly doubling its reserves – By Ambrose Evans-Pritchard – The Chinese authorities have given the clearest indication to date that they view the surge in gold to an all-time high of $1,217 (£730) an ounce as a speculative frenzy. – Telegraph.co.uk