Treasury Toxic Asset Program Rife With Conflicts Of Interest

Treasury Toxic Asset Program Rife With Conflicts Of Interest

The hiring of private firms to provide "independent" advice to both the Treasury Department and the Federal Reserve raises concerns about potential conflicts of interest, according to a letter written by the Project on Governmental Oversight (POGO) and delivered to key members of Congress.

It seems that some of those firms will be highly familiar with the assets in question.

According to POGO's letter, the Federal Reserve Board has contracted with four firms to manage its $1.25 trillion program that purchases mortgage-backed securities. One of those firms also works with the New York Fed to manage three companies it set up to absorb toxic assets, known as Maiden Lane, Maiden Lane II and Maiden Lane III.

The four firms are Pacific Investment Management Co. (PIMCO), BlackRock, Inc., Goldman Sachs Asset Management, and Wellington Management Company, LLP.

In addition, the Treasury Department is expected to approve five private firms to manage what it is calling its "Legacy Securities Program." PIMCO and BlackRock are also on that list.

Legacy appears to be the new term for "toxic." ...

Accountants, Washington Helping Banks Fluff Profits

Accountants, Washington Helping Banks Fluff Profits

Look for another rosy round of profits when banks turn in their numbers for the second quarter ending in June when it will be legal for them to improve their balance sheets by shifting losses into the future, thanks to new accounting rules passed by a one-vote margin by the Financial Accounting Standards Board (FASB).

It's just one in a series of changes made to accounting rules that allow banks to shift or ignore losses or pretend that liabilities aren't liabilities. The struggle for control of the financial recovery -- where the money goes, how it's counted and who survives -- is nothing short of war. Truth has been the first casualty.

The latest rule change allows banks to split losses into ones that they recognize immediately and others that are pushed down the road and may pop up on the books later. It passed in April with barely any notice from the press. The accounting tricks allow banks, which may otherwise be deemed insolvent, to continue to operate. It's a hell of a time to be an accountant. ...

U.S. manufacturing sector contracts for 16th straight month_English_Xinhua

U.S. manufacturing sector contracts for 16th straight month_English_Xinhua

WASHINGTON, June 1 (Xinhua) -- Economic activity in the U.S. manufacturing sector failed to grow in May for the 16th consecutive month but at a slower pace, the Institute for Supply Management (ISM) reported Monday.
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Five of the 18 manufacturing industries reported growth last month and 13 reported contraction, according to the ISM. ...

How Health Care Stole Your Pay Raise - The Atlantic Business Channel

How Health Care Stole Your Pay Raise - The Atlantic Business Channel | Jun 3 2009, 10:35 am by Derek Thompson

This amazing graph bouncing around the web is the most striking example of why health care reform isn't just about reforming care. It's about reforming the economy. New bumper sticker: "Reform Health Care; Get a Raise!"


In layman's terms, the hard blue line is the expected growth in average wages. The dashed-purple line is what's actually appearing in workers' wallets, which is average wages minus health premiums. In other words, health care is robbing you of your bonus. ...