Paulson Warns Against Harsh RegsThe nation is facing the economic crisis of the century, but Treasury Secretary Henry Paulson on Thursday warned against the passage of harsh financial industry regulations. Paulson, who calls the financial storm now swirling around the glob a "once or twice" in a 100 years event, warmed that imposing strict regulations would not prevent a repeat occurrence.
His speech comes a week after the G-20 summit of world leaders that pledged an overhaul of financial regulations. The next summit in the spring of 2009 will tackle the details of the changes and it is expected that President-elect Barack Obama and his yet-to-be-named new Treasury secretary will lead the charge.
FDIC Pushing Foreclosure Avoidance
The FDIC Chairman Sheila Bair is still hoping to get federal bailout money to help homeowners avoid foreclosure. Bair says longer term thinking is needed in meeting this problem, and regulators need to get back to basics to help solve the increasing number of foreclosures facing financial institutions. By the end of 2008 it is expected that more than one million bank-owned properties will be on the market, which will represent nearly one-third of all properties for sale domestically, according to RealtyTrac Inc., a foreclosure listing service. Bair says the government has to tackle unnecessary foreclosures to help stabilize the housing market. The FDIC also unveiled on Thursday its IndyMac Loan Modification Model that other institutions may use to refinance mortgages for troubled homeowners.
Big Three Asked To Produce Plan
The Big Three automakers have to show they have a plan before the federal government will give them the $25 billion they have been asking for to help keep them in business. Legislators have given them a deadline of December 2 to produce the plan that will show accountability and viability. Congress would return to consider the proposal in early December if lawmakers are convinced that the money would be well-spent. Already there is talk of the original $700 billion bailout plan being a risk and widespread dissatisfaction in the country that the money is not being used in the way it was originally intended.
Stock Losses Accelerate
Wall Street took another drubbing on Thursday, as the Dow dropped another 445 points. Stock losses accelerated at the end of the day, and all three major gauges fell to new 5.5-year lows on recession fears. Citigroup continued to bleed its market price during trading on Thursday, losing 26 percent of its worth and hitting a 15-year low, despite an increase of stock investment by its biggest investor, Saudi prince Alwaleed Bin Talal. This news is on top of Citi's announced job cuts of more than 50,000 staff and a reduction of budget by 20 percent. On Friday Citi's stocks along with the rest of the stock market rose to 2 percent on a report that Citi may put itself up on the market block or possibly selling off pieces of the company.