Reports of Small-time Crime March On

Even in a time of large-scale financial wrongdoing, allegations of smaller-scale crimes march on.Two peculiar cases showed up in press reports from the Midwest and West Coast over the weekend. One, in San Marcos, Calif., involved charges of embezzlement by a financial executive alleged to have us...

By Stephen Taub • March 9, 2009

Whom the Cap Fits

America’s hard-nosed politicians are not always moved by lofty rhetoric, but talk about money normally gets them going. That, at any rate, must be what Barack Obama is assuming, judging by the approach to climate change outlined in his ten-year budget plan.Throughout his campaign for the presiden...

By Economist Staff • March 9, 2009

AIG Insurance CFO: We’re Not Like Papa

Like the child of a convict, the property-casualty insurance business of American International Group is struggling to distinguish itself from its embarrassing parent.Trying to assure corporate policyholders that there’s more than enough capital to cover their claims, Robert Schimek, CFO of AIG’s...

By David Katz • March 6, 2009

No bailout for Europe’s carmakers

The European Union’s industry ministers have promised to speed up access to finance for Europe’s troubled car industry, but reaffirmed that there would be no bailout to help the industry through the slump.“The main responsibility is for the automotive sector itself. It has to shoulder this respon...

By European Voice Staff • March 6, 2009

The View from West Virginia

His bedside manner would unnerve the most stoical of patients. In the past eight years, says Barack Obama, health-insurance premiums have grown four times faster than wages. Every year a million Americans lose their coverage. The crushing cost of health care causes a bankruptcy every 30 seconds, ...

By Economist Staff • March 6, 2009

Wishful, and Dangerous, Thinking

A president’s first budget proposal is more than a set of figures. It is also an outline of his philosophy of government. The plan Barack Obama delivered on February 26th envisages an ambitious and costly expansion of the government’s role in the lives of Americans. Its centrepiece is a big expan...

By Economist Staff • March 6, 2009

Three Krispy Kreme Ex-Execs Settle SEC Charges

Krispy Kreme Doughnuts Inc.’s former CEO and two former CFOs settled Securities and Exchange Commission charges that the three were instrumental in inflating earnings of the then-fast-growing restaurant chain in an alleged scheme designed to boost their compensation.The three —ex-chairman, presid...

By Stephen Taub • March 5, 2009

House GOP Alters Strategy; Now Attacking Obama

House Republicans have been lining up one after the other this week to attack President Barack Obama and his budget, a clear shift from their previous strategy of directing their fire squarely at Speaker Nancy Pelosi (D-Calif.) and Congressional Democrats.At a closed-door meeting of the House Rep...

By Roll Call Staff • March 4, 2009

In a State

At each lurch downwards in the financial crisis, American International Group (AIG) has played an infamous starring role. Yet again, as the Dow Jones Industrial Average closed below 6,800 on Monday March 2nd, its lowest level in almost 12 years the company deemed to be too big to fail has proven ...

By Economist Staff • March 3, 2009

The Incredible Shrinking Dividend

The pace of dividend cuts by cash-hungry firms picked up, with three major companies drastically paring their payouts on Monday.The rash of cuts – by PNC Finanical Services Group Inc., HSBC, and International Paper – came on top of General Electric’s long-anticipated 68 percent reduction on Frida...

By Stephen Taub • March 2, 2009

Insurance Woes Touch Hartford, Conseco

It has been a day of blows for big insurers. A.M. Best downgraded a number of Hartford Financial Services Group Inc. ratings. And Conseco Inc. said its accounting firm informed it that the latest year’s audit opinion will include a question about the company’s ability to continue as a going conce...

By Stephen Taub • March 2, 2009

AIG Spins Off Units to Government

The government’s latest capital-lifeline plan for AIG involves the company turning two of its subsidiaries into special purpose vehicles.In effect, AIG’s American International Assurance Co. and American Life Insurance Co. will now be owned by the New York Fed — which will receive up to $26 billi...

By Sarah Johnson • March 2, 2009

Tearing Down the Walls

A growing number of companies are giving old office buildings and factories a green makeover. For some this comes as part of corporate social responsibility efforts while for others, legislation, such as the EU’s new Energy Performance for Buildings Directive, is the main motivation.But in today’...

By Christopher Watts • March 2, 2009

A Prayer for the Not-Quite-Dying

For accounting firms, a crisis breeds new opportunities — for crisis management. Since October, firms such as WithumSmith & Brown, J.H. Cohn, and Wipfli have launched crisis-management or economic-recovery practices, offering to help struggling companies in areas from cash management and work...

By Kate Plourd • March 1, 2009

S&P Less Sure of Life Insurance Industry

Standard & Poor’s cut its counterparty credit and financial strength ratings for 10 groups of U.S. life insurers and counterparty credit ratings on seven life insurance holding companies.The agency also placed two groups of U.S. life insurers, one of which was downgraded, on CreditWatch with ...

By Stephen Taub • Feb. 27, 2009

Obama Asks for 13 Percent SEC Budget Boost

Declaring that over the past year “the consequences of poor market oversight became abundantly clear,” President Obama asked for a 13 percent boost in the Securities and Exchange Commission’s budget over what it was in 2008 as part of the overall national budget request he issued Thursday.  For t...

By David Katz • Feb. 27, 2009

General Re Settles with Ohio over AIG Case

General Reinsurance Corp. agreed to pay $72 million to settle investors’ claims, according to Ohio Attorney General Richard Cordray.The lawsuit stemmed from transactions between General Re, a subsidiary of the Warren Buffett-controlled Berkshire Hathaway Inc., and American International Group, th...

By Stephen Taub • Feb. 26, 2009

A Ghoulish Prospect

In a classic horror film, “Night of the Living Dead,” a terrified group of people barricade themselves in a rural farmhouse to escape hordes of flesh-eating zombies. Today Americans are gripped by a similar fear, but this time the walking corpses in their nightmares are banks, tearing insatiably ...

By Economist Staff • Feb. 26, 2009

Lawmakers of Both Parties Quick to Praise Speech

Democrats and Republicans on Capitol Hill struck bipartisan notes of praise for President Barack Obama’s first address to Congress – although with clearly different levels of enthusiasm for the specifics of Obama’s speech.Democrats described themselves as “euphoric” while Republicans praised the ...

By Roll Call Staff • Feb. 25, 2009

Cheered by Obama Talk, CFOs Still Fret Lack of Detail

The uplifting tone of President Obama’s speech to Congress Tuesday night impressed the half-dozen finance executives that CFO.com interviewed on the subject today. But they were also concerned by the president’s vagueness about the steps being planned by the government to help restore the economi...

By Sarah Johnson and Kate Plourd • Feb. 25, 2009

A Brighter Future, but Who Pays?

As a new president, Barack Obama’s first speech to Congress was not, officially, a state-of-the-union address. That was just as well: its current state is awfully precarious. On Tuesday February 24th, a few hours before he spoke to the Senate and House of Representatives, a survey reported that c...

By Economist Staff • Feb. 25, 2009

Bankrupt Delphi Told It Can Cancel Retiree Benefits

Delphi Corp received bankruptcy court permission to cancel benefits for 15,000 retirees, which would enable the bankrupt auto parts maker to save more than $70 million annually.As a result, according to a report on the court proceedings in the Detroit News, on April 1 Delphi could cancel salaried...

By Stephen Taub • Feb. 24, 2009

Bernanke: U.S. Action Could End Recession in 2009

Federal Reserve chairman Ben Bernanke believes there is “a reasonable prospect” that federal government success in restoring financial stability could bring about an end to the recession this year, so that “2010 will be a year of recovery.” In testimony before the Senate Banking Committee on Tues...

By Roy Harris • Feb. 24, 2009

CNA Sues Its Ex-CFO over Stock Loan

CNA Financial Corp. is suing its former chief financial officer over a loan that it allegedly made to him, but that the big insurer says he refuses to repay.Peter E. Jokiel, who left CNA in 2001, is alleged in the suit to owe the company more than $2.8 million from a loan he took out 10 years ago...

By Stephen Taub • Feb. 23, 2009

New SEC Enforcer Was a Bank Lawyer, Prosecutor

The Securities and Exchange Commission named as its director of enforcement Robert Khuzami, a former bank lawyer who, on behalf of his company, lobbied for easing regulations related to “complex structured-finance transactions.”The 52-year-old Khuzami, also has a long record as a tough federal pr...

By Marie Leone • Feb. 19, 2009