Bank of America To Buy Back 75 Million Shares

This news was released by Bloomberg simultaneously with an early release of the Fed's Beige Book which spoke about the "morose mood" of the public (morose: showing a brooding, gloomy, or sullen mood).

Doug Kass reports that "bank stocks just moved up on a story on the newswires that Bank of America (BAC) is going to buy back 75 miillion shares. Actually Bank of America is reducing its expiring 200-million-share buyback to 75 million shares (it had remaining authority of 190 million shares)."

Financial sector 'welfare queens' or just a simple case of market manipulation? Probably some of both.

It does not get much more "in-your-face" than this.


Bank of America to buy back up to 75 million shares
By Alistair Barr
1:52 p.m. EDT July 23, 2008

SAN FRANCISCO (MarketWatch) -- Bank of America said on Wednesday that it will buy back up to 75 million shares. The board authorized the giant bank to spend as much as $3.75 billion to repurchase stock during the next 12 to 18 months, it explained. The new program replaces an earlier 200 million-share buy-back plan that is expiring. Bank of America shares climbed 3.3% to $33.42 during afternoon trading on Wednesday.

AP
Bank of America declares dividend of 64 cents
Wednesday July 23, 1:55 pm ET
Bank of America declares dividend of 64 cents to be paid Sept. 26

CHARLOTTE, N.C. (AP) -- Bank of America Corp. on Wednesday declared a regular dividend of 64 cents.
The dividend will be paid Sept. 26 to shareholders of record on Sept. 5.

The board also declared a dividend of $1.75 for its 7 percent cumulative redeemable preferred stock, series B. That dividend will be paid Oct. 24 to shareholders of record on Oct. 8.

Congress Agrees to Bail out Fannie and Freddie

The dilution of the United States dollar to enable a de facto debt default has begun. The only way this will be feasible is if several of the other major currencies are inflated in sympathy with the dollar.

The dollar 'rally' and coordinated pressure on the metals and oil today that was ignored by the bond market makes a little more sense now with regard to timing.

Vote out all Republicans and the Democratic leadership this fall.

U.S. Lawmakers Reach Deal on Fannie, Freddie Bill
By Brian Faler

July 22 Bloomberg -- U.S. lawmakers reached agreement on a rescue plan for Fannie Mae and Freddie Mac that the House may vote on tomorrow, Representative Barney Frank said.

Under a modified version of proposals made by the Bush administration, the Treasury Department would gain authority to inject capital into the two largest U.S. mortgage finance companies, through loans and equity investments.

The agreement is the clearest indication yet that Congress will approve a backstop for the beleaguered companies, which Treasury Secretary Henry Paulson said today is essential for safeguarding U.S. financial market stability. Lawmakers added the provisions to legislation that would create a stronger regulator for Fannie Mae and Freddie Mac and expand federal efforts to stem mortgage foreclosures.

``The package we have got is fully acceptable'' to the Treasury and Senate lawmakers, Frank, a Massachusetts Democrat who chairs the House Financial Services Committee, told reporters in Washington today. ``Nobody is for everything that's in it or got everything in it he wanted, but we negotiated a lot.''

Treasury spokeswoman Brookly McLaughlin said in an e-mailed response to a question that the department is reviewing the language of the bill, which is 694 pages.

Crossing White House

Frank said lawmakers, defying a White House veto threat, decided to keep provisions for $3.9 billion to help local communities buy up foreclosed properties. The Bush administration opposed the idea because it said it would aid lenders who now owned the vacated properties, not struggling homeowners.

``It's clear that the Democrats chose to play politics with the legislation,'' White House spokesman Tony Fratto said in an e-mail, without mentioning any veto plans. He echoed McLaughlin that officials are reviewing the bill.

The Treasury would be barred from providing aid that would cause a breach in the federal debt ceiling under the agreement, a constraint aimed at limiting any taxpayer losses. The debt limit would be raised to $10.6 trillion from the current $9.815 trillion.

The plan would give Paulson power to restrict the companies' dividend payments and require regulatory approval of the salaries of top executives. (But we're not nationalizing them right? - Jesse)

Higher Cap

The legislation would also raise the limit on the size of the mortgages the companies may purchase. The new cap would be $625,000, or the median home price plus 15 percent, whichever is lower, Frank said.

Frank's counterpart in the Senate issued a statement indicating he backs the bill now progressing in the House.

``We have been engaged in extensive and largely fruitful discussions with our counterparts in the House'' and with Bush administration officials, Democratic Senator Christopher Dodd said in a joint statement with Republican Senator Richard Shelby distributed by e-mail. ``We remain optimistic about the prospects for this legislation.''

Dodd, of Connecticut, chairs the Senate Banking Committee and Shelby, of Alabama, is the panel's top Republican. (Dodd is the Senator who took the inexpensive mortgage from Countrywide - Jesse)

Paulson, who proposed a rescue program on July 13, reiterated today the plan is aimed at restoring investor confidence in the two companies.

Slide in Stocks

Fannie Mae has dropped about 45 percent in the past month, and Freddie Mac has tumbled about 60 percent, on concern the companies have insufficient capital to cover writedowns and losses amid the mortgage-market collapse.

Lawmakers wrapped the plan into a housing bill that would create a program aimed to help an estimated 400,000 Americans with subprime home loans refinance into 30-year, fixed-rate mortgages backed by the government.

The legislation includes tax breaks to help prop up the housing industry, including what would be the equivalent of an interest-free loan worth as much as $7,500 for first-time homebuyers.

The bill also would allow taxpayers who don't itemize their tax returns to temporarily claim a property-tax deduction, said Representative Richard Neal, a Democrat from Massachusetts and member of the Ways and Means Committee. States could offer an additional $11 billion of mortgage-revenue bonds to refinance subprime loans.

Final Approval

The Senate may vote on the legislation as early as July 24, said Jim Manley, a spokesman for Senate Majority Leader Harry Reid of Nevada. The bill would then go to President George W. Bush for final approval.

A Congressional Budget Office estimate released today put the cost of Paulson's plan at $25 billion, a figure below the total that some lawmakers had expressed concern about. (LOL, like the early estimates on the Iraq war. 25 billion. Is that why they lifted the debt limit by about 800 billion? And that's for openers. - Jesse)

``It's pretty good news -- a lot of people thought it would be much higher,'' Shelby said earlier today. (ROFLMAO - Don't worry it will be - Jesse)

Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac own or guarantee about half of the $12 trillion in outstanding home loans.

The companies, which buy mortgages from banks, face mounting losses stemming from the collapse of the subprime home loan market.

Lawmakers rejected a proposal to bar Fannie Mae and Freddie Mac from paying dividends while they are tapping the expanded line of credit with Treasury, Frank said. They decided instead to give Paulson the power to restrict such payments or to take preferred stock in the companies, he said.

``It's not a mandate,'' Frank said. ``He's got to have some flexibility.'' (And a wide stance - Jesse)

Paulson wanted Congress to grant the Treasury temporary authority to buy stock in the companies and offer an unlimited federal credit line.

Oil Trading Losses Take 12th Largest Non-Public US Company Into Bankruptcy

Their mistake was that they were not 'too big to fail' and were not protected by one of the Fed's banking syndicate.

Remember this when one or more of the metals shorts are brought to their knees, and they whine to the Treasury and CFTC to force a cash settlement on their predatory short positions.

Hank Paulson had an interesting quote about bailing out hedge funds today:

"We also need additional powers to manage the resolution, or wind-down, of large non-depository financial institutions, such as larger hedge funds, so as to limit the impact of a failure on the broader financial system."

Huge oil trading loss sinks energy trader SemGroup
By Robert Campbell
Tuesday July 22, 3:58 pm ET
Guardian UK

NEW YORK (Reuters) - SemGroup LP declared bankruptcy on Tuesday after $3.2 billion in oil-trading losses torpedoed what had been the 12th-largest private U.S. company.

The Tulsa, Oklahoma-based company racked up the massive losses as oil prices ran up record gains, undercutting short crude futures positions SemGroup bought to hedge against its 500,000 barrel-per-day trading business.

Officials said SemGroup, in order to meet obligations to creditors, plans to sell off oil and natural gas gathering, transportation, and storage assets purchased in a whirlwind of acquisitions since it was founded in 2000.

"We have determined that the best way to maximize value for our creditors is to undertake a sales process that will transition our valuable businesses to well-established companies," Terry Ronan, SemGroup's acting chief executive, said in a statement.

SemGroup was forced to take a $2.4 billion loss on July 16 after it transferred its NYMEX trading account to Barclays Plc. The firm had accounted for this position as "loss contingencies," according to its bankruptcy filing in Delaware federal court.

Included in the NYMEX losses is $290 million owed to SemGroup by a trading company owned by SemGroup's co-founder and former chief executive, Thomas Kivisto, who was placed on administrative leave on July 17.

SemGroup had engaged in regular hedging transactions with BOK Financial Corp, where Kivisto had been a board member since 2006 before resigning on July 16. As of the end of 2007, SemGroup had hedged 21 million barrels of crude oil with BOK, which had a fair value of negative $130 million.

At the end of March, this position was worth negative $88 million, said BOK spokesman Jesse Boudiette, who declined to comment on BOK's current exposure to SemGroup, saying the bank would not speak publicly about individual clients.

LOSSES

SemGroup, ranked the No. 12 private U.S. company by Forbes.com in 2007, incurred $850 million in losses on July 17 when its over-the-counter hedging program was marked to market.

SemGroup listed assets of $6.14 billion and liabilities of $7.53 billion in its bankruptcy filing. Liabilities included $3.1 billion of total debt, including $2 billion of secured debt and $594 million in unsecured notes.

SemGroup's financial difficulties were disclosed by its publicly traded affiliate SemGroup Energy Partners LP (NasdaqGM:SGLP) last week, when it warned that a liquidity crisis at its parent could lead to a bankruptcy filing. SemGroup Energy Partners and its general partner are not part of the bankruptcy filing.

Two hedge funds took control of SemGroup Energy Partners' general partner last week under the terms of a loan.

SemGroup Energy Partners management said it was confident the partnership could survive despite SemGroup's bankruptcy and would seek new business from third parties. The company's board has also authorized management to consider a sale or merger.

SemGroup Energy Partners also warned it was not ready to say if it would make a cash distribution to unitholders in the second quarter, though its management believes parent SemGroup will continue to use its fee-based assets to maintain operations while in bankruptcy.

One of the Remaing Bond Insurers Implodes As Hank Paints the Tape

And so we have a pathetically obvious intervention in the markets today to help to curb the declines in shares and bolster the dollar as banks declare more losses and one of the few remaining bond insurers implodes.

What would the penalty be for dynamiting bridges used by the public evacuating the shore areas from the approach of an incoming tsunami?

The market intervention 'for the good of the public' is being used to further line the pockets of the Wall Street wiseguys. Its a dirty business.


Assured Guaranty Plunges, Bond Risk Soars on Review
By Christine Richard and Shannon D. Harrington
July 22, 2008 11:11 EDT

July 22 Bloomberg -- Assured Guaranty Ltd., one of two bond insurers with a AAA ranking from the three major ratings companies, fell as much as 58 percent in New York trading after Moody's Investors Service said it may downgrade the firm.

The cost to protect against a default by Assured Guaranty soared to a record. Credit-default swaps on Financial Security Assurance Holdings Ltd., the unit of Europe's Dexia SA that was also placed under scrutiny by Moody's, also rose to a record.

Moody's review is a blow to Hamilton, Bermuda-based Assured Assured Guaranty and Financial Security of New York, the only two bond insurers to maintain their top ratings as losses in the industry crippled competitors. The companies are dominating new municipal bond insurance and seeking to fend off Warren Buffett, whose new bond insurer was awarded a Aaa rating. Without a Aaa stamp, former market leaders MBIA Inc. and Ambac Financial Group Inc., have seen their new business plunge.

``Potentially all the legacy companies are gone now,'' said Rob Haines, an analyst with CreditSights in New York. ``It has huge implications for the municipal bond market and for banks that may have to take another round of writedowns. It's just a mess.''

Assured Guaranty fell $9.45, or 50 percent, to $9.30 as of 10:45 a.m. in New York Stock Exchange composite trading after Moody's said late yesterday it's reviewing the financial strength ratings of the companies, which had avoided ratings reviews while five competitors lost their top rankings this year because of escalating losses on securities linked to U.S. home loans....