Financial news – Mar-07-2009
Saturday, March 7, 2009, 12:37 AM | Leave Comment
Madoff expected to plead guilty to fraud charges
Bernard Madoff, accused mastermind of a $50 billion (35.5 billion pounds) investment fraud, is expected to plead guilty to criminal charges next week, three months after his arrest shocked his customers worldwide.
A court document signed on Friday by prosecutors and Madoff’s lead attorney indicated the once-respected Wall Street trader and investment manager would waive an indictment and plead guilty to criminal charges. Reuters
GM More Open to Bankruptcy
Top General Motors Corp. executives are more open to a speedy bankruptcy reorganization financed by the government, pushing aside earlier concern that such a move would scare away so many customers the company wouldn’t survive, said a person familiar with the matter.
While the company still wants to avoid bankruptcy, the new view represents a reversal from GM’s position late last year, when it sought a federal bailout. The change in thinking, combined with the disclosure Thursday that GM’s auditor has raised “substantial doubt” about the car maker’s ability to keep going, appears to move GM closer to the possibility it will file for reorganization. Wall Street Journal
How the Rules Were Rigged
I’m sure the knowledgeable people already know this. But it turns out that one of the features of the 2005 Bankruptcy bill was to put derivative counter parties at the front of the line ahead of other creditors in bankruptcy proceedings. Actually, from what I can tell, they don’t just go to the head of the line. They got to skip the line entirely. As the Financial Times noted last fall, “the 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company’s assets until a court decides how to apportion them among creditors.” As the article notes, ironically, this provision which Wall Street pushed for and got to protect investment banks actually ended up hastening the collapse of Lehman and Bear Stearns last year. Talking Points Memo
Unemployment Hits 25-Year-High
Tolling grimly higher, the recession snatched more than 650,000 Americans’ jobs for a record third straight month in February as unemployment climbed to a quarter-century peak of 8.1 percent and surged toward even more wrenching double digits.
The human carnage from the recession, well into its second year, now stands at 4.4 million lost jobs. Some 12.5 million people are searching for work – more than the population of the entire state of Pennsylvania. CBS NEWS
Would You Get a MySpace Credit Card?
What’s in your wallet? Could be a credit card with your social network on it, if you so please. CitiBank has collaborated with MySpace to offer a credit card that will have a rewards program with things like access to MySpace events and free music downloads.
My days of decisions to apply for a fun rewards credit card are pretty much over; on that note, the age range that this is probably meant for is that of kids who still primarily use MySpace. Geek Sugar
Lifeblob’s Redesign Takes Social Timelines To The Next Level (Invites)
Social timelines are going mainstream (see AOL/Bebo), but startups are pushing them to the next level. Today, Lifeblob, the Indian startup working on ways for you to visualize your life on the net, is introducing a refreshed version of its social timeline creation tool. With it, you can easily patch together a visual representation of your life’s most memorable moments by timestamping certain events and enriching them with photos, text and videos. The end result can easily be shared on a variety of social services, or embedded into any blog or web page. Tech Crunch
