JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon asked Federal Reserve Chairman Ben S. Bernanke whether regulators have gone too far by reining in the U.S. banking system and are slowing economic growth.
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Federal Reserve chair Ben Bernanke has expressed concern over US debt and rising inflation in a historic press conference.
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Ottawa, Ontario, Canada (AHN) – The Supreme Court of Canada allowed Thursday the filing of a class-action lawsuit by veterans over their military pension. The action reverses an earlier decision by the Federal Court of Appeal, which was initially certified by the Federal Court.
The case stems from a suit filed by military mechanic Dennis Manuge on behalf of 6,500 injured veterans. Manuge was hurt in 2002 while assigned at the Canadian Forces Base Petawawa. When he left the military, Ottawa took back $10,000 of Manuge’s disability pension, which prompted the ex-mechanic to file the suit.
Manuge got Federal Court okay for a class action, but Ottawa appealed and secured a stay. The Court of Appeal turned down Manuge’s class-action lawsuit, ruling he should have applied for a judicial review of his case.
The basis of the Supreme Court action was a $250 million lawsuit filed by TeleZone Inc. against Industry Canada. The firm accused Ottawa of denying it a license for wireless communication services. The Ontario Superior Court of Justice allowed TeleZone’s legal action, ruling it was not necessary for the telecom firm to seek a judicial review of Industry Canada’s action.
More than 50 percent of veterans in Manuge’s class-action lawsuit have mental health problems. Manuge, who once was deployed in Bosnia, suffered depression after he injured his back at the military base in Ontario.
When Manuge was released in 2003 after nine years of service, he became eligible for long-term disability insurance benefits of 75 percent of his pay. However, Ottawa removed almost $400 – included for pain and suffering – from the amount that Manuge received monthly.
Ottawa explained the clawback for recipients of disability payments was to keep premiums as low as possible, and that such deductions were common among public and private plans during that time. Manuge’s class-action lawsuit would not apply to veterans who were injured after 2007 because by that year Veterans Affairs started to give lump-sum pain and suffering payments that were not deducted from long-term disability.
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New York, New York, United States (AHN) – The American International Group announced Wednesday it will repay the U.S. Federal Reserve $21 billion credit line. AIG will fund the repayment from the sales of two life insurers from outside the U.S.
After paying back what AIG borrowed from the regulator in 2008 at the onset of the financial crisis, the insurance giant will focus on retiring its obligations to the U.S. Treasury Department. The Treasury invested $48 billion in AIG and owns 80 percent of the company.
The Treasury said it plans to convert its AIG preferred shares into 1.66 billion shares of common stock by March 15.
The Treasury, according to reports, is planning to sell up to 20 percent of its AIG shares in the first quarter of 2011 as part of its unloading its stake in the insurance giant.
The stock offering is expected to raise at least $15 billion. The securities will be sold to private investors, similar to what the Treasury did with its Citigroup and General Motors holdings.
Since January, AIG shares gained 41 percent on the New York Stock Exchange to $42.22. If the Treasury sells its AIG stocks at $29 per share, finance experts said the Treasury will break even on its investment.
A Treasury official said the AIG action dovetails with Washington’s strategy to exit investments in private companies as soon as practical, while protecting taxpayers’ money.
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D.C., Washington, United States (AHN) – Over 21,000 transactions were made by the U.S. Federal Reserve when it stabilized the financial markets. Details of the transactions made in 2008 and 2009 were posted on the agency’s website upon order by Congress.
The details include names of companies that borrowed money and the amount.
Among the borrowers were:
The Fed also loaned to major American companies such as General Electric, AIG, Caterpillar, Verizon, Harley-Davidson and Toyota.
The loans also extended to subsidiaries of U.S. banks in East Asia, Europe and Canada and to large foreign banks such as Barclays, Royal Bank of Scotland, Deutsche Bank and UBS.
The bulk of the loans were made in the fall of 2008 when the Fed lowered lending benchmarks and extended help to different institutions that never sought assistance from the U.S. central bank before the crisis.
The Fed said most of the loans have been paid back, and none are overdue.
Last month the Fed announced the availability of $600 billion stimulus money. The announcement sparked complaints that the agency was stoking inflation and asset-price bubbles.
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The number of banks on the Federal Deposit Insurance Corp.’s “problem” list grew over the summer, even as the industry posted solid net income and fewer loans soured.
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Obama administration officials spent the weekend sharing different comments on airport security, the latest example of the president and Cabinet secretaries sending mixed messages on policy or politics to the American public.
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United States (AHN) – The Federal Communications Commission is investigating whether Google violated privacy laws with its Street View project.
FCC officials are concerned over the fact that Google’s Street View cars downloaded “payload data” from unencrypted Wi-Fi networks near its cars.
The Electronic Privacy Information Center (EPIC) filed a complaint in May asking the FCC to investigate whether Google violated federal laws against electronic snooping. Each violation carries a fine of $5,000.
Google has apologized for what it said was an unintentional harvesting of personal information from Internet networks, including passwords and emails. In addition, it has said it stopped the practice as soon as it realized what it was doing, notified the authorities and wants to delete the stored information as soon as possible.
Google said it only downloaded information from open Wi-Fi networks to better determine the locations its camera-equipped trucks were photographing.
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Gold hit another record around $1 394/oz before speculators cashed in, but an unpopular decision by the Federal Reserve could still spur buying.
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Washington, D.C., United States (AHN) – The decision by the United States Federal Reserve to pump $600 billion into the nation’s economy by buying U.S. Treasury Bonds has sparked international criticism led by Germany and China.
China and Germany represent the world’s second- and fourth-largest economies respectively. In addition, they were joined by Brazil and South Africa in criticizing the “quantitative easing.” Quantitative easing is the economic term for buying assets to attempt to boost the economy and lower unemployment.
However, Germany, China, Brazil and South Africa allege that the scheme will not help the U.S. economy and will instead create more problems in the rest of the world. Quantitative easing is expected to lower the value of the dollar, which will make U.S. exports cheaper in world markets.
That means that U.S. exports would be more competitive against German and Chinese exports.
Indeed, the dollar did plunge in value against several of the world’s currencies on Thursday.
Germany’s Finance Minister Wolfgang Schaeuble on Friday said the U.S. Federal Reserve’s move would undermine efforts to create a level playing field in the currency markets.
China Central Bank chief Zhou Xiaochuan said the U.S. should focus on reforming the international currency system. He argued that if the U.S. central banking policy is good for the U.S., but not good for the rest of the world that it might have a negative impact on the rest of the world.
The U.S. has criticized China for artificially keeping its currency devalued for many years to make its exports cheaper. But China made that move when its country had full employment and a budget surplus. The U.S. central bank is not buying U.S. Treasury bonds to deflate the value of the dollar abroad but rather to try to pour money into the American economy – which currently has a budget deficit – and to stimulate the weak economy to encourage American businesses to hire unemployed American workers at a time of continued high unemployment.
Germany also criticized the move because they said it would add to America’s deficit.
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