Oct 14 U.S. Treasury to Inject $250 Billion into Banks By Admin, PBS News Hour In a new effort to shore up confidence in the economy and inject life into frozen credit markets, the U.S. Treasury will inject $250 billion into several large banks. Continue reading
Oct 09 If banks do not have money to lend, how can they buy up finance firms and other failing banks? Question/Comment: If banks do not have money to lend, how can Citicorp, Wells Fargo, etc. come up with billions to purchase failing banks and finance firms? Paul Solman: They aren’t forking over any cash. “Purchase” means subsume. Wachovia becomes part… Continue reading
Oct 06 Can you explain, simply, what a credit default swap is? Question/Comment: Can you explain, simply, what a credit default swap is? Paul Solman: I sure hope so. Basically, a credit default swap or “CDS” is an insurance contract to protect against bankruptcy. Say… Continue reading
Sep 17 Last year Lehman Brothers' CEO made $71 million. Now his company has collapsed. How much will he make this year? Question/Comment: Last year Lehman Brothers’ CEO Richard Fuld, Jr. made $71 million. Today his company collapsed. How much will he make this year? Paul Solman: I don’t know about this year. You’ve covered last. Continue reading
Sep 11 How will the taxpayers pay if Fannie and Freddie Mac fail? Question/Comment: Fannie Mae and Freddie Mac, we are told, are so big, we can’t allow them to fail. We taxpayers could end up footing the bill for as much as $200 billion. Where will that money come from? How will… Continue reading
Aug 15 How do speculators affect the price of crude oil? Question/Comment: I would like to understand how speculators affect the price of crude oil. I’d like to know who these people are (in general) and how they operate. Paul Solman: I’m on record on this page (and elsewhere)… Continue reading
Aug 01 How exactly did the banks lose money? Question/Comment: My question about the mortgage crisis is this: how exactly did the banks lose money? It seems that people who put deposits on the loans that were foreclosed upon lost their money, not the banks. The banks… Continue reading
Jul 02 Are the stimulus checks only a loan? Question/Comment: My accountant told me the government’s gift of money for taxpayers (to help stimulate the economy?) is actually a loan that most middle/upper income citizens will have to repay within a year. Paul Solman: America spends more than… Continue reading
May 29 How does the U.S. "export" its inflation to other countries? Question/Comment: How does the U.S. “export” its inflation to other countries? And a second question: Frequently pundits say the U.S. can and does print money to achieve some economic or financial goal. However, my economics professor says the government does… Continue reading
Apr 25 Doesn't Bear Sterns hiding of their problems while continuing to sell mortgage-backed securities as if all was well constitute fraud? Question/Comment: Bear Sterns did not go under overnight. Unless they are incompetent, the executives must have known what was happening for at least a year, maybe longer. So how come they took hundreds of millions in salary and bonuses (maybe… Continue reading