Category: Currency

Economics Update

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It appears that credit is still easing, with the 3 month LIBOR (London interbank offered rates) falling.

The spread between LIBOR and Treasuries is still awful, but it’s a bit better, largely because the Treasuries are effectively 0% right now.

On the other hand, the Chicago Federal Reserve Bank’s Midwest factory index dropped to the lowest level in 12 years.

I’m a mechanical engineer, so I believe that manufacturing and services, and not banking, are the core activities of the economy, so I tend to believe the factory index more than LIBOR spreads.

In international currencies, Pound hit an all time low vs the Euro £0.9798:€1.000, nearly parity.

The experts are saying that they believe that the Pound will gain vs the Euro in the coming because the Bank of England won’t be lowering rates much more.

This makes sense. The BOE is already bumping up against zero interest rates.

The US dollar is down too, largely on concerns that the Gaza conflict will drive up oil prices and because the Fed’s zero target lending rate makes it a less attractive currency.

The conflict in Gaza has also driven oil up, though retail gasoline is near a 5-year low at $1.619/gal.

Yowza, I gots to buy me a Hummer!

Economics Update

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Ouch. Initial jobless claims for last week hit 586,000, the highest number since Nov. 27, 1982. The 4 week rolling average, which is a better metric, rose as well, to 558,000, though continuing claims declined to 4.370 million.

Even if you do have a job, it’s likely that you are seeing wages and or hour cut….And that 401(k) match, fuggedaboudit.

It’s no wonder that consumer spending fell in November, though it was less than expected, and when adjusted for inflation….OK, adjusted for deflation….It was actually up.

As Calculated Risk notes even as record low mortgage rates are boosting demand, a lot of that ReFi, the spread between “conforming” and “jumbo” 30 year fixed mortgages remain at an all time high of about 2%, which means that in expensive areas, the cheap mortgages are simply not available.

CRE is tumbling too, as we can see from the fact that Manhattan office vacancies hit a two-year high.

In currency, the dollar was down again today, and the Russian central bank devalued the Ruble…again.

I still think that a run on the dollar is a possibility when traders start to realize that the Treasury and Fed are printing money and dropping it from the proverbial helicopter.

In energy, increases in inventory, drove oil to $35.35/bbl.

Economics Update

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Well, most of the credit crunch indicators seem to be better today, or at least not as bad as expected.

First, we have the TED spread, the difference between the rates on interbank overnight loans and short term T-bills falling below 150 basis points (1½%) to 148 basis points, for the first time since Lehman collapsed.

Of course historically, the TED spread has been about 38 basis points.

Additionally, U.S. 2-Year T-Notes were auctioned off at a higher interest rate than predicted, 0.922%, which was better than the predictions of 0.912%, though the former is still near a record low, and still reflects a flight to safety at the expense of anything resembling returns.

You get the same picture from Calculated Risk’s Credit Crisis Indicators where things appear to be really bad, but better than they have been.

In terms of the real economy, things are still tough though with temp agency Manpower, Inc. withdrawing its forecast on weak demand, and temp employment is a bellwether, and we also are seeing the first decline in online holiday sales ever, according to a report from ComScore.

Considering the fact that online sales are still growing as a proportion of overall sales, the rest of retail is doing worse.

In energy, oil is down again, largely on reports of diminished Chinese demands.

In currency, the Dollar is up on the expectation that central banks will act to support it.

Economics Update

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The big news, the bail out, I’ve already discussed, though the fact that S&P has cut the ratings on 12 banks, Bank of America, Barclays Bank, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, Royal Bank of Scotland, UBS, and Wells Fargo, is not what I would call small news.

In any case, it appears that oil is down to $33.87/bbl, and the dollar is up.

I think that the announcement of the auto bailout strengthened the dollar, and as to oil, the world economy is still seizing up.

Retail gas was up above$1.67/gal today, so I think that we have hit bottom there.

Economics Update

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The big news, the Fed basically giving up and lowering its rates to what is effectively zero, I just posted, but that’s not the only central bank news today.

The European Central Bank is considering cutting its overnight deposit rate, and the Bank of Japan is looking at ‘quantitative’ monetary easing, things like buying commercial paper outright.

I think that we may see the printing presses cranking up fairly soon, and as I’ve said before, this might not be a bad thing: inflating our way out of the housing crunch as a way to staunch the bleeding in the credit bubble. (I think I just violated some regulations on mixing metaphors, and the English Instructor Swat Team will come after me, red pencils blazing)

In any case, the Federal reserve cutting rates by ¾% has pushed the dollar down today and pushed treasury yields down to new lows.

That second one is part of the goal, the idea that lower yields will move people to more risky investments, but since people have already accepted negative yields, I’m not sure that it will make a difference.

In the mean time, those who worry about a deflationary spiral, are not relaxed folks today, with the CPI in the United States dropping by 1.9% (non-seasonably adjusted) and 1.7% (seasonably adjusted), the biggest drops since 1932 and 1947 respectively.

Anytime you hear an economic statistic, followed by, “since 1932,” it is not a good thing….I’m just saying…

Needless to say, this is hitting with real estate too, with housing construction starts falling 18.9% in November, to 625K, the lowest number since records started being kept on this in 1959.

Anytime you hear an economic statistic, followed by, “since 195,” or, “since records started being kept,” it is not a good thing either….I’m just saying…

In Southern California, one of the areas hardest hit by the housing bubble, prices are down 5% for October-November, and 35% from November last year.

I’ve seen a few stories about how selling is picking up in California, but this really is people scavenging foreclosures and oft-mentioned the dead cat bounce.

In energy, OPEC meeting opened with calls to cut production by 2 million bbl/day, which, along with the falling dollar and Fed rate cut, pushed oil up, but only by a bit less than a dollar.

Retail gasoline was up again today, but still has not moved more than a penny above its recent low.

Weekend Economics Update

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Just because it’s the end of a very long streak, I have to note that retail gasoline prices rose Sunday from $1.66/gal to $1.663/gal following 86 straight days of declines.

In currency, the dollar dropped, largely on the entire auto industry bailout clusterf%$# that the Republicans made, and the Pound fell below the Euro for the first time ever.

I think that the Pound breaking 1€ is actually the most significant thing here.

While “The Street” in London is smaller than Wall Street in New York, it is a much larger portion of the UK economy, and so the damage is relatively larger.

People no longer have faith in the international institutions that are the exemplars of what is called “Anglo-Saxon Capitalism”, nor the governments that are shoveling increasingly large amounts of (soon to be debased?) currency in their direction.

Economics Update

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Well, retail sales numbers for November are grim, down 7.4% from November 2007, and that’s with an adjustment for a late Thanksgiving that is probably excessive, so it is likely worse.

Consumer sentiment rose, but is still at a pretty awful number.

We also saw wholesale prices fall, which can be either good news, moderating inflation, or bad news, deflation.

Overseas, we have the EU found agreement on an economic stimulus pack, with even Angela Merkel backing off Hoovernomics by a half step.

In Japan, a new economic stimulus package has been announced.

Russia, however, is being hammered by low oil prices, and senior officials are now saying that the nation is in recession.

As to currencies, the dollar was mixed, up versus the Pound, down a smidge versus the Euro, and at a 13 year low versus the Yen.

I’m not sure how much of this is all just a reaction to the Senate auto bailout follies, and the the same goes for the price of oil, which was down, but was likely driven by yesterday’s filibuster.

Additionally, retail gasoline is now below $2 a gallon in the lower 48, with New York State crossing that line today.

Economics Update

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First, we have some developments on the other side of the pond, with the Australian Central Bank lowering its rates by 100 basis points (1%), the most since 1991, and a major Russian investment bank is calling for a 20% depreciation of the Ruble, to boost exports.

It might be a good idea, depending on how export dependent the Russian economy is. It would boost local and export oriented industries.

On more general metrics of the credit crunch, Calculated Risk’s credit crisis indicators show little progress, and the fact that the rates on Treasuries have fallen off a cliff, with people getting virtually nothing (0.05%) for 3 months T-Bills, 2.68% on 10 year notes (a near record), and 3.17% for a 30 year note (a record).

Basically, this means that investors are paying the government to hold their money safe for them.

For what it’s worth, people are not trusting anything, including much in the way of US and European sovereign debt, with the cost of swaps to insure that debt skyrocketing.

In energy, we have OPEC deferring a production cut, and so oil is now firmly below $50/bbl, and retail gasoline falling to $1.812/gal, a price I never thought that I would see again, and the 76th straight daily drop.

Meanwhile, the the dollar has weakened though there is downward pressure on the Yuan from rumors that the Chinese will actively move to push the value down to boost their economy.

Economics Update

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Gee, the updated numbers for US GDP are in, and they have gotten worse, going from an annual rate of contraction of -0.3% to -0.5%.

In an effort to staunch the bleeding, the Federal Reserve has announced a new sh#@pile buy:

The Federal Reserve announced on Tuesday that it will initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises (GSEs)–Fannie Mae, Freddie Mac, and the Federal Home Loan Banks–and mortgage-backed securities (MBS) backed by Fannie Mae, Freddie Mac, and Ginnie Mae. Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late. This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally.

They are also opening up a facility for
consumer and small business loans.

This took down 30 year mortgage rates to a record low, down 1-1/8 percentage point to 4-7/8.

Of course, right now, the banks are so skittish that they are unlikely to do a mortgage unless the property is sold at a seriously depressed price anyway.

This is actually good sense, as the Case-Schiller home price index fell 17.4% year over year.

That’s probably why the Libor is trending up again. Too much uncertainty, so banks want more for their overnight loans.

Then again with the number of banks characterized as “troubled” by the FDIC jumped from 117 in the 2nd quarter to 171 in the 3rd quarter, the highest number in 13 years.

It’s no wonder that some of the technical wonks who watch the stock market are noting that this is the most volatile market ever, with average daily swings over the last 50 trading days of 3.82%.

By way of comparison, this number was 0.33% in February.

Oil fell a bit to day, to $50.77/bbl, and I think that the markets are starting to wonder about just how much money that the Federal Reserve will print, so the dollar fell on the news of the new Fed lending facilities.

Economics Update

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I think that we have to start with the fact that U.S. Treasury Credit Default Swaps risk premiums just hit record levels.

If that sounds arcane and obscure, that’s because it is, because the brokers like it that way, but here is a slightly clearer statement, returns on insurance against a defaults on US Treasuries hit a new high….Meaning that investors are pricing in the possibility of a US government default.

This means that a Lot of people are betting that the full faith and credit of the United States of America means nothing.

The US defaulting is the Stay-Puft Marshmallow man moment of US society, and an increasingly large segment of the investing world is betting on it.

At its core, the problem is that this bubble is something that people cannot walk away from, housing and shelter, and the realtor-pimps are now saying that existing home sales are softening, though the staid New York Times is saying that home prices are plunging.

Existing home sales down over 3.1%, and prices down 11.3% year over year.

In the mean time, the Citi bailout is pushing on both currency and energy, with
the dollar falling, because people realize that the printing presses are running non-stop.

That being said, the falling dollar is not helping the ruble, where the Russian central bank has reduced support for the currency for the 2nd time in as many weeks.

It also drove oil up about a fin spot, though retail gasoline prices fell for 68th straight day.

It’s not going to get better any time soon, because MasterCard is reporting falling retail sales.

Meanwhile, Calculated Risk’s Credit Crisis Indicators are slightly worse today.

Economics Update

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Well, the obvious lede is the unemployment numbers, with the weekly new unemployment claims, which are a very noisy metric, and continuing claims, which are not, beinb positively ghastly.

Weekly numbers rose to 542,000, whichn is the highest since mid 1992, and well above the estimate of 502,000 and continuing unemployment claims hit 4,012,000, up 109,000, the highest level since 1982.

Therefore, it is no surprise that the index of leading economic indicators fell in October, as die the Philadelphia Federal Reserve’s business activity index, to an 18 year low, and the Architecture Billings Index, an indicator of future construction activity, fell to an all time low.

Meanwhile in the bond market, so many people are fleeing to US treasuries that rates have been driven to historic, and near historic lows, while the costs of insuring private bonds has returned to the stratosphere.

For what it’s worth, we have some good news for a bond insurer, specifically Ambac, which has managed to negotiate a cancellation of $3.5 billion in insurance contracts, which is obviously a serious reduction in liabilities.

In energy, oil briefly fell under $50/bbl, and retail gasoline prices seem to be heading below $2/gallon.

In currency, the dollar is mixed.

Economics Update

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Well, I’ll be referencing some mora alarming economic data in another post, but let’s have at the routine stuff, shall we?

First, the U.S. Producer Prices Index fell by 2.8%, the most on record. Note: this is not a, “low inflation, hurray,” thing. This is a, “prices are falling off a cliff like they were in 1932,” thing.

Part of this, of course is falling oil prices, so it’s no surprise that oil hit 21-month low today.

Not unsurprisingly, we also see the home builders’ sentiment index falling to a 9 month low.

Honestly, if I were surveying home builder sentiment, my worry would be them tossing themselves out of windows.

Out of force of habit, because the fundamentals of the U.S. economy do not merit it any more, people continue to flee to the dollar in times of uncertainty, so the dollar strengthened today.

Oh, and if you follow stock prices, Fannie Mae is facing delisting from the New York Stock Exchange.

Economics Update

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Well, in a case of stating the blatantly obvious, the Philadelphia Fed;s Survey of Professional Forecasters says that we are in a recession, and have been since Spring, though the Conference Board has not yet chimed in on this, so it’s not yet “official”.

In any case, Japan is officially in recession. I guess that they have better record keeping than we do.

In the mean time Calculated Risk’s Credit Crisis Indicator interest rate metrics are basically unchanged.

We also have some mixed numbers in industry, with post hurricane industrial production, but the New York Fed’s Empire State index of hitting its lowest level ever.

In the UK, they are seeing an explosion in jingle mail, where mortgage holders mail their keys back to the bank, either figuratively or literally.

In the US, pending sales are down from September to October, but up against last October, which Barry Ritholtz catches, it’s really a net up, who wants to buy a house in October, but the National Association of Realtors does not get.

In currency, then dollar is down on recession worries, though my guess is also that the G20 meeting being hosted by a drooling idiot did not help.

In energy, oil is at a 21-month low, and retail gasoline prices fell for 61st straight day, which does not surprise me, as I filled up for $1.979/gallon yesterday.

Economics Update

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Retail sales are imploding Down 2.8% from September, and down 4.1% year over year,

Here is a historical data, courtesy of Calculated Risk, just so you know how bad these numbers look.

Of course, the financial press always has to find a silver lining, so they make note of the fact that consumer confidence rose from to 57.9 from 57.6, the article attributes this to falling gas prices, but I ascribe it to three words, “Buh Bye Bush.” With the election, they realize that Bush will soon be gone, and so the number goes, though the number still reflects major suckage.

In the overseas economy, yesterday, it was Germany, well today, it’s been confirmed that it’s actually the whole Euro Zone that is in recession.

Also, we have automotive news from that side of the pond, with the three major credit insurers in Europe pulling insurance coverage to suppliers of Ford and GM. Basically this means that if either of the auto makers default, the suppliers are on their own.

They have basically decided that the risk of a default is too much for them to cover.

And in domestic bad news cast as good news, we make note of the fact that banks and bank like institutions borrowed less from the Fed this week. Only an average daily borrowing rate of 95.4 billion, down from $110 billion.

Down to an average of 95.4 average daily borrowing list week. Let’s run the numbers 95.4 billion/business days * 250 days a year = 28.85 trillion…$23,850,000,000,000.00…By comparison, the US GDP in 2006 was 13.6 trillion.

We also have Freddie Mac tapping a $100 billion bailout fund that was not counted in the above.

As Calculated Risk notes, “Remember Fannie and Freddie have much lower default rates than the loans packaged by Wall Street. If conditions worsened dramatically for Freddie and Fannie, imagine how bad it is for Wall Street MBS and loans held by lenders like Wachovia (Wells Fargo) and WaMu (JPMorgan Chase).”

As to energy, oil is down on demand concerns, and and retail gasoline is down almost $2/gallon from peak.

There is a part of me that wonders if the swing in oil/gas was some sort of electioneering, but it clearly did not work.
In currency, the dollar rose, because when people are frightened, they still flee to the dollar for safety…for a while at least.

Economics Update

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Well, Calculated Risk has your daily inventory of interest ratescredit crisis indicators, and today, they are pretty neutral.

In Hank Paulson and His Evil Minions™ news, he has finally publicly eschewed the idea of buying distressed assets.

I think that the reason for this is that the sales price would either be so low that all of his Wall Street friends would be technically insolvent, or so high as to land his corrupt ass in jail, because the big sh$#pile is near worthless. That’s why there is no market. Wall street cannot handle the truth.

It also looks like he will start requiring some level of private capital to match any bailout money. My translation is that now that he’s bailed out his Wall Street friends, anyone else who wants money needs to work for it.

Of course none of this will do much for the economy, with estimates that holiday sales will drop 1%, the first decrease since 1985, and home values falling for the 7th straight quarter.

What we should be thinking about is not how to rescue Wall Street, but rather how to amputate it from out economy, because these parasites are on a path to destroy more than 10% of US GDP.

Speaking of parasites, it looks like GE capital just got the FDIC to insure $139 billion of their debt. It appears that, “GE’s finance businesses are able to seek FDIC debt coverage because its GE Capital subsidiary also owns a federal savings bank and an industrial loan company, both of which already qualify.”

Like I said, parasites.

In the mean time, recession worries drove oil down again today, to a 21 month low, and it appears that the world thinks that the UK is in worse shape than the US, because not only was the dollar up today, it hit a 6-year high vs. the pound.

If you are worried about a resurgent Russia though, you have less to worry about, with Russia easing up support on the Ruble, which promptly fell.

Economics Update

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Let’s start with retail, where the inestimable Barry Ritholtz points us to a pretty picture on the retail collapse from the NY Times (click on image for the NY times article):

I would note that the 4 weeks before November 1 are now firmly part of the Christmas season, and the Christmas season is typically 40% of revenue, and 80% of profits.

In related news Circuit City files chapter 11, this should come as no surprise for the people who have followed this sad tale, as was predicted when they laid off senior sales staff and replaced them with clueless low wage drones while issuing large executive bonuses: (Story dated December 22, 2007)

Circuit City laid off 3,400 workers in March to replace them with lower-paid new hires. This week, it announced the approval of millions of dollars in cash incentives to retain its top talent after the departure of several key executives over the past year. Executive vice presidents could claim retention awards of $1 million each, and senior vice presidents could get $600,000, provided they stay with the company until 2011, according to a filing with the Securities and Exchange Commission.

If you don’t have competent sales staff, then why won’t your customers go to the Amazon and Walmart?

Karma, Neh?

In the world of mortgages, we have Fannie Mae Posting a ecord $29 billion loss for the quarter, which is actually worse than it seems, since the last quarter’s profits were largely from banking losses as tax breaks.

It will likely never see those tax breaks, because a profitable year is so far off.

Yesterday, it was monoliner Ambac, today, Moody’s cuts MBIA. No surprise….dead insurers walking.

Meanwhile, in energy, it appears that the House of Saud is actually adhering to the OPEC oil production cuts, which along with China’s announcement of a $586 billion stimulus package should drive commodities up.

The Russians are hoping that it will work, as falling oil prices seems to indicate a devaluation in the Ruble.

So far, it appears to be working, oil finished the day up $4.52/bbl….Good for them, bad for us.

In any case the Chinese stimulus package has had the effect of driving the dollar down, though I’m not sure why…I just don’t know the underlying theory.

Carnegie Taken Over by Swedish Government, to Be Sold

Finally, we have a report from Calculated Risk on credit crisis indicators:

  • Libor down (good)
  • 3 month treasury yields down (bad)
  • TED spread up a smidgen (a smidgen bad)

They also have a nice scare picture of the Federal reserve balance sheet here:

Basically, it’s how much of the sh%$pile that the Fed owns, and this is fracking terrifying.

Economics Update

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Jeebus! The Bank of England cut it’s benchmark interest rate 150 basis points (1.5%)…To 3%.

That’s not strong action, that is TEOTWAWKI panic.

The ECB and the Swiss central bank also cut rates, by 50 basis points…The central banks think that we are in end of the world territory.

As further evidence, we have the ECB’s president saying that there may be more rate cuts.

This from an institution that’s only charter is to fight inflation.

Not surprisingly, all these rate cuts had the effect of sending the Dollar and Yen skyrocketing.

Meanwhile, jobless claims dropped a bit, but only through “Jedi Mind Trick” statistics:

The number of U.S. workers filing new claims for jobless benefits fell by 4,000 last week to 481,000, ….

The department revised up its estimate for jobless claims in the prior week to 485,000 from a previously reported 479,000.

So comparing initial estimates, it went up by 2,000, but after the “correction”, it was down by 4000.

In any case, the number sucks, and continuing unemployment claims are the highest that they have been since 1983, when unemployment topped 10%.

It won’t help that retail sales fell to their lowest levels in at least 39 years…..It may be longer, but they only started collecting the statistics in 1969!

Interest rates on interbank lending trending down, but considering all the interest rate cuts, that is pretty unavoidable.

I think that it is more significant that credit card companies were unable to sell bonds at all for the first time since 1993, and when you consider that they charge something north of 20% on carried balances, that is ugly.

BTW, y friends the monoliner bond insurers are back again, with Moody’s cutting Ambac to ‘Baa1’.

It should surprise no one that with massive indications of a deep recession, and the dollar up, oil fell again to $60.77/bbl.

Economics Update

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First news is a question, can we please admit that we are in a recession? Please?

The economy contracted at an 0.3% annual rate last quarter, with a a 6.4% rate decline on purchases of non-durable goods, and a 3.1% rate decline on consumer spending.

This is not just a “recession”. This is a big MoFo.

There are predictions of a rate approaching 5% in the 4th quarter.

In any case, credit remains tight, though there appears to be some loosening, see here and here.

We are also seeing the first growth in commercial paper since the collapse of Lehman.

However, we also just saw 30 year mortgage rates spiked by 40 basis points, even though the Fed cut rates.

This ain’t over, and the Japanese have released details on a ¥ 5 trillion stimulus package, and the Germans have done so with a €30 billion stimulus package.

Still, the sounds of an oncoming train continue to drive oil prices down.

The dollar and Yen are both lower too.

Economics Update

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Well, the Federal Reserve cut the federal funds rate by 50 basis points (½%) as expected.

the Bank of China cut its rates too, for the 34d time in 6 weeks.

In response, the dollar dropped the most since 1998, (this article says since 1985) which is what is supposed to happen when you cut rates, people go elsewhere looking for higher rates of return.

Unfortunately, driving down the dollar is probably all it did. Below a certain level, the difference between the rate set and 0% (giving money away) becomes pretty immaterial, and I think that we are pretty close on this. That’s what my oft repeated phrase, “pushing on a string” means.

I would also note that the falling dollar pushed oil prices higher, which I’ll qualify, so as not to invoke the wrath of Dean Baker, since oil is dollar denominated, a falling dollar does not do anything directly, but it does effect the positions taken by traders in the oil futures market.

In any case, the monoliner insurers are back in the news, with Ambac wanting a capital infusion from the government, but MBIA saying that the money should instead go to assets that they insure. New York State Insurance Commissioner Eric Dinallo agrees with Ambac.

I think that MBIA’s proposal is a bigger bailout, since it means that they have less to pay on the sh^%pile without giving an ownership stake to the feds.

In any case, it looks like the Treasury and the FDIC are working to do MBIA’s bidding, with more signs of plans to buy bad mortgages.

BTW, here is a story to follow, the SEC is looking at tightening rules on credit rating agencies. The story I linked to has 2 ‘graphs, but when the details start coming out, this will be important.

The systemic failure of the ratings agencies is at the core of much of this problem.

Speaking of failures, the Treasury just bought $125 billion in stock in the big boys:

The report showed that the payments included $25 billion each to Citigroup Inc. (C, Fortune 500), JPMorgan Chase & Co. (JPM, Fortune 500) and Wells Fargo & Co. (WFC, Fortune 500) Bank of America Corp. (BAC, Fortune 500) received $15 billion andMerrill Lynch & Co. (MER, Fortune 500), which is being acquired by Bank of America, got $10 billion. Bank of New York Mellon (BK, Fortune 500) received $3 billion and State Street Corp. (STT, Fortune 500) of Boston got $2 billion.

Really about the only good news that I’ve heard today is New York GA Andrew Cuomo getting medieval on senior bank management:

NEW YORK (Reuters) – New York Attorney General Andrew Cuomo, who negotiated executive payment clawbacks by American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) as it received a taxpayer bailout, warned nine banks receiving government money on Wednesday that using the funds for bonus payments may be illegal under state law.

….

“Specifically, corporate expenditures and payments, made in the absence of fair consideration of undercapitalized firms, may well violate NY Debtor and Creditor Law 274, which deems such payments illegal fraudulent conveyances,” Cuomo’s letter said.

Obama really needs to give this guy a senior post if he’ll take it.