tag:blogger.com,1999:blog-13073631.post9044876522903436640..comments2024-01-04T07:21:18.243-05:00Comments on John In Carolina: SEC Probes Whether Duke BOT Chair Misled InvestorsUnknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-13073631.post-43608665844765659452009-01-24T12:56:00.000-05:002009-01-24T12:56:00.000-05:00If the goal is to redefine virtue then maybe we've...If the goal is to redefine virtue then maybe we've achieved that end.<BR/><BR/><A HREF="http://apnews.myway.com/article/20090116/D95OEC801.html" REL="nofollow">Stimulus Plan Repeals Big Tax Breaks for Banks</A><BR/><BR/>"...To address the financial industry meltdown, the Treasury Department last fall issued a new tax rule to make it more attractive for healthy banks to buy troubled ones hit hard by the mortgage crisis. It allowed healthy banks to avoid billions of dollars in taxes by offsetting their profits with the losses of the banks they acquire.<BR/><BR/>Before, the merged bank could write off only a limited amount of the losses. Removing much of the restrictions enabled the acquiring banks to make huge reductions in their tax liabilities.<BR/><BR/>In some cases, the tax breaks exceeded the cost of acquiring the troubled banks. Wells Fargo & Co. (WFC), for example, made a bid to acquire Wachovia Corp. (WB), just days after the change in tax rules was issued Sept. 30. Wells Fargo paid $14.8 billion in a stock deal to buy Wachovia, but stands to reap about $20 billion in additional tax savings from the transaction, according to analyses by private tax experts..."<BR/><BR/>There are several events that are disconcerting.<BR/><BR/>1. We know when Bob Steel was confirmed for his post within the Treasury Department, however we don't know the relationship between his consideration prior to the hearings and the lacrosse hoax actions on his part. Did his being considered for the Treasury post influence his action/inaction relative to the hoax?<BR/><BR/>2. We know Bob Steel, while at Treasury, was involved in the decision to open the discount window to non-bank institutions. That includes his former employer Goldman Sachs.<BR/><BR/>3. We know the Treasury created the tax deal mentioned in the article above. Did Mr. Steel have any authorship in that tax treatment ruling? It is important to understand that the tax rule was not Congressionally enabled.<BR/><BR/>4. We heard what Steel said about Wachovia on Mad Money with Jim Kramer.<BR/><BR/>5. We know that the toxic problems Wachovia acknowledged went up substantially within days of the airing of the Mad Money broadcast which is the basis for the SEC probe.<BR/><BR/>6. We know that Citi was dumped on by Wachovia and that Wachovia accepted a better deal from Wells Fargo. I seem to recollect that one basis for choosing Wells Fargo as a suitor was that WF did not require government support.<BR/><BR/>7. We know per the linked article above that the deal was wholly government supported based upon favorable tax treatment for Wells Fargo. WF received $20 billion in tax breaks to acquire Wachovia for $14.8 billion.<BR/><BR/>8. Ironically we know that Duke hired Jamie Gorelick to defend Duke. She of course, was an employee with Fannie Mae. While there Fannie Mae cooked their books and she received north of $25 million in bonus money. The fact that FNMA as a GSE strongly lobbied Congress NOT to institute reforms (multiple times) is appalling. The $1 trillion in FNMA sub-prime loans is the root cause of the failure of our system. Of course many of those toxic loans were originated by Wachovia (prior to Steel being named as CEO).Anonymousnoreply@blogger.com