“Financial Crisis Inquiry Commission” on The Daily Caller

Let them know how you really feel, Dylan. (more)

1.) FCIC dissenters defend bailing out Wall Street — Two reports will come out of the Financial Crisis Inquiry Commission today. The one written by the panel’s liberal majority will blame lax regulation and the banking industry for the collapse of the housing industry. The other, written by commissioners Bill Thomas, a former Republican congressman from California, Keith Hennessey, former chairman of the White House National Economic Council under President George W. Bush, and Douglas Holtz-Eakin, a former director of the Congressional Budget Office, spreads the blame more broadly among “investors, creditors, regulators, homebuyers, and politicians,” all of whom must take “personal responsibility.” The dissenters also defended bailing out Wall Street: “For a policymaker, the calculus is simple: if you bail out AIG and you’re wrong, you will have wasted taxpayer money and provoked public outrage,” the paper reads. “If you don’t bail out AIG and you’re wrong, the global financial system collapses. It should be easy to see why policymakers favored action–there was a chance of being wrong either way, and the costs of being wrong without action were far greater than the costs of being wrong with action.” Thank goodness we didn’t destabilize the global financial system, which might have led to really scary stuff, like high unemployment. (more)

A group of three conservatives on President Obama’s financial crisis inquiry commission called the final report of the panel “unbalanced” and “incorrect,” in a 27-page dissent from the more than 500-page document endorsed by a majority of members. (more)

1.) Everybody wants something from Obama’s SOTU — For two weeks now, yammer-faces and pols have rattled off what they’d like from tonight’s State of the Union address. The only thing they haven’t asked for is the moon. In an interview with The Daily Caller, Democratic Sen. Mark Warner added his own demands to the growing list of things Obama must pay lip service to during his address. “What I hope he says – and I think this will make some folks on my side upset – even if he has an innovation and growth agenda … just growth alone isn’t going to get us out of this problem,” Warner said. “We’re going to have to take on the size and role of government” and “the stuff that’s popular” like entitlement and defense spending. “You’ve got to earn good faith by showing willingness to do spending cuts,” Warner said. “There is some value in short term cuts that will at least show that we’re serious about doing something.” Obama’s more likely to promise the moon. (more)

Tasked with examining the “cause, domestic and global, of the current financial and economic crisis in the United States,” the Financial Crisis Inquiry Commission (FCIC), it seems, is now embroiled in a public dispute, perpetrated by the commission’s partisan divide. (more)

A Democratic congressman who backed Speaker Nancy Pelosi for minority leader said Monday it is “quite possible” he might vote for Republican John Boehner for Speaker in the next Congress. (more)

WASHINGTON—Goldman Sachs Group Inc. executives defended valuations for credit-default swaps that were presented to American International Group Inc. during the financial crisis, saying they reflected actual market prices. (more)

A blue-ribbon panel investigating the financial crisis will put Goldman Sachs executives on the hot seat next week, along with officials from American International Group Inc., the big insurance conglomerate. (more)

Financial Reform Bill - House and Senate conferees will formally meet on Thursday to work on the compromise language between the financial reform bill passed by each.  But POLITICO reports that work on final language is already well under way, with ferocious lobbying and electoral politics both playing a role in the process.  They report that players on all sides of the contentious debate over the biggest piece of financial regulatory reform since the Great Depression are fully engaged in a fierce final round of lobbying and negotiation before a final bill is sent to President Obama, which is expected by the end of the month.  Republican conferees are scheduled to meet on Tuesday to coordinate their plans to revise the bills. One senior Democratic conferee has other problems to consider as, Sen. Lincoln (D-Ark) enlists the support of former president Clinton to help in her tight battle in a primary run-off.  Senator Lincoln is the author of controversial language that could force Wall Street banks to spin off lucrative derivatives trading operations, and the prospects of that provision remaining will demand on Tuesdays run-off. (more)

Will AIG pay back its bailout? It depends on whom you listen to. During Wednesday’s hearing at the Congressional Oversight Panel for the Troubled Asset Relief Program, the government folks and AIG’s chief executive spent most of their time discussing why the AIG bailout was warranted and how things are getting better. They suggested that AIG may be able to pay off some debts, thanks to the sale of two foreign life insurance subsidiaries, by the end of the year. The managing director of insurance ratings at Standard & Poor’s suggested that the agency may lower the already-low rating of AIG if its operating performance does not improve. The managing director of property and casualty insurance research at Keefe, Bruyette & Woods noted that the company recently downgraded common shares of AIG to underperform and established a price target of $6 — despite yesterday’s closing market price of $34 for AIG. If that weren’t bad enough, 20 percent of Prudential UK shareholders announced that they plan to vote against the $35.5 billion takeover of AIG’s life insurance subsidiary. (more)

Sen. Richard Shelby, Alabama Republican and the ranking Republican member of the Senate Banking Committee, gave a final speech on the Senate floor Thursday in advance of the final vote to pass a financial regulation bill, which passed later in the evening. (more)

Financial markets clobbered early, but end Thursday down 3 percent: The Dow Jones Industrial Average lost almost 1,000 points and then recovered enough to close the day down a significant, but not devastating, 348 points. The S&P 500 lost 38 points and the Nasdaq dropped 83 points. Each of the markets lost a little more than 3 percent. The biggest one-day loss in the Dow’s history was 777 points, or 7 percent. Crude oil prices on Thursday dropped to levels not seen since February. The euro dropped 1.5 percent from Wednesday and briefly traded at its lowest level since March 2009. At the same time, the price of gold rose 3 percent to a five-month high of $1,200 an ounce, nearing an all-time record in after-hours, electronic trading on Thursday. (more)

A tax even a Republican can like: A hot topic in certain circles is the possibility of the federal government enacting a “value-added tax,” or VAT, as one solution to America’s fiscal mess. Basically, a VAT is a more easily enforced (and collected) retail sales tax. Democrats tend to love it and Republicans tend to hate it, because it adds revenue to fund more federal programs. Paul Volcker, head of President Obama’s economic advisory board, said a VAT was “not as toxic an idea” as it used to be. In April, Sen. John McCain, Arizona Republican, offered a “sense of the Senate” resolution expressing opposition to a VAT, which passed in the Senate by an 85 to 13 vote. So it interesting that five Republican House members are co-sponsoring a bill by Rep. Pascrell, New Jersey Democrat, that would impose a VAT on imports from countries that use the tax. In the Senate, Republican Senator Voinovich, Ohio Republican — who was the sole Republican vote in opposition to that sense of the Senate resolution — now has suggested that replacing income taxes with a VAT could be one way to streamline the tax code. (more)

With the announcement of six Republicans (Reps. Paul Ryan, Dave Camp, and Jeb Hensarling and Sens. Judd Gregg, Tom Coburn, and Mike Crapo), the lineup for President Obama’s National Commission on Fiscal Responsibility and Reform is set. While the commission will more likely feature show over substance, it also might be an opportunity to move forward on much-needed tax reform. (more)

While the Senate Banking Committee may be close to proposing a financial regulatory reform bill, elsewhere in Washington the investigation continues into what caused the meltdown in the first place. (more)

It should be clear by now that everyone agrees that jobs are the No. 1 one issue facing America. Over 7 million have disappeared from the economic landscape since the beginning of the recession. The official unemployment rate is 10 percent, while a broader measure that also includes discouraged and part-time workers stands at 17.3 percent. The private sector firm ADP estimates that another 22,000 job disappeared in January. A weary populace awaits the latest official round of bad news out of the Labor Department on Friday. (more)

The Financial Crisis Inquiry Commission (FCIC) garnered attention last month when it hauled the heads of four of Wall Street’s largest banks to Capitol Hill to answer questions about their roles in the taxpayer-funded bailouts of their companies. And since that first round of public hearings, the 10-member commission and its staff of 35 has worked quietly from offices on Pennsylvania Avenue, questioning key players behind closed doors as part of their ongoing investigation into the causes of the financial meltdown. (more)