Neil M. Barofsky, the special inspector general appointed by President Bush in November to oversee the government’s Troubled Asset Relief Program, issued a scathing 250-page report today that ripped the Treasury Department’s plans to bail out the nation’s banks. Barofsky told Congress that what began as a $700-billion bailout last fall has evolved into a $3-trillion bonanza that is being administered with little oversight and almost no information about what the banks are doing with the taxpayer funds they are receiving. Barofsky also warned that Treasury Secretary Tim Geithner’s plan to have the government fund $1-trillion in ”partnerships” with private investors to take a mountain of toxic assets off the books of major banks is ”inherently vulnerable to fraud and should not be started without stronger safeguards.” According to a report in today’s New York Times, Barofsky was particularly critical of the Treasury Department’s refusal to demand detailed information from banks and other financial institutions about what they are doing with the money they receive from the government. ”The American people have a right to know how their tax dollars are being used,” the federal watchdog stated in his report, the second he has issued since his appointment to the post. Barofsky added that Treasury officials are ”jeopardizing the credibility of their efforts” by not requiring more transparency from the banking industry regarding its use of government bailout bucks. The inspector general raised several red flags concerning Geithner’s scheme—known as TALF (Term Asset-Backed Securities Loan Facility)—to jump-start an auction of toxic mortgage-backed securities with a $100-billion down-payment from Treasury, to be followed with up to $1-trillion in low-interest ”loans” to private investors from the Federal Reserve. The Fed recently increased the money supply by $1 trillion to prepare for this program. Barofsky said Geithner’s plan poses ”significant fraud risks” because rather than buy up the toxic assets directly, the government intends to loan money to investors without examining the poorly documented mortgage-backed securities, relying instead on the evaluation of the major credit rating agencies who not only failed to warn against the dangers of sub-prime mortgages, but actually awarded toxic assets their prized triple-A ratings. ”Credit ratings, cited as one of the primary credit protections in TALF as currently configured, have been proven to be of questionable value,” Barofsky’s report stated. ”The wholesale failure of the credit rating agencies to rate adequately such securities is at the heart of the securitization market collapse, if not the primary cause of the credit crisis.” Barofsky noted that, under Geithner’s plan, private investors […]
The Empire State Building soon will stand as a model for retrofitting existing structures for environmental sustainability. Five leading consulting, design, non-profit and construction partners—including the Clinton Climate Initiative, Rocky Mountain Institute, Johnson Controls Inc., and Jones Lang LaSalle—are undertaking a $20 million project that aims to reduce energy use by 38 percent and energy costs by $4.4 million annually at New York’s tallest building. The ”green” upgrade, part of a $500-million overhaul of the landmark skyscraper in midtown Manhattan, also will reduce carbon dioxide emissions from the building by an estimated 105,000 metric tons during the next 15 years, with much of the project funded through energy and operational savings. Energy-efficiency improvements will include: — Refurbish all 6,500 thermopane glass windows in the 102-story structure. Existing glass and sashes will be incorporated to create triple-glazed insulated panels. — Apply insulation behind radiators. This will reduce heat loss and heat the building perimeter more efficiently. — Update lighting designs and add controls that mix lighting with available natural light. — Install power-saving plug load occupancy sensors. — Retrofit chillers and ventilation controls to improve efficiency, air quality and comfort. — Give each tenant individualized, Web-based power usage systems. Work already has commenced on the environmental sustainability project at the world’s most famous office building, and building systems work is slated to be completed by year-end 2010. The balance of the work in tenant spaces should be concluded by end of 2013. Work that is scheduled to be completed within 18 months will result in more than 50 percent of the projected energy savings. The project aims to prove the viability for energy efficiency retrofit projects to dramatically increase a large building’s energy efficiency and reduce its overall carbon output with sensible payback periods and enhanced profitability. At the end of the project definition process, the project team analyzed steps to be taken towards sustainability within the framework of the existing USGBC LEED rating system. Internal calculations show that the Empire State Building will be able to qualify for GOLD certification for Leadership in Energy and Environmental Design (LEED) for Existing Buildings, and ownership intends to pursue such certification. The Clinton Climate Initiative, created by the non-profit foundation headed by former President Bill Clinton, brought the project coalition together. During an eight-month design phase, the team considered more than 60 ideas geared toward providing the optimal balance of financial and environmental return on investment. Commercial buildings account for one-fourth of New York City’s greenhouse gas emissions, according to The New York […]
Following on the “popularity” of last week’s Worst Idea, this week’s contenders are the governor of Texas and the pirates of Somalia.
The renowned rating agency, which somehow missed the insolvency of Wall Street’s fraud factories, has downgraded the creditworthiness of every local government in the country.
Monroe, LA has won 200-300 new jobs by 2011 as Gardner Denver Thomas company consolidates its Wisconsin manufacturing operations to the South.
The Innovate Texas Foundation got started this week in Austin to serve as an umbrella organization that will help Texas compete with other states attracting technology companies.
Here’s my nomination for the Worst Idea of the Week—and yes, it’s only Wednesday but I’m confident this gem will not lose its luster before next Monday. You probably know this: the recessed U.S. economy is plagued by layoffs; a staggering 663,000 jobs were shaved away by employers in March alone, bumping the national unemployment rate to 8.5%. Many projections forecast that 1 in 10 people will be without work in the U.S. by the end of 2009. But you may not know this: the Fox network acknowledged today that it is making a reality show out of the troubled economy. An upcoming series titled “Someone’s Gotta Go” lets employees of a small business decide which one of its colleagues will be laid off. Each week, a different company lays off an employee. Fox says it has no air date yet for the series, which is being developed by the production company behind reality borefest “Big Brother” and the no-talent-or-skill-required game show, “Deal or No Deal.” Fox also wouldn’t reveal the new show’s host, which it says is a business consultant who will offer advice to participating companies. So, as millions of Americans worry about their job security or are unable to find employment, TV execs expect us to tune in weekly to a reality show that will glorify layoffs? Are we supposed to find suspense or humor in watching fellow citizens not only receive their pink slips, but do so while being humiliated by coworkers voting them out of their offices? Or wait, maybe Fox will put some heartfelt spin on this show and turn it into a sappy, corporate version of “Extreme Makeover: Home Edition.” Even if the network finds a way to not make the tone of this show so appalling, the very basis still is exploitive and mean-spirited, no? Here’s what I’m curious to see: no, not “Someone’s Gotta Go.” Rather, what companies are going to buy commercial airtime during this series?! Are struggling car makers going to advertise their new hybrids in between cliffhanging segments? Retail chains in foreclosure are going to announce their everything-must-go liquidation sales? Chain restaurants are going to offer 2-for-1 appetizers to families that can’t afford to go out to eat? I certainly hope that companies have the foresight to dodge advertisements that would support this show. And I hope that, if the show makes it to prime time, a hard-hit, weary American workforce collectively turns off its television sets.
In the midst of a deep recession, sustainable development, green building, smart growth and alternative energy move to the top of the priorities list.
Consumed by guilt, former U.S. Treasury Chief Hank Paulson has donated his net worth to charity and is now peeling potatoes at a soup kitchen.
My recent jaunt through central Germany featured high-profile interviews with economic ministers, financial experts, and corporate executives…and some local apfelwein.