plus 4, Bank CEOs defend actions in crisis - CNN Money

Bank CEOs defend actions in crisis - CNN Money
Businesses Criticize Cast of Inquiry Panel - Yahoo Finance
Obama to propose bank tax to recoup bailout - CNN Money
Enviro-Log Selects Dresner for Public Relations - Stockhouse
National Bank to Donate Up to $250,000 for the Victims in Haiti - Yahoo Finance

Bank CEOs defend actions in crisis - CNN Money

Posted: 13 Jan 2010 07:42 AM PST

CEOs Lloyd Blankfein of Goldman Sachs (left), Jamie Dimon of JPMorgan Chase, John Mack of Morgan Stanley and Brian Moynihan of Bank of America being sworn in Wednesday before the Financial Crisis Inquiry Commission.By Jennifer Liberto, senior writerJanuary 13, 2010: 10:54 AM ET

NEW YORK (CNNMoney.com) -- Four top bank chief executives told a panel probing the financial crisis Wednesday that they made mistakes but didn't realize how bad they were at the time.

In a heated exchange in Washington with the head of the Financial Crisis Inquiry Commission, Lloyd Blankfein, Goldman Sachs' CEO, agreed the banks had assumed too much exposure to risk at the height of the crisis, and he wished he could go back and change things.

"Anyone who says I wouldn't change a thing, I think, is crazy," Blankfein said. "Knowing now what happened, whatever we did, whatever what the standards of the time were -- It didn't work out well."

"Of course, I'd go back and wish we had done, whatever it took, not to find ourselves in the position we found ourselves in," he added.

The remarks came during a hearing of the Financial Crisis Inquiry Commission, a 10-member panel appointed last summer by Congress. Testifying were chiefs of some of the best-known and largest banks: Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500).

The panel's chairman, Philip Angelides, has said that he's interested in hearing about the banks' role in creating the crisis and benefiting from the Troubled Asset Relief Program, set up to provide them with liquidity.

During the hearing, Angelides cast doubt on Blankfein's defense of Goldman Sachs' actions in the mortgage markets -- such as buying parts of risky mortgages and then placing bets against such morgages -- as part of their job as a "market maker."

"It sounds to me a little like selling a car with faulty breaks and then buying an insurance policy on the buyers of those cars," Angelides said. "It doesn't seem to me that that's a practice that inspires confidence."

Blankfein responded that they were just selling what investors wanted.

"These are the professional investors who want this exposure," he said. "Even today, people are coming for exposure to these very products. That's what a market is."

The chief executives -- Blankfein, Jamie Dimon of JPMorgan Chase, John Mack of Morgan Stanley and Brian Moynihan of Bank of America -- testified under oath, standing up for a swearing-in during the public session.

Most of the testimony revolved around bad lending in the housing market.

Dimon said that one of the the banks' "big misses" was failing to "stress test" the housing market.

"We didn't stress test housing prices going down by 40%," Dimon said.

Blankfein, Dimon and Mack all talked about the need for "sound" regulatory changes to help ward off future crises.

"I want to be clear that I do not blame the regulators. . .however, it is important to examine how the system could have functioned better," Dimon said. "The current regulatory system is poorly organized with overlapping responsibilities, and many regulators did not have the statuatory resolution authority needed to address the failure of large, global financial companies."

In written testimony, the bank chiefs laid out their banks' mistakes that led to the crisis, detailing the housing bubble, with "new and poorly underwritten mortgage products," "excessive speculation," and mortgage securitization that allowed people to duck responsibility for poorly underwritten loans.

However, they added they didn't expect the financial crisis and especially its magnitude.

"After the fact, it is easy to be convinced that the signs were visible and compelling," Blankfein said. "In hindsight, events not only look predictable, but look like they were obvious or known. But none of us know what is going to happen."

Previously, the commission talked to Treasury Secretary Tim Geithner and Federal Reserve Board Chairman Ben Bernanke, but that testimony isn't being made public yet.

Lawmakers say the commission was modeled after the Pecora Commission, a panel that was convened after the 1929 Wall Street crash and other events leading to the Great Depression.

The Pecora panel's findings led to an overhaul of federal banking laws, including the creation of the Glass-Steagall Act of 1933. Glass-Steagall divided investment banking from government-insured commercial banking; ending that separation in the 1990s was seen by some critics as contributing to the current crisis.

The Financial Crisis Inquiry Commission has taken a while to get up on its feet.

The panel was appointed last July and held its first meeting in September. It has only started getting staffed up over the past few months.

It has new offices in downtown Washington, a few blocks northwest of the White House. Funded to the tune of $8 million, it aims to employ between 40 and 50 investigators and other staffers.

The crisis panel's one big goal is to complete a final report, sort of like the final 9/11 Commission report that found federal agencies missed signs of the impending terrorist attacks in 2001. The financial crisis report is due Dec. 15.

Critics have noted the panel's impact may be blunted by timing, as the House has already passed a bill to overhaul regulations and the Senate is deep in negotiations on similar proposals.

But panel members have consistently pledged their work will serve as more than window dressing for politicians worried about the appearance that they allowed the financial crisis to happen.

The panel, which has subpoena power, plans to issue interim reports as it collects data, Angelides has said.

The panel's second-in-command is Bill Thomas, a retired California Republican congressman described as strong-willed during his tenure running the powerful Ways and Means Committee.

Other key panel members include: Keith Hennessey, an economic adviser under President George W. Bush; former Sen. Bob Graham, a Florida Democrat; and Brooksley Born, a past chairwoman of the Commodities Futures Trading Commission, who called for stronger regulation of complex financial products such as derivatives in the 1990s.

The panel didn't invite Citigroup (C, Fortune 500) CEO Vikram Pandit this go-round, said panel spokesman Tucker Warren. "That doesn't mean we won't be talking with Citigroup, either publicly or privately, in the course of our investigation," he added.

The chief executives are no strangers to Washington hearings. Blankfein, Dimon and Mack were seated together last February when a House Financial Services pelted them with questions about the TARP program.

This time around, Angelides said he expects the tone to be "professional" but also "tough, thorough and fair."

"There's a real hunger among the people of this country to know what happened," Angelides said. "We're not out to get anyone. We're out to get to the bottom of what happened as best we can."

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Businesses Criticize Cast of Inquiry Panel - Yahoo Finance

Posted: 13 Jan 2010 07:06 AM PST

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Plaintiffs Firm's Ties to Commission Probing Financial Crisis Raise Concerns That Information Could Be Used to Aid Litigants

A congressional commission examining the causes of the financial crisis was drawing fire even before its first public hearing got under way Wednesday, with business interests complaining that some panel members' ties to a major plaintiffs law firm could aid litigants seeking to sue financial firms.

The panel, the Financial Crisis Inquiry Commission, was created by Congress last year and also includes several members with ties to the banking industry. It will begin taking sworn testimony Wednesday from the chief executives of several big Wall Street banks, including Goldman Sachs Group Inc. and J. P. Morgan Chase & Co.

The panel also will hear from federal, state and local officials about their current efforts to uncover wrongdoing.

The San Diego-based law firm with ties to the commission, Coughlin Stoia Geller Rudman & Robbins, has filed dozens of lawsuits against major banks since 2007, according to federal court records. A longtime lawyer with the firm, Byron Georgiou, sits on the 10-member commission. A senior commission staffer, Christopher Seefer, is on leave from his position as a partner with the law firm.

The commission chairman, former California Treasurer Phil Angelides, was a trustee of state pension funds that periodically used Coughlin Stoia's predecessor firms in securities litigation against the likes of former telecommunications giant WorldCom, which collapsed in a massive accounting fraud that resulted in a 25-year prison term for its CEO. Mr. Angelides received about $250,000 in contributions from lawyers with the firm during his 2006 campaign for governor.

"Appointing plaintiffs' class-action trial lawyers to the financial-crisis commission, and to its staff...raises a very real concern as to whether they will use the important work of the commission ultimately to feather their own nests," said Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, an offshoot of the Chamber of Commerce that seeks to ease the burden of civil litigation for businesses.

In a written statement, Mr. Angelides rejected any suggestion he would be influenced by the interests of trial attorneys. "My fellow commissioners and I have one job to do -- to conduct a full and fair inquiry on behalf of the American people into the causes of the financial meltdown. Over the course of my career, I have received support from tens of thousands of individuals and worked with people from all walks of life."

In an interview, Mr. Georgiou emphasized that he doesn't have any financial interest in Coughlin Stoia cases against companies that the commission might look into, and would "certainly" recuse himself if he did. He is of counsel to the firm, and doesn't have an equity interest in it.

Coughlin Stoia was formed when the high-profile securities-litigation firm Milberg Weiss Bershad Hynes & Lerach split in 2004.

Dan Newman, a spokesman for Coughlin Stoia, said critics of the firm's ties to the commission were seeking "to prevent the public from learning the truth about the root causes of the financial meltdown."

A panel spokesman said commissioners have agreed to file financial-disclosure statements, which they aren't required to do. He added that the commission staff is bound by confidentiality agreements that prohibit the use of nonpublic information outside the panel's purview. Staffers also agree not to use their positions to further their own private interests or those of others, according to a copy of the document.

The commission has been ordered to write a final report. It hasn't been determined how much of the information the panel gathers will be made public. Some banking representatives worry that much of it will be. That could save time and expense for plaintiff lawyers who sometimes have to litigate for years to get discovery in securities cases.

The commission letter inviting the chief exectuvies to testify at Wednesday's hearing, for example, asks for a number of admissions that could be useful in a lawsuit. It tells the CEOs to address "what were the primary errors and business practices that caused the financial problems at your company and what actions have been taken to address them."

Some panel members and staffers have close ties to businesses. Vice chairman Bill Thomas, a former Republican congressman, is a government-relations adviser with a law firm that has banking clients. Peter Wallison is a fellow at the conservative American Enterprise Institute and a critic of many financial-regulation proposals. The commission employs a number of lawyers who previously worked for law firms that typically defend corporations, including banks.

Paul Light, a professor of public service at New York University, said the ties to the plaintiff's firm could hurt the commission. "Yes, the banks are in the spotlight, but the commission must maintain its distance from the perception that this is all a 'gotcha' exercise," he said.

Write to John D. McKinnon at john.mckinnon@wsj.com and Louise Radnofsky at louise.radnofsky@dowjones.com

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Obama to propose bank tax to recoup bailout - CNN Money

Posted: 13 Jan 2010 07:13 AM PST

By Jennifer Liberto, senior writerJanuary 13, 2010: 10:17 AM ET

NEW YORK (CNNMoney.com) -- President Obama will propose a new tax on financial institutions Thursday to ensure that taxpayers who bailed out banks get paid back, according to a senior administration official.

The White House wants to raise as much as $120 billion through a new tax on banks to cover losses in the federal bailout program.

The law that created the $700 billion Troubled Asset Relief Program empowered the president to ask Congress to recoup money if bailouts were not paid back in full.

TARP dictates that the Office of Management and Budget consider such action five years after TARP went into effect in October 2008 to prevent the federal bailout from adding to the deficit.

When the TARP bill was hastily debated, the provision was key to winning enough support from wary lawmakers to push the bill through Congress.

This new proposal to tax banks has been under discussion since August, a senior administration official said Tuesday.

The federal bailout program has always been a controversial topic, but news of executive bonuses now being awarded for banks' stellar performance in 2009 is throwing new fuel on populist anger.

Congress would still have to approve any proposed new tax.

Robert Gibbs, the White House press secretary, would not discuss on Monday how a possible bank fee would fit into Obama's fiscal year 2011. But Gibbs said it is the president's "goal" to ensure the "money that taxpayers put up will be paid back in full."

While most of the big banks have started paying back their TARP investments, the government still has a lot of money on the line and is likely to for years to come.

Last month, the Treasury estimated that the net cost of TARP to taxpayers would be $41.4 billion.

For example, Treasury Secretary Tim Geithner said last month that the bailouts of the automakers and insurer American International Group (AIG, Fortune 500) would not be paid back in full.

"There is a significant likelihood that we will not be repaid for the full value of our investments in AIG, GM and Chrysler," Geithner told an oversight panel.

Yet, the financial industry tax under discussion could impact the entire financial industry, a prospect the banking industry opposes.

Although few details are available about the proposed fee, the administration official suggested banks would be required to pay, even if the losses were incurred by GM and Chrysler.

"Imposing new taxes on top of the increased regulatory costs will weaken the industry, just when the industry is helping lead the economic recovery," said Scott Talbott, chief lobbyist for the Financial Services Roundtable, a bank lobbying group.

And it's still unclear what, if anything, can be done to prevent the fee from being passed to bank account holders.

U.S. Chamber of Commerce President Thomas Donohue said Tuesday he expected any new fee imposed would be passed on to consumers.

"If you don't pass it on to the consumer, than you're going to have smaller profits, and then if you have smaller profits, your stock goes down," Donohue said.

The total revenue collected from the tax would be no higher than $120 billion, since that is the highest conservative estimate of the cost of TARP, the senior administration official said. However, the Treasury Department expects the total loss number to shrink over the course of future years.

- CNN White House Correspondent Dan Lothian contributed to this report.

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Enviro-Log Selects Dresner for Public Relations - Stockhouse

Posted: 13 Jan 2010 07:49 AM PST

Third Largest Producer of Manufactured Firelogs Aims to Build Brand Awareness and Market Share

CHICAGO, IL, Jan 13, 2010 (MARKETWIRE via COMTEX News Network) --

Dresner Corporate Services is pleased to announce that it has been retained by Enviro-Log, Inc. for public relations. Enviro-Log(R) is an eco-friendly, consumer products and recycling company headquartered in Fitzgerald, Ga., and the third largest producer of manufactured firelogs in the U.S. Its firelogs are made of 100 percent recycled materials and burn cleaner than wood while generating 50 percent more heat. Enviro-Log firelogs can be purchased at select national retail locations including Home Depot, Wal-Mart, K-Mart, WholeFoods, Meijer, Fred Meyer, Harris Teeter, Winn-Dixie and regional retailers throughout the U.S. Enviro-Log firelogs are also available in Canada at Wal-Mart and Canadian Tire locations. The company also offers earth-friendly firestarters and accelerants.

"Dresner Corporate Services has a strong track record of helping its clients build brand awareness, generate new customer leads and help shorten the sales cycle," said Ross McRoy, president and CEO of Enviro-Log. "We look forward to working closely with David Gutierrez and the Dresner team to educate the market about our product line while continuing to build market share."

Enviro-Log is the largest waxed cardboard recycler in the U.S. The company uses its recycled waxed cardboard to manufacture its earth-friendly firelogs that burn cleaner and more efficiently than firewood, while offering more uses than competitive wax-sawdust firelogs. Currently, Enviro-Log firelogs are the only manufactured firelog tested safe for use in woodstoves, fireplaces, chimineas, campfires and outdoor tailgating and cookout events.

"With its use of 100 percent recycled materials combined with better performance and more flexibility than competitive firelogs, Enviro-Log has a very compelling value proposition for both retailers and consumers," said David Gutierrez, senior vice president and head of the public relations practice for Dresner Corporate Services. "We look forward to working closely with Ross McRoy and the Enviro-Log management team to educate the marketplace about Enviro-Log's exciting line of earth-friendly products."

In 2009, Enviro-Log was recognized by the state of Georgia as a Manufacturer of the Year nominee during the state's Manufacturing Appreciation Week. Enviro-Log is also a partner in the Partnership For A Sustainable Georgia, which recognizes exemplary environmental leaders that have made significant progress in moving towards sustainability including volunteering in community outreach activities, serving as a mentor to other organizations, sustaining natural resources, and minimizing its environmental footprint.

More information on Enviro-Log can be found at www.enviro-log.net or by calling (866) 343-6847. Retailers can also send an email to sales@enviro-log.net.

About Dresner Corporate Services

Dresner Corporate Services (DCS) is a strategic communications agency specializing in public and investor relations. Headquartered in Chicago, DCS also maintains a service office in Austin, Texas. DCS is affiliated with Dresner Partners, a FINRA-registered, middle-market investment bank that provides financial advisory services to business owners and managers throughout the United States, including institutional private placements of debt and equity, merger and acquisitions, and valuation and strategic consulting. More information is available at www.dresnerpr.com.

Enviro-Log is a registered trademark of Enviro-Log, Inc. All other trademarks or registered trademarks are properties of their respective companies.

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=1152355

Media Contacts: Christian Scarborough Dresner Corporate Services (512) 244-7088 cscarborough@dresnerco.com Christina Bereta Dresner Corporate Services (312) 780-7223 cbereta@dresnerco.com

SOURCE: Enviro-Log

mailto:cscarborough@dresnerco.com mailto:cbereta@dresnerco.com

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National Bank to Donate Up to $250,000 for the Victims in Haiti - Yahoo Finance

Posted: 13 Jan 2010 06:52 AM PST

MONTREAL, QUEBEC--(Marketwire - 01/13/10) - National Bank (TSX:NA - News) will contribute up to $250,000 to the Canadian Red Cross to support the organization's relief efforts for the victims of the earthquake in Haiti.

In addition to making a corporate donation of $150,000, National Bank will match all donations made by its employees and the general public through its branches, up to $100,000.

"We cannot be indifferent to events like the one in Haiti", said Louis Vachon, CEO of National Bank Financial Group. Being involved in the community and having many employees and clients coming from that country, we want to support them in these difficult times by making an important donation to the Red Cross".

National Bank has also taken the following initiatives to support the fundraising efforts of the Canadian Red Cross:

- National Bank MasterCard cardholders may, if they wish, exchange their reward points, free of charge, for a cash donation to the Canadian Red Cross by calling 514-847-8280 or 1-800-341-8083.

- Counter cards placed at the counter will remind Bank customers that they can make donations at any National Bank branch.

All donations made at National Bank branches will be sent to the Canadian Red Cross and will be used to provide immediate relief and basic supplies to the victims. The Canadian Red Cross will issue tax receipts for all donations of $10 and over.

For more information, please contact Customer services of National Bank Group at 514-394-5555 or 1-888-483-5628.

About National Bank of Canada

National Bank of Canada is an integrated group that provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has more than $132 billion in assets and, together with its subsidiaries, employs 17,747 people. The Bank's securities are listed on the Toronto Stock Exchange (TSX:NA - News). For more information, visit the Bank's website at www.nbc.ca.

The telephone number provided below is for the exclusive use of journalists and other media representatives.

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