Bank of America to cut 30-35,000 jobs, Citigroup to cut 52,000 jobs.

Bloomberg reported this on Thursday, here is an excerpt:

“Dec. 11 (Bloomberg) — Bank of America Corp., the third- largest U.S. bank, said it plans to cut 30,000 to 35,000 positions over the next three years because of its acquisition of Merrill Lynch & Co. and the weak economic environment.

The final number of job cuts won’t be decided until early next year, the Charlotte, North Carolina-based bank said in a statement today. The companies together employ 307,000 people, including about 60,000 at New York-based Merrill Lynch. Bank of America spokesman Scott Silvestri said the “vast majority” of job cuts will come next year.

All lines of businesses and staff units will be affected, and “as many reductions as possible” will be made through attrition, Bank of America said. The companies have already begun dismissing equity analysts, according to a person briefed on the changes.

“They are saying that even though we’ve got the best efficiency of any large bank holding company, we still have extra costs,” said Christopher Whalen, managing director of Institutional Risk Analytics, a market-research firm. “They still have to throw more stuff out of the boat because they have to stay afloat.”

Bank of America is the latest firm to announce a workforce reduction amid the worst financial crisis since the Great Depression. Citigroup Inc. is planning to eliminate 52,000 jobs in the next year….”

Read world-renowned Harvard economist, Greg Mankiw’s take on the AIG bailout, here.

World-renowned Harvard Economist, Greg Mankiw, had the following to say about US Taxpayers bailing out international banks and insurance companies on Monday: (see his post in its original format by clicking here.)

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More Capital for the Financial System

Doug Elmendorf and Paul Krugman seem to agree that the government should be putting capital into banks and other financial institutions, in exchange for a share of bank equity, rather than using taxpayer dollars to buy bank assets that no one else wants at prices no one else will pay.

See also Sebastian Mallaby, who conveys this proposal:

Raghuram Rajan and Luigi Zingales of the University of Chicago suggest ways to force the banks to raise capital without tapping the taxpayers. First, the government should tell banks to cancel all dividend payments. Banks don’t do that on their own because it would signal weakness; if everyone knows the dividend has been canceled because of a government rule, the signaling issue would be removed. Second, the government should tell all healthy banks to issue new equity. Again, banks resist doing this because they don’t want to signal weakness and they don’t want to dilute existing shareholders. A government order could cut through these obstacles.”

Securities and Exchange Commission list of Non-short-sellable stocks grew to nearly 900 Friday, including Ford and Chevrolet…the crisis is already worse than anyone is admitting.

The following is from the 23 September New York Times, written by Michael J. De La Merced:

“….The list of companies that regulators are protecting from short-sellers keeps growing, as do the questions surrounding it.

By Monday evening, the number of companies on the list rose to nearly 900, from 799 on Friday, when the Securities and Exchange Commission sought to restrict bearish bets against financial companies to help stabilize the markets.

Nearly every major bank is now included, along with large insurance companies and others. Trading in bank stocks withered on Monday amid uncertainty over the rules and the sweeping bailout that the Bush administration has proposed for financial companies.

But many questions remain. Some analysts — and a few firms initially left off the list — complained that the initial S.E.C. roster was incomplete.

By the weekend, the S.E.C. delegated the task of adding more companies to the initial 799 to financial exchanges like NYSE Euronext and the Nasdaq. On Sunday afternoon, NYSE Euronext, which operates the New York Stock Exchange, sent out an e-mail message to all of its listed members, asking them to submit reasons why they should be given short-selling protection. Companies had to fit one of seven categories of financial firms listed by the S.E.C. Applications were reviewed by NYSE Euronext’s listings division.

Many financial firms that might seem like natural members of the list — banks like Credit Suisse, the money managers AllianceBernstein and Legg Mason and American Express — did not make the cut until Monday. BlackRock, the big investment firm that has done work for the government during several crises this year, was not added until Monday evening.

A few additions seemed a bit more puzzling. Both General Electric and General Motors were added Monday morning, prompting a few jokes from pundits. But the companies argue that they fall under the guidelines set out by the S.E.C.

General Motors, for example, notified the regulator on Friday that it owned the National Motor Bank, a savings and loan that qualifies it for inclusion on the list, according to Julie M. Gibson, a G.M. spokeswoman. The S.E.C. responded and, after a series of talks between the two, added the carmaker to the list by Monday.

By Monday evening, the Ford Motor Company, which also owns a bank, was added to the list.

Yet as others sought to be added, one company chose to remove itself from the list.

The Diamond Hill Investment Group, a small investment manager that is listed on the Nasdaq, said Monday that it opted out of the protection program. When the firm learned on Friday that it was a part of the no-short list, it asked to be removed, according to Rob Dillon, the firm’s chief executive.”

U.S. Central Bank commits US taxpayers to foot 100% of $85 billion AIG bailout, despite the company’s INTERNATIONAL existance and importance (read-bailed out at behest of foreign central banks with only US tax payer money!!??)

Click here to read a Great Opinion Piece  (‘The fleecing of America’) concerning America’s new, diminished role as a pauper nation amongst the world’s new “wealth centers” in China, India, Brazil and the Persian Gulf States and about the lack of foreign investment support in helping to save the international conglomerate AIG (billions in U.S. taxpayer dollars spent to save international company????) Written by Roger Cohen, Published in the New York Times on Sunday, the following is an excerpt:

“…But toxic mortgage-backed securities were pedaled by plenty of foreign banks. And the decision to pour $85 billion of U.S. taxpayers’ money into the rescue of American International Group (A.I.G.), the insurance giant, followed appeals from foreign finance ministers to Henry Paulson, the Treasury secretary, to save a global company.

Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, told me: “Paulson said he was getting calls from finance ministers all around the world saying, you have to save A.I.G. Well, they should have been asked to contribute to the pot.”

Frank has a point. (He should coach Barack Obama on how to put economics in plain language.) As Frank said on “The Charlie Rose Show,” “I don’t think the European Central Bank should be free to spend the Federal Reserve’s money and not put any in.”

I know, you reap what you sow. Nobody’s itching to help the Bush administration. World central banks did inject billions in concerted action to help stabilize money markets. But the U.S. has essentially been on its own. Now foreign banks with U.S. affiliates will want a slice of the $700 billion bailout. That doesn’t make sense until the burden of this rescue starts reflecting a globalized world.

I asked Frank why Paulson and Ben Bernanke, the Federal Reserve chairman, did not get more foreign support. “I think it’s a perverse pride thing,” he said. “We don’t ask for help. We’re the big, strong father figure. But let’s be realistic: we’re no longer the dominant world power.”

It’s time for a responsibility shift. Call it the Hirst reality check. If he can sell a formaldehyde-pickled sheep with gold horns for millions while Lehman goes under, perhaps it’s time for everyone to help a little when Americans get fleeced.”  😦

$124.6 Billion Tax payer bailout of financial institutions payed from 1986-1996, ridiculous.

From Wikipedia’s article on “savings and loan crisis,” here:

…While not part of the Savings and Loan Crisis, many other banks failed. Between 1980 and 1994 more than 1,600 banks insured by the Federal Deposit Insurance Corporation (FDIC) were closed or received FDIC financial assistance. ^[13]

During the Savings and Loan Crisis, from 1986 to 1995, the number of US federally insured savings and loans in the United States declined from 3,234 to 1,645. ^[14] This was primarily, but not exclusively, due to unsound real estate lending.^[15]

The market share of S&Ls for single family mortgage loans went from 53% in 1975 to 30% in 1990.^[16]

U.S. General Accounting Office estimated cost of the crisis to around USD $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government from 1986 to 1996.

(/h2>^[17] That figure does not include thrift insurance funds used before 1986 or after 1996. It also does not include state run thrift insurance funds or state bailouts.

The concomitant slowdown in the finance industry and the real estate market may have been a contributing cause of the 1990-1991 economic recession. Between 1986 and 1991, the number of new homes constructed dropped from 1.8 to 1 million, the lowest rate since World War II. ^[18]

A taxpayer funded government bailout related to mortgages during the Savings and Loan crisis may have created a moral hazard and acted as encouragement to lenders to make similar higher risk loans during the 2007 subprime mortgage financial crisis. ^[19]