OptionsHouse CEO, George Ruhana, today posted an open letter to U.S. Department of Treasury Secretary Timothy Geithner on his blog on the online brokerage’s Web site. Ruhana wrote the letter to highlight the shortcomings of the TARP warrant buyback process and propose real alternatives to help bolster the struggling U.S. economy and chip away at the national deficit.
From Ruhana’s blog post:
“The U.S. taxpayers backstopped the banks that accepted TARP money when no one else would and should be rewarded for stabilizing the system. However, rather than working to secure the best return for the American people by opening up the …read more

Mortgage rates rose this week, with the average 30-year fixed mortgage rate rising to 5.45%. The average 15-year fixed rate mortgage climbed to 4.86% and the average jumbo 30-year fixed rate is back up to 6.60%. This comes after weeks of stable rates and represents their highest point since early February.
According to Bankrate.com, the potential General Motors bankruptcy and a week of substantial government borrowing caused the rates to rise. Yields on benchmark Treasury yields increased as a glut of new supply hit the market, and the prospect of a significant corporate bankruptcy further agitated would-be bond investors.
While mortgage rates …read more

Yesterday the Obama Administration revealed their three-part Public-Private Investment Program to clean up so-called toxic assets off bank books. Here’s the plan.
Part 1 – Bundling Whole Mortgages
Under one component of the plan, the Federal Deposit Insurance Corporation (FDIC) will provide oversight for a program of bundled mortgages. Banks will group whole mortgages together to sell to private investors. The FDIC will then auction these off. Making the investment attractive is the fact that the government would lend up to 85% of the purchase price for each portfolio of mortgages. (See my post on leverage from last week.)
Part 2 – Pooled Mortgages
While the bundling …read more

Discover Financial Services revealed on Friday that it has received $1.2 billion in cash through the U.S. Treasury Capital Purchase Program.
The company announced last December that it would apply for the capital and in January said in a regulatory filing that it was approved.
Discover sold 1.2 million share of its preferred stock and a 10-year warrant to buy 20.5 million shares of its common stock at $8.96 per share.
Discover Financial Services joins hundreds of other financial companies that have received government capital during the economic crisis. The Treasury’s Capital Purchase Program is funneling up to $250 billion into banks.
Image: Flickr

Today’s big, fun outrage (and there seems to be a new one every day) is that most banks didn’t pay their FDIC insurance premiums between 1996 and 2006.

The US has been a leader in financial markets for quite a while now. Unfortunately, as anyone interested in international business knows, that may well be changing considerably. Why? Well, necessary deregulation combined with some archaic laws which remained led to a veritable regulation-phobia, and most everybody involved was making too much money to care. The result? That lack of oversight led to excessive risk taking by entities which were either implicitly government-backed or which, as it turns out, were simply “too large to fail.” That, and many Americans are sitting on properties which aren’t likely to be worth what …read more