Saint Louis - Business and Technology News

St. Louis Business & Technology News

"When you think Saint Louis, think Saint Louis Front Page," a weekly publication covering the news and events in the greater St. Louis area.

Power & Light District

Sprint Center

KC Hotel Guide

How To Reach Us:
St. Louis Front Page
P.O. Box 1354
St. Louis, MO 63188

Voice: 314-771-0200
Fax: 314-771-0300

To submit news, contact:
editor@slfp.com

To advertise, contact:
advertising@slfp.com

The U.S. Treasury Department has invested another $10 billion in Bank of America Corp. under the $700 billion federal bailout of the nation's financial system. In addition, the Treasury will invest $20 billion in Bank of America from the Troubled Assets Relief Program in exchange for preferred stock with an 8 percent dividend to the Treasury. Photo above of Bank of America Plaza in downtown St. Louis

Treasury Invests Another $10 billion in Bank of America
ST. LOUIS (PRNewswire), January 17, 2009 - The U.S. government has entered into an agreement with Bank of America to provide a package of guarantees, liquidity access and capital as part of its commitment to support financial market stability.

Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $118 billion of loans, securities backed by residential and commercial real estate loans, and other such assets, all of which have been marked to current market value.

The large majority of these assets were assumed by Bank of America as a result of its acquisition of Merrill Lynch. The assets will remain on Bank of America's balance sheet. As a fee for this arrangement, Bank of America will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In addition, Treasury will invest $20 billion in Bank of America from the Troubled Assets Relief Program in exchange for preferred stock with an 8 percent dividend to the Treasury. Bank of America will comply with enhanced executive compensation restrictions and implement a mortgage loan modification program.

Treasury exercised this funding authority under the Emergency Economic Stabilization Act's Troubled Asset Relief Program (TARP). The investment was made under the Targeted Investment Program. The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security.

Separately, the FDIC board announced that it will soon propose rule changes to its Temporary Liquidity Guarantee Program to extend the maturity of the guarantee from three to up to 10 years where the debt is supported by collateral and the issuance supports new consumer lending.

With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy. As was stated in November when the first transaction under the Targeted Investment Program was announced, the U.S. government will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks.

ST. LOUIS - "All I can say is wow," stated Senator Barack Obama, as he took the stage before a record-breaking crowd of over 100,000 supporters who gathered at the Gateway Arch on Saturday, October 18, 2008, for the 'Change We Need Rally'.

U.S. Consumer Confidence Sinks Lower as Americans Appear to Be Waiting for the Obama Administration to Throw It a Lifeline
ST. LOUIS (PRNewswire), January 17, 2009 - Consumer sentiment reached a six-year low as Americans continued to be rocked by increasing job losses, poor holiday shopping season reports and the ongoing inability of the government and the private sector to stabilize the economy, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index.

As a result, the overall RBC CASH Index stands at 13.3 for January 2009, down slightly from 15.3 in December 2008. However, the continued slide in consumer confidence is offset somewhat by an increase in expectations for the future, just days before President-elect Obama is inaugurated.

"Consumer sentiment remains weighed down by concerns about the economy, people's wealth in terms of their home equity and 401(k) values, and the rising prospects of long-term unemployment," said T.J. Marta, Economic and Fixed Income strategist for RBC Capital Markets. "Despite this downcast mood, the tick higher in expectations suggests hope for the future under the new administration, although the outlook is clearly cautious."

The RBC CASH Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments.

The Saint Louis Front Page is owned and maintained by the Moore Design Group for the sole purpose of disseminating news and information about the Metropolitan Saint Louis area. Text or graphics may not be copied, rewritten or distributed in any manner whatsoever without written permission. For more information, contact editor@slfp.com All rights reserved world wide © 1996 - 2009 Moore Design Group.