Billionaire investor George Soros said yesterday (Monday) that the U.S. recovery would be a slow one because of all the “basically bankrupt” financial companies impeding it.

U.S. Federal Reserve Chairman Ben S. Bernanke and Congress agreed Friday that the financial system – not the American taxpayer – should bear the costs of bank bailouts. Sheila Bair, head of the Federal Deposit Insurance Corp. (FDIC), wants the banks to ante up $45 billion – three years’ worth of deposit-insurance premiums – to bail out the fund that insures bank deposits.

When it comes to bank stocks, we all know that there were a number of Money Morning readers shrewd enough to buy Citigroup Inc. (NYSE: C) shares when the foundering giant’s stock price was below $1 a share.

If you’re one of those investors, good for you: With Citi’s shares now trading at nearly $4.70 a share,

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The U.S. government has already retrieved about $4 billion in profits from 8 of the biggest banks that have fully repaid their obligations from the $700 billion Troubled Asset Relief Program (TARP). The government has recorded profits of about $1.4 billion from its investment in Goldman Sachs Group Inc. (GS), $1.3 billion from Morgan Stanley (MS) and $414 million from American Express Company (AXP). Furthermore, the government has also reaped profits in the range of $100 million to $334 million from its investments in each of the following five banks: Northern Trust Corporation (NTRS), The Bank of New York Mellon Corporation (BK), State Street Corp. (STT), US Bancorp (USB) and BB&T Corp. (BBT). It also collected about $35 million in profits from 14 smaller banks that have paid back their loans. TARP was introduced in October 2008 to ...

It was just a short time ago that the American International Group [AIG: 1.66, 0.00 (0.00%)] name riddled the papers and news columns with updates on the insurance giant’s troubles and whether they would survive the economic downturn with severe capital issues. They received the biggest bailout in history and seemed to barely get by. Now, a few short months later, they must plan how they will re-pay their TARP money. We now have a clearer vision of exactly what assets may be auctioned off and what the new landscape of the financial sector may be. The next few months for AIG will vastly change its balance sheet and hopefully purge some of its debt owed to the U.S. government. Is it possible for this giant to stay alive, yet alone return to its past prominent state?

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By Shah Gilani
Contributing Editor
Money Morning

[Editor’s Note: Uncertainty will continue to be the watchword in the months to come. R. Shah Gilani – a retired hedge fund manager and a nationally known expert on the U.S. credit crisis – has predicted five key financial crisis “aftershocks” that he says will create substantial profit opportunities for investors who know just what these aftershocks are, and how to play them. In the Trigger Event Strategist , trigger events,” as gateways to massive profits. To find out all about these five financial-crisis aftershocks, and about the trigger-event profit strategy they feed into, The Trigger Event Strategist check out our latest offer.]

While the entire U.S. housing market was on the verge of collapse and corporate America was being systemically undermined, regulators purposely looked the other way.

Why would they do this?

The truth is that U.S. regulators believed the American …

While the entire U.S. housing market was on the verge of collapse and corporate America was being systemically undermined, regulators purposely looked the other way.  Why would they do this?

The truth is that U.S. regulators believed the American public couldn’t handle the truth that what had been allowed to happen, on their watch, was actually happening.

Unfortunately, we now face the same situation with credit default swaps, a derivative security that has the ability to destroy otherwise healthy companies with the virulence of a full-blown plague.

Until the American public understands this, and forces the government to take action, the odds of a repeat performance of what we refer to as the global financial crisis remain very high.

This is not an “Origin of the Species” seminal epic. Rather, it is a short story about the failure of evolutionists to recognize that, while creationism actually starts somewhere, it is actually the failure of

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Contrary to the prevailing analysis, we believe that the Obama and Bush administration insistence on protecting banks at the expense of the taxpayer is the result of a Machiavellian effort by Goldman Sachs and other major banks to influence U.S. economic policy by infiltrating the corridors of power.

Today, we duly note that Goldman Sachs has just hired former Barney Frank staffer Michael Paese to be its top Washington lobbyist. This position was formerly held by Mark Patterson, the current chief of staff at the Treasury.

Pease and Patterson are not the only ones to pass through the revolving door between Washington and Goldman. Bush’s Treasury secretary, Hank “The Hammer” Paulson is a former Goldman CEO. And his replacement, Tim Geithner, was mentored by Gerald Corrigan, a former New York Fed president and current partner and managing director of the Office of the Chairman of Goldman Sachs.

Who else was President Obama considering

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The first two weeks of 2009's earnings season have the perma-bears calling for earnings disasters in the Q1 results. A "sucker rally" is in progress they proclaim. But so far the profit jitters are unfounded and the only "suckers" to be found are packaged as candy on a stick. The season kicked off last week with Alcoa(AA) missing forecasts, but painting a quite rosy picture for 2009. AA stock has never looked back. Then came the Wells Fargo boom-shell and a string of other positive news on Thursday. And now just days after the Wells Fargo (WFC) surprise we have Goldman Sachs (GS) also crushing the street's expectations. GS also joins a significantly growing list of banks that are now planning to quickly pay back their treasury bailout monies. GS will issue $5 billion in ...

Pity the rich. Pity the CEOs. Pity the capitalists.

Poor Warren. He’s down to his last $25 billion. And Bill Gates can barely hold his head up; his pile has shrunk to barely $18 billion.

And do a Google search of “AIG outrage” and you will get 621,000 hits.

Alas, being rich isn’t as easy or as much fun as it used to be.

The rally paused yesterday. The Dow lost 7 points. It could be over. More likely, it will run for a few months. Gradually, people will come to think that this is the real thing. They’ll begin to imagine that it is 2003 all over again. Of course, it’s not…this market has nothing in common with the Great Rebound of 2003-2007. (More below…)

Oil traded at $47 yesterday; it is slipping toward the $50 level. And the dollar is slipping around too – it is losing ground against the euro, now

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We are now suffering the consequences of one of the most spectacular financial miscalculations in history, after investors around the world discovered that trillions of dollars invested in securities derived from U.S. home mortgages were far riskier than they had originally believed.

Part of this miscalculation can be attributed to misguided quantitative models that were used to assess those risks. The key inputs for those models were assumptions about underlying default rates and their correlations across different borrowers. Default rates and correlations were quite low up until 2005, because rising home prices made default a decidedly inferior option to refinancing for even the least credit-worthy borrower. But the rising home prices were themselves caused by the huge flow of capital for lending to this market, sucked in by the illusion of safety. When the flow of credit stopped and house prices began to fall, the

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HSBC said it was cutting 6,100 jobs… closing offices all over America.

Angela Merkel to Eastern Europe: Drop Dead!

You remember that famous cover story of the New York Daily News? New York was nearly bankrupt in 1975. The city asked the feds for a bailout. To his everlasting credit, Gerald Ford had the backbone to just say ‘no.’

Had he given the city a bailout, Ford (NYSE:F) might have won his race against Carter. He believes that that headline cost him the New York vote…and the election. Then again, had he given New York a bailout…the city might be more like Detroit.

The kindness of strangers is one of life’s delights, but once you begin to count on getting something for nothing you are on the road to Hell. At least, that is our view here at The Daily Reckoning.

Welfare ruined the lives of millions of people. (More on

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