Fed turns $2.8 billion profit on AIG bonds

Remember those pesky mortgage-backed securities the Federal Reserve had to take off AIG's hands at the worst of the financial crisis?

The Fed just finished selling all of them, and their return on investment isn't too shabby. The sales of the $19.5 billion portfolio turned a $2.8 billion profit for taxpayers.

"The completion of the sale of the Maiden Lane II portfolio has resulted in significant gains for the public and marks an important milestone in the wind-down of the extraordinary interventions necessitated by the financial crisis," William Dudley, president of the New York Fed, said in a statement.

The New York Fed first indicated last year that it would put the so-called Maiden Lane II securities up for auction. It sold off the first piece of the pie to Credit Suisse (CS) in January. Goldman Sachs (GS, Fortune 500) bought another chunk and Credit Suisse bought the remainder of the portfolio, announced today.

And just who is buying the assets from Credit Suisse and Goldman Sachs? None other than AIG (AIG, Fortune 500) itself.

AIG's Chief Executive Bob Benmosche said Friday that the insurance giant had recently purchased "just under $2 billion of the assets coming out of Maiden Lane II."

"Our crisis is over," he added.

That said, the Fed is not completely out of the woods yet. It still holds a separate portfolio related to the AIG bailout. That portion, called Maiden Lane III, includes the insurer's credit default swap business. Initially worth $29.3 billion when the Fed acquired it, it's now worth $17.6 billion, after many of the securities have matured and much of the loan has been paid back. The New York Fed has not indicated when it plans to start selling the remaining assets.
Federal Reserve pays $77 billion to Treasury

Stocks: Eyes on the economy

U.S. stocks were set for a higher open Friday, tracking gains in global stock markets, as investors awaited another round of economic data and corporate results.

The Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures rose betwen 0.2% and 0.3% ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Economic reports on tap for Friday include consumer sentiment and new-home sales, where investors hope for continued signs of momentum in the U.S. economy.

While a number of economic indicators have looked positive lately, the housing market remains a troubled sector.

The National Association of Realtors reported Wednesday that home prices fell to their lowest point in more than a decade in January. But on Thursday, the 30-year fixed mortgage rate rose off its all-time lows -- giving the housing sector a slight vote of confidence.

U.S. stocks closed higher Thursday despite looming worries about the Greek debt crisis, boosted by a strong report on Germany's economy and a decent reading on U.S. unemployment.
Money market funds dip back into eurozone debt

World markets: European stocks were higher in afternoon trading. Britain's FTSE 100 (UKX) edged up slightly, the DAX (DAX) in Germany rose 0.4% and France's CAC 40 (CAC40) added 0.4%.

Gingrich's $2.50 gas promise

NEW YORK Oil is a global commodity -- it can be shipped anywhere around the world. Its price is determined largely by global supply and demand.

The United States would have to remove itself from the global trade in oil and gasoline to set its own prices, a move that could set the country up for a supply shortage and that most economists would not support.

Caruso said it's just not a practical idea. "This is a global market with fungible supplies," he said. "We can't isolate ourselves."

His Airness, Michael Jordan, Is Still Flying High

When Michael Jordan announced this week that he was suing Chinese clothing maker Qiaodan Sports for allegedly using his name, likeness, and retired jersey number without authorization, it was another reminder of Jordan’s enduring power as a salesman. People don’t bother to steal brands that don’t sell. And the former Chicago Bulls No. 23 remains a marketer’s dream.

The popularity of Jordan, who turned 49 this month and hasn’t played in an NBA game in nine years, endures despite a post-playing career that has been, well, checkered. As majority owner of the Charlotte Bobcats and the first former player ever to own a franchise, he irked some during the NBA lockout this fall by reportedly taking a hardline against the players. (During the 1998 labor dispute, Jordan, then a player, famously dressed down now now-deceased Washington Wizards owner Abe Pollin, telling him, “If you can’t make a profit, you should sell your team.”) And his tenure in the front office with the Wizards from 2000 to 2003 was noted mostly for the colossal bust that is Kwame Brown, the player Jordan selected with the first pick of the 2001 draft. His Bobcats are currently 4-28. Jordan used the occasion of his induction into the Basketball Hall of Fame in 2009 to settle petty, ancient scores against everyone from Jeff Van Gundy to the high school coach who famously left him off the varsity team.

And then there are the fashion choices. In 2010, Jordan sported what was dubbed a Hitler mustache in a Hanes TV ad and drew mockery from the likes of Charles Barkley (“I don’t know what the hell he was thinking”), Jimmy Kimmel, (“He probably said, ‘Let’s see if I can wear a Hitler mustache and see if any one stops me’”), and Stephen Colbert (“Oh nein he didn’t”). Last year, his preference for oversize shirts and pre-shredded denim even became the inspiration for a blog called What the F*** Is Michael Jordan Wearing, which has drawn as many as 40,000 visits a day, according to its creator, Aaron Horton, a 28-year-old Web producer from Philadelphia. “He takes risks,” Horton says diplomatically.

Forbes' Five Richest Americans (PHOTOS)

Forbes magazine released its new list of the 400 Richest People in America. Bill Gates, founder of Microsoft Corp. topped the overall list with a net worth of $59 billion and remains the nation's richest individual since eight years, according to Forbes. He has been the wealthiest American every year since 1994.

Warren Buffet, who is the third richest man in the world, leads at second spot in the list. Buffet is the U.S. investor who recently urged President Obama to hike taxes for millionaires.

Wal-Mart siblings, Jim and Alice Walton, make the ninth and tenth spot, respectively.  John Walton’s wife, Christy, is the world's richest woman with $24.5 billion, which she inherited when John Walton died in an accident.

The head and Vice President of Koch industries- Charles Koch and David Koch are not far behind. The brothers share the same spot with $25 billion net worth each.

Investor George Soros, 81, has for the first time made it to the list of the 10 richest Americans and is the most surprising billionaire to have made the seventh spot in the Forbes list.

Meet the top five wealthiest Americans.

Bill Gates, founder of Microsoft and now philanthropist, is the wealthiest of all other billionaires on the list. He is the richest man in America with his net worth $59. Bill Gates, tops Forbes' list of the 400 richest Americans for the 18th year in a row.




81-year -old U.S. investor and world's third-richest man- Warren Buffett is the second richest man in America with $39 billion. The new 'Buffet Tax' proposed by the US President Obama, is named after him.

 Taking the No. 3 spot in Forbes list is the chief executive officer of Oracle- Larry Ellison, with overall net worth at $33 billion.

Charles Koch, head of Koch Industries spots the 4th spot in the list of richest Americans, with net worth $25 billion.

David Koch, executive vice president of Koch Industries, and younger brother of Charles Koch, spots 5th position in the Forbes list of wealthiest Americans with the same $25 billion net worth.

Alibaba wants to take Web unit private

Chinese Internet giant Alibaba, which has been in the headlines lately for its tussles with stakeholder Yahoo, wants to take its publicly traded Web portal private.

Alibaba Group said Tuesday that it made an offer to Alibaba.com's board of directors.

Alibaba Group owns about 73.5% of e-commerce leader Alibaba.com, which is the company's only publicly traded subsidiary. Under the terms of the deal, Alibaba Group would buy the other 26.5% of the company for 13.50 Hong Kong dollars ($1.74 U.S.) per share in cash.

That's a 55.3% premium above Alibaba.com's average closing price over the last 10 days -- but it's the exact same price the company fetched in its initial public offering in November 2007.

Taking the web portal private "will allow our company to make long-term decisions that are in the best interest of our customers and that are also free from the pressures that come from having a publicly listed company," Alibaba Group CEO Jack Ma said in a prepared statement.

Alibaba has been in the news frequently over the past year for its contentious relationship with Yahoo (YHOO, Fortune 500).

Yahoo owns about a 40% stake in Alibaba, which is considered one of its most valuable assets. But Ma and former Yahoo CEO Carol Bartz had a public dispute over ownership of Alipay, an online payment unit similar to eBay (EBAY, Fortune 500)-owned PayPal.

The companies reached an agreement in July 2011, but tensions continued. Ma said at a conference in late September that Alibaba would be "interested" in buying all of Yahoo -- a purchase that would essentially allow Ma to buy back control of that 40% Alibaba stake.

According to media reports, Yahoo had been in advanced talks with Alibaba and Japan-based Softbank to discuss selling its stakes in Alibaba and Yahoo Japan. But those talks reportedly collapsed earlier this month.

The new consumer bureau said Wednesday that it plans to target a kind of bank fee that makes customers see red: Overdraft protection penalty fees on checking accounts.

The Consumer Financial Protection Bureau, in announcing the inquiry, is also seeking public input on a new sample disclosure text on checking account statements.

The disclosure would highlight exactly what the fee is and how much the account was overdrawn to incur it. That information would appear in a so-called "penalty fee box."

"Overdraft practices have the capacity to inflict serious economic harm on the people who can least afford it," said the bureau's chief, Richard Cordray. "We want to learn how consumers are affected, and how well they are able to anticipate and avoid paying penalty fees."

Bureau officials had suggested last September that they planned to target overdraft fees.
ay they offer overdraft protection plans to spare customers the embarrassment of having their purchases denied because they have overdrawn their account. The purchase goes through, with a hefty fee ranging between $30 and $35, according to the consumer bureau.
No more debit card fees. What will the banks try next?

Consumer advocates say overdraft protection is what can cause a $3 latte to cost close to $40 when customers overdraw their accounts and start racking up penalty fees.

The Federal Deposit Insurance Corp. found in 2008 that consumers who overdrew 20 or more times per year paid an average of $1,610 in overdraft fees. That report spurred anger in Congress and among consumers and helped spur the Federal Reserve to make the first big changes to overdraft plans in 2010.

All banks now must ask customers to opt in to overdraft protection plans for ATM and most debit card transactions, instead of automatically enrolling them.

The consumer bureau plans to review those opt-in plans, especially the marketing material that promotes them.

The bureau said it will also look at the bank practice of clearing large purchases first. That practice, especially for a bank account close to being overdrawn, often makes it more likely that customers trigger more fees for more smaller purchases.

The bureau will also look at whether consumers know how to avoid overdraft fees and clearly understand the terms of the fees.

Finally, the probe will cover why overdraft fees hit so many low-income and younger customers. The 2008 FDIC study found that 46.4% of young-adult bank customers were hit with overdraft fees, and of those, 15% recorded more than 10 overdrafts in one year.