Congressional investigators say they have seen internal documents that prove the Federal Reserve threatened to force the ouster of Bank of America CEO Kenneth Lewis if he didn't follow through with plans to buy Merrill Lynch & Co.
None of the documents reviewed by staff, however, showed that the government explicitly instructed Bank of America to hide Merrill Lynch's losses from shareholders.
California's government risks a financial "meltdown" within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state's controller said on Wednesday.
Underscoring the severity of California's cash crisis, Controller John Chiang, who has previously warned the state's government risks running out of cash without a budget deal, said revenues in May fell by $1.14 billon, or 17.7 percent, from a year earlier.
The slumping US economy is showing only spotty signs of recovery, with overall conditions still weak, the Federal Reserve said in its Beige Book report Wednesday.
The central bank said reports from its 12 districts from mid-April through May "indicate that economic conditions remained weak or deteriorated further during the period."
Echoing a comment from its April Beige Book, the Fed said that "five of the districts noted that the downward trend is showing signs of moderating."
Chrysler may have been granted a fresh start, but it still faces old problems: how to sell enough cars and realign its fleet away from the trucks and SUVs consumers seem to no longer want or be able to afford.
A 42-day stay in bankruptcy court cleansed the company of much of its debt and labor costs, but many analysts say Chrysler's immediate future is bleak. It lost $8 billion in 2008, and sales are down by almost half for the first five months of this year.
An 88-year-old gunman with a violent and virulently anti-Semitic past opened fire with a rifle inside the crowded U.S. Holocaust Memorial Museum on Wednesday, fatally wounding a security guard before being shot himself by other officers, authorities said.
The assailant was hospitalized in critical condition, leaving behind a sprawling investigation by federal and local law enforcement and expressions of shock from the Israeli government and a prominent Muslim organization.
Pentagon employees have received millions of dollars in free travel and lodging from foreign countries, trade groups and companies with an interest in shaping policies or doing business with the U.S. military.
Defense officials say the arrangement is legal, saves taxpayers money and is carefully monitored to ensure there are no conflicts of interest. But government watchdogs say it allows donors to subtly exert influence for a small investment compared with the potential gain.
An up and coming Wall Street executive might want to hold off on buying that condo in Aspen. The Obama administration is ready to issue broad new guidelines that would rein in pay at financial institutions.
Eager to remove incentives that they say contributed to last year's financial crisis, President Barack Obama's economic team plans to unfurl broad executive pay principles, possibly as early as Wednesday, that put a premium on long-term performance over short-term gain.
Chrysler was a step closer to emerging from bankruptcy protection Wednesday, a day after opponents of the automaker's planned partnership with Italy's Fiat exhausted their appeals in an effort to halt the Obama administration-backed sale.
Late on Tuesday, the Supreme Court cleared the way for the sale of the bulk of Chrysler LLC's assets to Fiat Group SpA, rejecting an appeal by a trio of Indiana pension and construction funds, consumer groups and others to block the transaction.
Ten big US banks got approval Tuesday to repay 68 billion dollars in capital from the Treasury, in the latest sign the ailing financial sector is standing on its own without government aid.
President Barack Obama welcomed the news but warned that the troubles of the sector were far from over.
Obama said that "it is worth noting that in the first round of repayments from these companies, the government has actually turned a profit."
But the president warned "this is not a sign that our troubles are over -- far from it."
U.S. authorities have brought the first Guantanamo Bay detainee to the United States, flying him into New York to face trial for bombing U.S. embassies, the Justice Department said Tuesday.
The department said Ahmed Ghailani arrived in the early morning hours Tuesday. U.S. Marshals took custody of Ghailani from his military jailers and brought him to the Metropolitan Correctional Center in Manhattan. Ghailani is scheduled to appear in Manhattan federal court later Tuesday.