Financial Headlines 6/10/2009

• In a big head fake, the Supreme Court lifted the one-day stay on Chrysler's proposed sale to Fiat, disappointing those in Indiana that were hoping their pensions wouldn't get nailed by losses on investments in Chrysler's senior secured debt.  The sale can go ahead, and we can all get back to the business of worrying about hiccups in GM's bankruptcy proceedings.
• The Treasury will allow 10 banks to repay $68 billion in Tarp funds.  The banks include JP Morgan, Goldman Sachs, Morgan Stanley, US Bancorp, Capital One, American Express, BB&T, Bank of New York Mellon, State Street, and Northern Trust.  Anyone care to wager which bank will blow out first and go back to begging for more TARP funds?  My money would go on Capital One.  
• The Obama administration is dropping its plan to cap salaries at firms receiving government bailout money, which is good for you if you work at a bank that still has TARP funds.  However, it is leaving the firms subject to congressionally imposed limits on bonuses, which is bad for you if you work at a bank that still has TARP funds.  Instead the administration will push for broader changes in compensation across the industry and appoint that crucial position of Pay Czar that we spoke of the other day.  No doubt banks will work around the restrictions as they don't seem to think they can function if they aren't throwing large sums of money at employees, sometimes for good reason, but often for naught (please see Citigroup's $100 million severance package to 5 employees that left a year ago or Merrill's $50 million signing bonus to Thomas Montag before he ever stepped foot in the building.) 
• The US trade deficit widened to $29.16 billion in April from a revised $28.3 billion in March.  Exports in April fell to $121.11 billion, the lowest level since July 2006.  Imports also fell to $150.28 billion the lowest level since September 2004.  Crude oil imports rose as the price of crude climbed from $41.36 a barrel in March to $46.60 a barrel in April.  Since crude is now sitting at $70 a barrel, it's not looking good for the future of the May and June deficit figures.  The narrowing trade deficit added 2.18% to GDP in the first quarter, despite the 5.7% contraction in the overall economy.  A widening deficit is bound to do the opposite for GDP growth which is not great for all of those enthusiasts looking for that V-shaped recovery in the second half.
• The former head of AT&T was tapped to become Chairman of GM if and when it exits bankruptcy.  What does running a huge telecom firm have in common with selling cars?  Really, I have no idea.  But I certainly hope it doesn't mean that I will have to spend two hours on the phone angrily pushing buttons the next time I want to buy or service a car.