Geithner estimates cost of bailout at $87 billion

Treasury Secretary Timothy Geithner is telling Congress that the administration believes the final cost of the government’s heavily criticized financial bailout effort could be as low as $87 billion.

Geithner made the new estimate in a letter Friday to congressional leaders that was obtained by The Associated Press.

A year ago, officials were estimating the bailout could cost as much as $500 billion.

The new estimate said the biggest losses will occur from the government’s support of mortgage companies Fannie Mae and Freddie Mac. That loss was put at $85 billion followed by a loss of $49 billion from providing help to homeowners facing foreclosures.

Treasury estimates the cost of Fannie and Freddie’s rescue will rise to $188 billion, but that amount will be offset by dividends paid by the two mortgage giants over 10 years and returns on mortgage-backed securities purchased by the government. With those two sources of income taken into account, the net cost is expected to be $85 billion.


SEC watchdog will probe timing of Goldman charges

The Securities and Exchange Commission’s internal watchdog said Friday he is heeding Republican calls to investigate the timing of the charges against Goldman Sachs.

SEC Inspector General David Kotz said he needs to understand what led to the SEC’s decision to announce the case when it did and “see if there was any undue influence involved.”

He was responding to a letter from Republican members on the House Committee on Oversight and Government Reform that suggests SEC employees might have leaked information to influence debate in Congress on financial regulation.

The lawmakers question the timing of disclosures about the agency’s actions and suggest officials may have disclosed their plans before they became public.

An SEC spokesman denied that there was anything improper about the charges.


Xerox posts its first quarter of growth in more than year

Xerox Corp. posted its first quarter of revenue growth in more than a year on Friday, boosted by its foray into the services business and an upswing in corporate spending on printer and copier supplies.

The company also offered a second-quarter earnings forecast that topped Wall Street expectations.

Its stock rose 87 cents, or 8.3 percent, Friday to close at $11.32 after hitting a new 52-week high of $11.72.

The results came about 10 weeks after Xerox closed its $6.4 billion acquisition Affiliated Computer Services Inc.

Xerox posted a loss of $42 million, or 4 cents per share, for the first three months of the year, compared with a profit of $42 million, or 5 cents per share, a year earlier. Earnings were dragged down in the most recent quarter by one-time expenses related to layoffs and its acquisition.

Excluding one-time costs, however, Xerox said it earned 18 cents per share, beating the average forecast from analysts of 13 cents per share, according to Thomson Reuters.


GM phasing ad agency out of Chevrolet account

General Motors has replaced the advertising agency behind such memorable campaigns as “See the USA in Your Chevrolet” and “Like a Rock” after 90 years of work.

Campbell-Ewald, based in the Detroit suburb of Warren, will be phased out of the Chevrolet account during the next few months, replaced by Publicis Worldwide, which is part of French advertising company Publicis Groupe SA.

GM spokeswoman Cristianna Vazquez would not give a reason for the move, but GM executives in recent months have stated publicly that they were unhappy with the company’s advertising and marketing.

Campbell-Ewald Chairman and CEO Bill Ludwig said he was told of the decision Friday morning by Chevrolet’s marketing head.

The agency, which has had Chevrolet business since 1919 and at times has had all of GM’s advertising, also did Chevrolet’s “Heartbeat of America” campaign.


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.