Bailout

NEW YORK -- Stocks gained in early trading Tuesday after European leaders agreed on bailout terms for Spain's troubled banking system. The Dow Jones industrial average gained 43 points, or 0.3%, to 12,779 shortly after the opening bell. The Standard and Poor's 500 index rose 7 points, or 0.5%, to 1,359. The Nasdaq was up 8 points, or 0.3%, to 2,939. Major European stock indexes were up about 1% or more. Spain's costs of borrowing eased, meanwhile. The country's 10-year bond yield slid to about 6.7%, down from about 7% Monday.

ATHENS -- Despite sweeping public discord, Cyprus lawmakers on Tuesday approved a controversial $13-billion bailout imposed by international lenders to keep the island financially afloat, and its economy anchored to Europe's single currency. With just a two-vote majority, though, the deal survived by a thread, eking out 29 votes in favor as calls for Cyprus' exit from the euro currency zone mounted in the heated parliamentary debate. In a roll call vote, capping an all-day, marathon session, 27 lawmakers in the 56-seat parliament voted against the deal, which combined with contributions from Cypriots totals nearly $30 billion, paving the way for the cash-strapped island republic to receive its first installment of aid next month.

Detroit native Mitt Romney has long contended that the U.S. automobile industry would be better off had the federal government not bailed out General Motors and Chrysler. In particular, he argued in 2008 and again in February (while campaigning in Michigan's Republican primary) that the companies should have restructured themselves without the feds' involvement through a "managed bankruptcy" process. But that ignores a crucial fact: Companies that are broke require money to keep operating, even while under the protection of a Bankruptcy Court.

ATHENS - With a critical monitoring mission completed, international debt inspectors gave Greece the nod Monday for an additional $13 billion in rescue aid but insisted that it had to ax thousands of civil servants as part of efforts to slash the country's bloated - and costly - public sector. Lenders from Europe and the International Monetary Fund have pressed successive Greek governments to implement mass layoffs since Athens signed up for its first bailout, worth $150 billion, three years ago. Despite widespread opposition, Greece's three-party coalition agreed to the plan over the weekend, bowing to the tough new terms contained in a new multibillion-dollar bailout hammered out in December.

Re "America's muscle: Detroit steel," Opinion, Nov. 23 Every time the bill comes to renew my subscription to The Times, I wonder if this is the time to cancel -- then I come across an article such as Ellen Slezak's, and I renew. The story she tells reminds us of the importance of the auto industry to families across America and the decent future for them that the bailout will help ensure. I support the bailout, although I feel it must come with new ideas. For example, the bailout should subsidize buying up American-made SUVs and replacing them with high-gas-mileage, low-pollution station wagons -- possibly hybrids.

ATHENS -- Racing against time and short on choices, Cyprus on Friday moved to vote on yet another bailout formula its government cobbled together to secure a $13-billion international lifeline that will keep its weak banks afloat and avert a devastating default. Failure to produce a viable bailout scheme by Monday will force the European Central Bank, according to an ultimatum it issued earlier this week, to stop funneling billions of dollars into Cyprus' cash-strapped financial system, leaving the island nation to fend for itself.

Re "U.S. rescues giant Citigroup," Nov. 24 Your article underscores the need for the federal government to tighten the strings on each bailout it proposes and hold all executives accountable for their bad decisions. Citigroup's collapse was caused by the big boys who speculated with risky but potentially profitable maneuvers. As a condition for the company to continue on, these sharpies need to go -- just as the dunderheads in the auto industry must also be purged. The new Obama administration must ensure that the hundreds of billions of dollars of taxpayer risk are not squandered further by greedy and incompetent management.

President Bush announced his intention last week to reach out a hand to the "many Americans" who "may have been misled" in the sub-prime mortgage market. Two days earlier, presidential hopeful Barack Obama called for fining "predatory lenders" to bail out "hoodwinked" families. L.A. City Councilman Richard Alarcon wants a $5-million revolving fund to "help homeowners on the verge of foreclosure."

As banks opened their doors Thursday for the first time in nearly two weeks in Cyprus, the odyssey over the nation's financial crisis and ensuing bailout took its newest turn. If you haven't followed the economic drama in this Mediterranean island, here's a recap of how Cyprus came to preoccupy the Eurozone. June 25, 2012: Cyprus seeks a bailou t after suffering heavy losses. Its banking sector was hit by the economic crisis in Greece; Cypriot banks had made loans to Greek borrowers that were worth 160% of the island's gross domestic product, according to the International Monetary Fund . Nov. 23: The European Union reports progress toward a deal with Cyprus.

TAMPA, Fla. - As Mitt Romney released more misleading claims about President Obama and the auto bailout on Tuesday, officials at GM and Chrysler weighed in and said the statements put forward by Romney about job losses and the offshoring of jobs were false - an unusual move for corporations, which tend to avoid entering the fray of partisan politics. Romney released a new radio ad in Ohio that continued to imply that Chrysler, the parent company of Jeep, had outsourced production to China, and in a new accusation, claimed that GM was moving 15,000 American jobs to China.

WASHINGTON - The Federal Housing Administration helped stabilize the real estate market after the subprime bubble and lay the groundwork for the recovery - and now the bill for taxpayers might be coming due. The Obama administration's proposed budget released Wednesday projected that the agency, which insures more than $1 trillion in mortgages, would need a $943-million bailout this year to stabilize its shaky long-term finances. It would be the first time the FHA, which is financed by the premiums it charges homeowners, has needed taxpayer funds in its 79-year history.

WASHINGTON -- The Obama administration's proposed budget projects the  Federal Housing Administration will need a $943-million bailout this year to stabilize its shaky long-term finances. The agency, whose mortgage insurance business increased dramatically during the Great Recession, is supposed to fund itself from premiums it charges homeowners. It has never received taxpayer funds in its 79-year history. But the agency reported in November that reserves to cover losses on some of the more than $1 trillion in mortgages it insures had dropped into negative territory for the year that ended Sept.

WASHINGTON -- Bailed-out Fannie Mae on Tuesday reported a record $17.2 billion profit for 2012, driven by the housing-market recovery and a big settlement with Bank of America related to soured mortgages during the subprime boom. The housing finance giant, now owned by taxpayers after it was rescued in 2008 along with sibling firm Freddie Mac, posted a loss of $16.9 billion in 2011. “Our financial results improved significantly in 2012 and we expect our earnings to remain strong over the next few years,” said Fannie Mae Chief Executive Timothy J. Mayopoulos.

WASHINGTON - Taxpayer-owned Fannie Mae and Freddie Mac are back in the black, but it's unlikely to keep the nation's housing finance giants from being dismantled. Boosted by the recovery in the housing market, Fannie Mae on Tuesday reported a record annual profit of $17.2 billion for last year, a sharp turnaround from a $16.9-billion loss in 2011. In February, Freddie Mac reported net income of $11 billion, compared with a loss of $5.3 billion the previous year. Their first annual profits in six years also have helped the companies reduce the balance of the combined $187.5 billion they received in a government rescue in 2008 when they hovered near bankruptcy amid the crash in the subprime housing market.

ATHENS - Despite widespread fear of panic and protests, Cyprus' cash-starved banks reopened Thursday, allowing customers to access their accounts under stiff regulations mandated by a harsh bailout plan that has raised questions about Europe's latest approach to financial-crisis management. Officials' anxiety proved unfounded, however, as not a single incident was reported throughout the day. Cypriots had been locked out of their accounts for nearly two weeks as the conservative-led government negotiated a controversial bailout scheme that secured a $20.5-billion international lifeline for the tiny Mediterranean island in exchange for a surprise swoop on bank accounts to cover for about a third of the rescue package.

As banks opened their doors Thursday for the first time in nearly two weeks in Cyprus, the odyssey over the nation's financial crisis and ensuing bailout took its newest turn. If you haven't followed the economic drama in this Mediterranean island, here's a recap of how Cyprus came to preoccupy the Eurozone. June 25, 2012: Cyprus seeks a bailou t after suffering heavy losses. Its banking sector was hit by the economic crisis in Greece; Cypriot banks had made loans to Greek borrowers that were worth 160% of the island's gross domestic product, according to the International Monetary Fund . Nov. 23: The European Union reports progress toward a deal with Cyprus.

On the same day that General Motors reported record profits, Mitt Romney stumped in Michigan, reiterating his opposition to the federal government bailout that many credit with saving GM and Chrysler. Romney told the Detroit News' editorial board Thursday that rather than the federal government lending the two companies $80 billion, GM and Chrysler should have entered bankruptcy six months earlier and the federal government should have offered loan guarantees. "I would have never allowed the auto industry to disappear," Romney told the paper.

ATHENS -- Defending a last-resort deal with international lenders, bleary-eyed officials on Cyprus said Monday that they had managed to avert a devastating default for the tiny Mediterranean nation and kept it from being forced out of Europe's single-currency family. Cypriots, though, woke up wondering whether the situation they faced this week was more troubling than the mess they confronted the week before. As the fifth country in the troubled Eurozone to take a bailout, Cyprus put an end to a week of high-stakes negotiations when its president, Nicos Anastasiades, agreed to share the cost of a $20.5-billion rescue package by taxing bank stake holders.

ATHENS -- Racing against time and short on choices, Cyprus on Friday moved to vote on yet another bailout formula its government cobbled together to secure a $13-billion international lifeline that will keep its weak banks afloat and avert a devastating default. Failure to produce a viable bailout scheme by Monday will force the European Central Bank, according to an ultimatum it issued earlier this week, to stop funneling billions of dollars into Cyprus' cash-strapped financial system, leaving the island nation to fend for itself.