Change in order to survive, survive in order to change – Change is coming

Change is indeed coming – and not just the change of command taking place in front of the nation’s Capitol today.

Companies like AIG must change in order to survive and survive in order to change.  The company’s survival got a boost when the recent “Miracle on the Hudson” called positive attention to AIG’s aircraft leasing unit.

Carlyle Group, Kohlberg Kravis Roberts & Co., TPG Inc. and Greenbriar Equity Group LLC are bidding for American International Group Inc.’s plane-leasing business, according to people familiar with the situation.

The firms may eventually take part in a group to buy Los Angeles-based International Lease Finance Corp., said the people, who declined to be identified because the offers aren’t public. Steven Udvar-Hazy, ILFC’s founder and chief executive officer, said in November he may join with investors in a buyout of the unit, which he suggested was worth about $10 billion.

The way Treasury deals with banks is going to change.  After Congress required that commitment to release the balance of bail-out funds; but, the Obama administration was waiting for the change of power with plans for change in mind.

Top advisers to President-elect Barack Obama signaled they will emphasize getting credit to consumers and businesses rather than helping banks as the new administration deploys the second half of the $700 billion rescue fund.

“The focus isn’t going to be on the needs of banks; it’s going to be on the needs of the economy for credit,” Lawrence Summers, the president-elect’s top economic adviser, said on CBS’s “Face the Nation” program yesterday. Obama’s team will manage the Troubled Asset Relief Program “in a much different way,” David Axelrod, Obama’s chief political adviser, said on ABC’s “This Week” program.

Obama’s advisers are considering options for dealing with troubled assets still clogging banks’ balance sheets, according to people familiar with the matter.

Neil Kashkari, the Treasury official in charge of the TARP whose name suggest the policy that’s going to change – “” and “carry” – didn’t wait for the change of administration.  Bloomberg reports Kashkari jumped in and started the ball rolling.

The U.S. Treasury, under pressure to revive lending, is demanding monthly reports from the banks that received the most capital from the government’s $700 billion rescue program.

Neel Kashkari, the official who administers the Troubled Asset Relief Program, wrote to Citigroup Inc., Bank of America Corp. and 18 others on Jan. 16 seeking figures on business and consumer loans. Treasury also wanted details on purchases of mortgage-backed and asset-backed securities, according to documents obtained by Bloomberg News. Kashkari will stay for a few months after President-elect Barack Obama is sworn in today.

Obama’s advisers are considering options for dealing with troubled assets still clogging banks’ balance sheets, according to people familiar with the matter. Among alternatives: setting up a government-backed “bad” or “aggregator” bank to hold the securities, or leaving the assets on banks’ books and providing a government guarantee.

The idea of a bad bank evoked comment from Jeffrey Lacker, President of the Richmond Federal Reserve Bank.

Richmond Federal Reserve Bank President Jeffrey Lacker said moving lenders’ tainted assets into a government bank is a “compelling” idea that could revive private investment in the U.S. banking system.

“As long as you have some material risk that remains on the banks’ books, any new equity investor is going to be subsidizing existing debt holders,” Lacker told reporters today after a speech in Richmond. “That is going to pose an impediment to raising new equity and recapitalizing the banking system from the private sector.”

The heads of the U.S. Treasury and Federal Deposit Insurance Corp. provided new momentum today to an idea of reviving lending by creating a government-backed bank to “aggregate” troubled assets now on the balance sheets of U.S. financial institutions.

In light of recent comment on the blog about the possible impact of the leadership change on the judicial system, the headline Obama Presidency Could Drammatically Change Courts caught my eye – but the interesting report doesn’t suggest the what the title and comment here had me expecting.

When Barack Obama becomes president, not only will the political landscape shift in this country, but the judicial landscape will as well. Empirical research from Vanderbilt professor of law and political science Tracey George shows how the United States court system, especially the Supreme Court and the Court of Appeals, could dramatically change soon after Obama takes office.

George said there is likelihood that as many as three Supreme Court justices could leave the court while Obama is in office. Those justices are most likely to be John Paul Stevens, Ruth Bader Ginsburg and David Souter.

“If a justice is considering stepping down, it tends to happen when the party of the president that nominated that justice is in power,” said George…

The real power may lie in the lower courts. George’s research found that more than 30,000 cases were decided on the merits by courts of appeals last term as compared to fewer than 80 in the Supreme Court.

“In a real sense, the circuit courts are the court of last resort for most claims and parties,” said George.

There are currently 13 vacancies on the courts of appeals (8 percent of the 167 active judgeships) and an additional 41 vacancies on the district courts (about 6 percent.) While George W. Bush came into office with even more openings to fill (26 court of appeals and 54 district court vacancies), George said the number of openings may quickly rise because the change in party in power may prompt Clinton and Carter appointees to step down soon to ensure a like-minded replacement.

George said the Democratic Congress may increase the number of federal judges, which it has not done in two decades despite repeated pleas from the federal judiciary.

One last mention of change that’s coming – after tonight those who have survived the suspense will know what Michelle Obama wore to the Ball and the name of the individual New York Governor Patterson appoints to fill Senator Clinton’s seat.

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