China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People’s Bank of China buys U.S. debt using a different method than any other central bank in the world.

The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn’t been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People’s Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

CONTINUED at Reuters.

Facebook shares fell more than 13 percent, falling below its $38 price of itsinitial public offering, in the social network’s second day of trading as a public company.

Meanwhile, the NASDAQ exchange continued to defend itself regarding the IPO’s delay on Friday.

The company’s shares [FB  34.03    -4.2018  (-10.99%)   ] last traded down more than 13 percent. The stock had previously closed 0.6 percent higher on Friday.

Investors and technology industry watchers are closely tracking the Menlo Park, Calif., company’s shares. The world’s largest social network was one of the most anticipated initial public stock offerings ever, and now serves as a bellwether for other social media companies.

Facebook’s market debut Friday suffered some hiccups, with trading on the Nasdaq delayed for a half hour and issues with traders’ orders. The stock closed Friday just 23 cents above where it priced Thursday night, when many investors had hoped for a big first-day pop.

Facebook shares fell below the offer price Monday before the market’s open. It was unclear at that time whether underwriters such as Morgan Stanley [MS 13.25    -0.10  (-0.75%)   ] would step in to help stabilize the stock.

Facebook Inc. (FB) is set to start trading today after a record initial public offering that made the social network more costly than almost every company in the Standard & Poor’s 500 Index. (SPX)

Facebook sold 421.2 million shares at $38 each to raise $16 billion, a statement yesterday shows. That values the Menlo Park, California-based company at $104.2 billion, or 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential.

CONTINUED at Bloomberg.

Mitt Romney continued to drive a debt-oriented message here on Wednesday morning, extending his “prairie fire” of debt metaphor with the assistance of a prop.

In a nod to the independent voters who pushed the Sunshine State into the Democratic column in 2008, Romney noted that both parties were responsible for pushing the debt to the “incomprehensible” levels – which were represented on a giant prop debt clock behind him.

CONTINUED at MSNBC.

Spain tumbled into recession and European stock markets and the euro fell Thursday as Greece installed a crisis government to tackle its crippling debt, EU leaders prepared for talks and analysts raised the spectre of a run on eurozone banks.

“Markets are worried about eurozone bank deposit runs and an escalating banking crisis,” London-based VTB Capital economist Neil MacKinnon told AFP.

Heavy withdrawals of deposits have been reported in Greece and Spain, and top European Union leaders were to hold a videoconference.

They were initially to discuss an upcoming G8 meeting of industrialised countries but were now faced with a serious deterioration of the situations in Greece and elsewhere across the eurozone.

A caretaker government took office in Athens on Thursday to organise its second election in six weeks after an inconclusive May 6 vote as fears over its possible euro exit rocked Spain and Italy.

The election left Greece in limbo and the new poll on June 17 offers no guarantee of a viable government able to implement an EU-IMF bailout which has divided the country.

The International Monetary Fund announced Thursday that it would hold off on official contacts with Greece until after the June 17 elections.

CONTINUED at Yahoo News.

The federal government paid at least $439 million in employee bonuses last year, down $43 million since new austerity restrictions were announced.

The largest merit awards went to senior executives in Washington and air traffic controllers, an Asbury Park Press investigation found. The highest award, $62,895, went to 16 employees from agriculture to NASA.

The $439 million in bonuses may be a staggering amount — enough to buy the former New Jersey Nets, valued at about $357 million by Forbes magazine — but it represents just 0.4 percent of the $105 billion in salaries for most of the government’s civilian employees. In 2010, at least $482 million was paid in bonuses, according to federal data.

CONTINUED at the Asbury Park Press.

STORY 1: Obama worth as much as $10 million

Three things are apparent from President Obama’s annual financial disclosure statement, released today:

He is a wealthy man, with assets of as much as $10 million.

He has a hefty stake in JPMorgan Chase, the megabank that just made a bad $2 billion bet. Obama has an account worth between $500,000 and $1 million.

Despite the nation’s $15.6 trillion debt, he is a believer in government paper. More than half of his assets are in Treasury bills and notes.

The disclosure statement lists assets and liabilities in dollar ranges, so pinpointing the president’s net worth is difficult. His assets appear to tally between $2.6 million and $9.9 million. He holds a mortgage on his Chicago home of $500,000 to $1 million.

As was clear from Obama’s income tax filing, much of his income continues to roll in from book royalties. The disclosure form lists $100,000 to $1 million in royalties from Dreams From My Father, $100,000 to $1 million from Of Thee I Sing: A Letter to My Daughters, and $50,000 to $100,000 from The Audacity of Hope.

Vice President Biden, on the other hand, isn’t all that wealthy. His financial disclosure statement includes less than $1 million in assets — and as much as $1.5 million in liabilities, including between $500,000 and $1 million on his Wilmington home.

Source: USA Today.

STORY 2: Obama has up to $1 million with JPMorgan Chase

US President Barack Obama has up to $1 million in a JPMorgan Chase checking account, the White House said Tuesday as a controversy deepened over the bank’s $2 billion dollar losses.

Public figures in the United States are required by law to publish their assets and investments to avoid conflicts of interest, and the White House releases disclosures for Obama and Vice President Joe Biden each year.

As well as the between $500,000 and $1 million in the JPMorgan Chase Private Client Asset Management checking account, Obama also has millions of dollars in a variety of other accounts and funds, bonds and treasuries.

The largest holding, according to the disclosures, is between one and five million dollars in US Treasury notes.

Most of Obama’s wealth comes from book royalties, including from his best selling autobiography “Dreams From My Father.”

Obama said during a television interview with ABC’s “The View” broadcast Tuesday that the $2 billion in derivatives losses suffered by JPMorgan proved the need for tighter banking regulation.

He also said that JPMorgan chief Jamie Dimon was “one of the smartest bankers we got and they still lost money.”

“They still lost $2 billion dollars and counting precisely because they were making bets in these derivative markets. This is why we passed Wall Street reform.”

The US Justice Department has opened an FBI probe into JPMorgan Chase’s more than $2 billion trading loss, a person familiar with the matter told AFP Tuesday.

News of the investigation came as Dimon, JPMorgan’s embattled chief executive, faced criticism at the company’s annual shareholders meeting in Tampa, Florida, over the shock loss.

Source: Yahoo News.

Spain took over Bankia, the country’s fourth biggest lender, on Wednesday, trying to dispel concerns over the government’s ability to clean up the financial sector four years after the banks were hit by a property market crash.

In a deal that will give the state a 45 percent indirect stake in Bankia, the government will take control of its parent company BFA by converting into equity a 4.5 billion euro loan it had given the financial group previously, the central bank said.

The economy ministry pledged to do all it takes to clean up Bankia, which has more than 30 billion euros of exposure to troubled loans to property developers and repossessed land and buildings.

The government is expected to lend or give Bankia up to 10 billion euros in additional aid, though some bank analysts say it will need more.

CONTINUED at Reuters.

The United States on Wednesday opened its banking market to ICBC, China’s biggest bank, for the first time clearing a takeover of a US bank by a Chinese state-controlled company.

Just days after high-level US-China economic talks in Beijing, the Federal Reserve approved an application from Industrial and Commercial Bank of China to buy a majority stake in the US subsidiary of Bank of East Asia.

The transaction will make ICBC the first Chinese state-controlled bank to acquire retail bank branches in the United States.

ICBC has been the most aggressive of China’s “big four” banks in expanding overseas.

According to the Fed the bank has total assets of roughly $2.5 trillion.

It will buy up to 80 percent of the US unit of the Hong Kong-based Bank of East Asia, which operates 13 branches in New York and California.

As part of the deal ICBC and two state-backed financial firms — China’s sovereign wealth fund the China Investment Corporation (CIC), and Central Huijin Investment — will be recognized as bank holding companies, regulated as commercial US banks.

The broad expansion of China’s footprint in the US market comes amid a series of financial reforms in China that could begin to open the lucrative market to US firms.

After the May 3-4 meeting, the US Treasury noted China had made “encouraging progress” on a number of issues sought by the Obama administration, including taking steps toward a more open and market-oriented financial system.

The Fed said Wednesday that the ICBC proposed acquisition, which is “relatively small,” would not have much of an impact on the banking market.

“The combined deposits of the relevant institutions in the Metropolitan New York banking market represent less than one percent of market deposits,” the central bank noted.

The competition includes Bank of China branches in the New York metropolitan area, and CIC, which has a noncontrolling stake in Morgan Stanley.

ICBC will pay $140 million to buy an 80 percent interest in Bank of East Asia USA, China’s state news agency Xinhua reported in January 2011, at the time the deal was signed.

“This unprecedented acquisition of a controlling stake in a US commercial bank by a mainland bank is strategically significant,” Xinhua quoted ICBC chairman Jiang Jianqing as saying.

The Fed said its Board also consulted with the China Banking Regulatory Commission, the country’s main banking regulator, and pointed to steady improvement in regulation since its founding in 2003.

“For a number of years, authorities in China have continued to enhance the standards of consolidated supervision to which banks in China are subject, including through additional or refined statutory authority, regulations, and guidance,” it said.

In other Fed board decisions, Bank of China, the third-largest bank, won approval for a branch in Chicago. Bank of China operates two insured federal branches in New York City and an uninsured branch in Los Angeles.

Agricultural Bank of China, the fourth-largest bank, was set to establish a branch in New York City, where it already operates a representative office.

Source: Yahoo News Canada.

President Barack Obama has compiled a handy to-do list for Congress that, “if acted upon quickly, will create jobs and help restore middle class security,” according to the White House’s blog. And it’s about time. This is most certainly not, as cynics might suggest, another transparent political scheme. After all, these initiatives, the White House claims, enjoy bipartisan support—which, I gather, is meant to impress you, even if it’s not exactly true.

Regrettably, the sentiment of the to-do list does garner bipartisan support and illustrates how cheap populism leads to bad policy and why Washington shouldn’t be in the business of “creating jobs” in the first place.

Obama says passing his to-do list would help create “an economy built to last—one that creates the jobs of the future and makes things the rest of the world buys—not one built on outsourcing, loopholes, and risky financial deals.” History tells us that when government “creates” an economy, it won’t be much of an economy to speak of—but here’s the new plan:

“Reward American Jobs, Not Outsourcing.” Hey, let’s play on the genuine frustration of struggling Americans. Most politicians will latch on to this protectionist notion to some extent. But need it really be repeated that outsourcing, by generating more productivity, creates more wealth and more jobs? On this point, most economists actually agree.

CONTINUED at Reason. Written by David Harsanyi.