Financial Watch

President Barack Obama’s plan to tax financial institutions to recoup funds spent during the government’s bailout of financial firms received tepid enthusiasm from the top tax writer in the U.S. Senate.

Senator Max Baucus, the conservative-leaning Democrat who heads the Senate Finance Committee said on Tuesday he will hold a series of hearings to examine the plan.

But he also said good news on the government’s recouping of its bailout investments may cast doubt on the need for the funds Obama wants to raise.

“We need to learn whether banks will pass it on to consumers, and how it might affect lending to small businesses,” Baucus said.

President Barack Obama will push for his plan to tighten Wall Street regulations in New York on Thursday, the White House said on Monday, as he attempts to overcome solid Republican opposition.

The battle over a financial regulatory overhaul represented a new election-year fault line in Washington after the bruising healthcare debate, and poses a new challenge for Obama as he seeks to gain passage of one of his key domestic priorities.

Democrats have seized on a fraud suit against Goldman Sachs as an example of why Wall Street needs to be cleaned up after a financial crisis that triggered the worst U.S. recession since the Great Depression.

“The battle over reshaping the country’s financial regulation escalated on several fronts Wednesday, with President Obama stepping up his personal efforts to win Senate passage of an ambitious bill while senators from both parties fought to claim the anti-Wall Street mantle. After a White House meeting between Obama and congressional leaders, Republican leaders criticized the Democrats’ proposal for leaving the door open to future bailouts of big financial firms. But the president, who has turned his attention to the financial overhaul after winning passage of health-care legislation, said he was confident that a bipartisan bill could be worked out to ensure that the economy is protected from the collapse of large financial companies.”

A U.S. stock rally evaporated abruptly yesterday as a strengthening dollar sapped gains in commodities and related shares, largely overtaking bullish sentiment that came with upbeat results in retail and technology sectors.

“The volume is light enough that swings can be pretty dramatic even in the last half hour, where we saw the dumping of lots of energy and material names,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.

The Obama mortgage debt relief plan was designed to help homeowners stay in their homes and avoid foreclosure. If you have had difficulty making your monthly mortgage payment then you should consider going through a mortgage refinance to lower your interest rate. Another option is going through home loan modification.

If you have a good credit score, above 740, and a significant amount of equity in your home then there is a good chance that you can refinance to a lower interest rate in the current economic environment. Please be aware of the fact that mortgage rates are likely to move up in the near future so you will want to take action soon.

Federal Reserve Chairman Ben Bernanke Thursday said record-low interest rates are still needed to support the U.S. economy, but the central bank has to be ready to tighten credit to prevent inflation.