Citigroup agreed to pay $7 billion to settle charges that it packaged bad mortgages during the run-up to the financial crisis.
It includes $4 billion in penalties, $2.5 billion in mortgage modifications and other relief to homeowners, and $500 million going to five states and the Federal Deposit Insurance Corp.
The settlement means Citi will be able to avoid a civil suit by the Justice Department and mirrors similar agreements with JPMorgan Chase (JPM) and other lenders in recent years.
While Citi took a $3.8 billion hit because of the deal, which essentially wiped out its earnings for the quarter, it can afford it. Last year, the bank earned $14 billion and had $35 billion of cash on its balance sheet as of June 30.
The conflict in Iraq is hurting every American already- oil prices rising about 4% this week to a 9-month high.
Iraq has some of the largest oil reserves in the world, and it has actually been pumping out quite a bit of it lately
According to the International Energy Agency, Iraq produced about 3.37 million barrels of oil per day last month. It's not far off from the country's record highs set back in 1979.
Joining us tonight with more on how the Iraqi crisis could hit your wallet is Dan Dicker, an oil trader and president of MercBloc.
President Obama is taking on Wall Street again.
After sending his 2015 fiscal year budget to Congress, President Obama said he planned to close tax loopholes benefiting the rich.
"Closing tax loopholes that, right now, only benefit the well-off and well-connected," Obama said.
Obama has often called on Congress to close tax loopholes including the carried interest loophole, which he promised to close during his first campaign.
The idea of closing this loophole has appeared in President Obama's budgets over and over, but it never makes it to the final draft.
Erin Burnett thinks the carried interest loophole is "one of the most ridiculous tax loopholes in America."
It has netted billions of dollars for a very select few Americans.
It's the loophole that gives loopholes a bad name, and makes arguments of special treatment hold up.
Burnett explains how it works:
OutFront: Democratic Congressman Brad Sherman - he sits on the House Financial Services Committee. He is also a Certified Public Accountant.
World financial markets fell sharply as the crisis in Ukraine escalated.
The Dow Jones Industrial Average dropped 153 points, oil prices spiked by nearly $2 a barrel and the ruble plunged.
The already weak Russian currency fell as much as 3% versus the U.S. dollar before posting a small recovery. Joining us tonight to talk about why the markets are tumbling is Peter Costa, President of Empire Executions.
The GOP is taking on wall street.
Republicans want to close one of the most ridiculous tax loopholes in America known as "carried interest."
As part of a major tax code overhaul, Republican House Ways and Means Chairman Dave Camp said Wednesday he will close a loophole that has netted the top Americans billions of dollars.
According to the Joint Committee on Taxation, they would pay billions of dollars over the next decade if the loophole was closed.
At a time when every dollar counts, some would there'd be celebration on Capitol Hill.
But Republicans and Democrats have been afraid of challenging these business titans and their lobbyists.
House Speaker John Boehner was asked about carried interest on the Hill today. His response? "Blah, blah, blah," before going on to say the plan is "the beginning of [a] conversation" lawmakers need to have about tax reform.
President Obama is also guilty of caving to lobbyist pressure. He promised to close the loophole in 2007, and it's still wide open.
The loophole allows these people to pay half the taxes they would otherwise. They currently pay a tax rate of 20%, but their regular income tax rate would top out around 35% under Camp's plan.
Some loopholes make sense. Camp's plan has a few supporters, but not many.
Erin Burnett explains why:
When you're a partner in a private equity firm, you get a cut of the profits you make from investing other people's money. Usually, it's a 20 percent cut.
If you invest money with one of these men and your investment goes up in value, they get to keep a cut of the profits. Now, it's your money that was put at risk. While you get to pay the lower capital gains rate of 20% so do the guys, who simply manage your money. And their cut of the profits is a huge part of the money they earn.
Both parties get to pay the lower rate provided to Americans to encourage people to take risk - except it's not their money and it's not their risk.
They get to pay 20% on what is essentially their wages. Everyone else's wages are taxed at an ordinary income tax rate.
Burnett asks Michael Farr, Author of "Restoring Our American Dream: The Best Investment," whether he thinks the tax reform will actually happen.
"What I'm hearing from my friend Greg Valliere at Potomac research is that the Republicans don't want to touch much of this a minute before they have to and certainly not before the mid-term election," says Farr. "I think something could happen but I think it's going to take a while."