I read an article on Bloomberg.com by Alison Vekshin about a meeting that Sheila Bair, chairman of the FCIC had with President Obama. She is not a proponent of the too big to fail idea.
“The FDIC head isn’t done expanding her influence over Wall Street. An opponent of the “too-big-to-fail” policy for firms like Citigroup Inc., Bair is lobbying Congress to give the FDIC authority to wind down bank and thrift holding companies -- a move she says is necessary to protect taxpayers. And she wants lawmakers to include the agency in a systemic risk council to prevent future financial shocks.”
To read the entire article click here.
To read the entire article click here
Friday, May 29, 2009
Thursday, May 28, 2009
GM reaches swap deal, but bankruptcy still lies ahead
We have all been reading and hearing about GM, you would have to be living under a rock not to. The big question now is will they file bankruptcy or maybe the question should be “when” will they file bankruptcy? Here’s an article that I found on MarketWatch.com that I think you will find interesting…
By Shawn Langlois, MarketWatch
SAN FRANCISCO (MarketWatch) -- General Motors Corp. said Thursday that it reached a new debt-swap deal with bondholders that likely won't save the automaker from imminent bankruptcy but should help speed the process.
Under the terms of the new exchange, bondholders will get 10% equity in the new restructured company with an option to buy 15% more.
"Implementation of this proposal would result in a New GM with a healthy balance sheet, putting the new company on a clear path toward long-term viability and success," GM said in a statement.
The company warned that bondholders could see their entire stake wiped out if they don't approve the deal by a Saturday deadline.
GM shares were initially halted on the news before jumping …
original article
By Shawn Langlois, MarketWatch
SAN FRANCISCO (MarketWatch) -- General Motors Corp. said Thursday that it reached a new debt-swap deal with bondholders that likely won't save the automaker from imminent bankruptcy but should help speed the process.
Under the terms of the new exchange, bondholders will get 10% equity in the new restructured company with an option to buy 15% more.
"Implementation of this proposal would result in a New GM with a healthy balance sheet, putting the new company on a clear path toward long-term viability and success," GM said in a statement.
The company warned that bondholders could see their entire stake wiped out if they don't approve the deal by a Saturday deadline.
GM shares were initially halted on the news before jumping …
original article
Tuesday, May 26, 2009
Job Losses Push Safer Mortgages to Foreclosure
(click image for larger view) Once again Florida is at the top of another, not so positive, list. Florida needs a break. I have read numerous articles over the last 2 years that describe the biggest problem with Florida’s economy has been job losses with the downturn in property values being second.
click here to read the article
Sunday, May 24, 2009
FDIC Insurance Coverage
Extension of Temporary Increase in Standard Maximum Deposit Insurance Amount
President Obama has increased the insurance amount per depositor from $100,000 to $250,000. Can we afford that? Seems to me that the FDIC is taking quite a beating already. The increase is in effect until the end of 2013. Here’s the summary:
Summary:
On May 20, 2009, President Barack Obama signed the Helping Families Save Their Homes Act, which extends the temporary increase in the standard maximum deposit insurance amount (SMDIA) to $250,000 per depositor through December 31, 2013. This extension of the temporary $250,000 coverage limit became effective immediately upon the President's signature. The legislation provides that the SMDIA will return to $100,000 on January 1, 2014.
Read more
President Obama has increased the insurance amount per depositor from $100,000 to $250,000. Can we afford that? Seems to me that the FDIC is taking quite a beating already. The increase is in effect until the end of 2013. Here’s the summary:
Summary:
On May 20, 2009, President Barack Obama signed the Helping Families Save Their Homes Act, which extends the temporary increase in the standard maximum deposit insurance amount (SMDIA) to $250,000 per depositor through December 31, 2013. This extension of the temporary $250,000 coverage limit became effective immediately upon the President's signature. The legislation provides that the SMDIA will return to $100,000 on January 1, 2014.
Read more
Monday, May 18, 2009
Fed Up
Commentary
Ron Paul, 05.15.09, 07:10 PM EDT
Audit the Federal Reserve.
found at forbes.com
The Federal Reserve's recent and unprecedented actions in the realm of monetary policy have provoked a backlash among the American people. Trillions of dollars worth of loans and guarantees have been provided to Wall Street firms, while Main Street Americans suffocate under harsh taxation, the prospect of higher debt levels and increasing inflation. These events have awakened many Americans to problems with the Fed's loose monetary policy, the bubbles it has created in the past and the potential hyperinflation it might cause in the future.
One of the fallacies of modern economics is the idea that a central bank is required in order to keep inflation low and promote economic growth. In reality, it is the central bank's monetary policy that causes inflation and depresses economic growth. Inflation is an increase in the supply of money, which in our day and age is directly caused or initiated by central banks. All other things being equal, inflation results in a rise in prices. A so-called "mild" rate of inflation of 3% per year leads to a 56% rise in prices over a 15-year period. Even a "low" rate of inflation of 2% per year leads to a 35% rise over that same period. How is that conducive to long-term growth?
Read more...
Ron Paul, 05.15.09, 07:10 PM EDT
Audit the Federal Reserve.
found at forbes.com
The Federal Reserve's recent and unprecedented actions in the realm of monetary policy have provoked a backlash among the American people. Trillions of dollars worth of loans and guarantees have been provided to Wall Street firms, while Main Street Americans suffocate under harsh taxation, the prospect of higher debt levels and increasing inflation. These events have awakened many Americans to problems with the Fed's loose monetary policy, the bubbles it has created in the past and the potential hyperinflation it might cause in the future.
One of the fallacies of modern economics is the idea that a central bank is required in order to keep inflation low and promote economic growth. In reality, it is the central bank's monetary policy that causes inflation and depresses economic growth. Inflation is an increase in the supply of money, which in our day and age is directly caused or initiated by central banks. All other things being equal, inflation results in a rise in prices. A so-called "mild" rate of inflation of 3% per year leads to a 56% rise in prices over a 15-year period. Even a "low" rate of inflation of 2% per year leads to a 35% rise over that same period. How is that conducive to long-term growth?
Read more...
Friday, May 15, 2009
A Bank Is Survived by Its Loans
In a mortgage market gone crazy with generous loans, no one was more generous than World Savings.
Lots of banks offered mortgages that allowed borrowers to pay less than the amount of interest being charged, but World was virtually alone in making loans that let the borrower continue to make small payments for a decade, rather than two or three years.
Most banks forced the borrower to start making much larger monthly payments if the amount owed — an amount that could rise each month if the borrower made the minimum payment — rose to 110 percent of the appraised value of the home when the loan was made. World saw that as stingy. It did not force the payments up until the amount owed was 25 percent greater than the original value.
You can’t get loans like that any more, of course. But World’s old mortgage loans live on. Other banks, where escalating monthly payments are either here or on the immediate horizon, are facing the need to foreclose or renegotiate many loans. Within a year or so, most of those loans will have vanished, for better or worse for the homeowners and for the neighborhoods those homes are in. Read more…
Lots of banks offered mortgages that allowed borrowers to pay less than the amount of interest being charged, but World was virtually alone in making loans that let the borrower continue to make small payments for a decade, rather than two or three years.
Most banks forced the borrower to start making much larger monthly payments if the amount owed — an amount that could rise each month if the borrower made the minimum payment — rose to 110 percent of the appraised value of the home when the loan was made. World saw that as stingy. It did not force the payments up until the amount owed was 25 percent greater than the original value.
You can’t get loans like that any more, of course. But World’s old mortgage loans live on. Other banks, where escalating monthly payments are either here or on the immediate horizon, are facing the need to foreclose or renegotiate many loans. Within a year or so, most of those loans will have vanished, for better or worse for the homeowners and for the neighborhoods those homes are in. Read more…
Tuesday, May 12, 2009
Goldman to Pay $60 Million in Subprime Settlement (Update1)
Goldman Sachs Group Inc has agreed to pay almost $60 million to settle an investigation into packaging mortgage securities. The bundling of these risky types of mortgages (a/k/a sub-prime) turned the U.S. housing slump into a global recession.
“There’s no dispute that Goldman Sachs and other securitizers have been involved intricately in this whole process by which loans were made to homeowners and as we have argued, in many instances, destined to fail,” Coakley said. Read more...
“There’s no dispute that Goldman Sachs and other securitizers have been involved intricately in this whole process by which loans were made to homeowners and as we have argued, in many instances, destined to fail,” Coakley said. Read more...
Friday, May 8, 2009
Geithner Bets U.S. Can Avoid Japan Trap Through Bank Earnings
By Rich Miller and Matthew Benjamin
May 8 (Bloomberg) -- Treasury Secretary Timothy Geithner is betting that U.S. banks can do something their Japanese counterparts were unable to accomplish in that country’s “lost decade” of the 1990s: earn their way out of trouble.
The stress-test results released yesterday by regulators found that the 19 largest banks face a $74.6 billion capital hole that may be filled mostly by private money. That compares with the hundreds of billions of dollars seen by outside analysts, including the International Monetary Fund, and takes into account banks’ projected earnings over the next two years. Read more...
May 8 (Bloomberg) -- Treasury Secretary Timothy Geithner is betting that U.S. banks can do something their Japanese counterparts were unable to accomplish in that country’s “lost decade” of the 1990s: earn their way out of trouble.
The stress-test results released yesterday by regulators found that the 19 largest banks face a $74.6 billion capital hole that may be filled mostly by private money. That compares with the hundreds of billions of dollars seen by outside analysts, including the International Monetary Fund, and takes into account banks’ projected earnings over the next two years. Read more...
Tuesday, May 5, 2009
Fed Stress Test Results May Show 10 U.S. Banks Need Capital
By Robert Schmidt and Rebecca Christie
May 5 (Bloomberg) -- The Federal Reserve plans to deliver results of stress tests on U.S. banks to executives today that may show about 10 companies need additional capital to weather a deeper recession, people familiar with the matter said.
Read more...
May 5 (Bloomberg) -- The Federal Reserve plans to deliver results of stress tests on U.S. banks to executives today that may show about 10 companies need additional capital to weather a deeper recession, people familiar with the matter said.
Read more...
Monday, May 4, 2009
Mortgage Fraud Epidemic: How the FBI Blew It and Why There's No 'Perp Walks'
Posted Apr 06, 2009 08:00am EDT by Aaron Task
In the wake of the bursting of the housing bubble, you'd think there'd be a significant number of investigations into criminal wrongdoing and accounting fraud, similar to what occurred after the S&L crisis and bursting of the stock bubble in 2000.
But two years into the crisis the FBI "doesn't have a single major conviction or indictment of anyone," notes William Black, a former senior bank regulator and S&L prosecutor, and currently an Associate Professor of Economics and Law at the University of Missouri - Kansas City.
Read more…
In the wake of the bursting of the housing bubble, you'd think there'd be a significant number of investigations into criminal wrongdoing and accounting fraud, similar to what occurred after the S&L crisis and bursting of the stock bubble in 2000.
But two years into the crisis the FBI "doesn't have a single major conviction or indictment of anyone," notes William Black, a former senior bank regulator and S&L prosecutor, and currently an Associate Professor of Economics and Law at the University of Missouri - Kansas City.
Read more…
Saturday, May 2, 2009
Mortgage Bankers Celebrate Victory
The Mortgage industry has taken a lot of criticism in the last several months. There has been a massive lobbying campaign against bankruptcy reform. Please watch this You Tube video for more information.
Watch Video
Watch Video
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