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Banks are in for another ugly year in 2010. But this time the problem will be the big batch of deteriorating commercial real estate loans on their books.. (Read our cover story about why this real estate bust is different.) Commercial real estate loans that banks underwrote and held on their books skyrocketed to approximately $190 billion in 2007, up from $11 billion in a single year, a decade earlier. In all, banks hold some $1.8 trillion of commercial real estate debt on their books. Trouble is, nobody knows just what the values of the loans on bank books’ are...

More Extortion By The BanksThe Market TickerSaturday, November 7. 2009 Posted by Karl Denninger in Corruption at 13:14 Yeah, that's a strong word. In my opinion it is also the only word that's appropriate for the circumstances: The Fed has been informed by dealers that they would be willing to enter into very sizable amounts of reverse repos with the Fed, if asked to do so, provided they could get some relief from Tier I capital constraints, MNI also understands. Ah, the old "let us lever up and we'll do it, but if it blows up, we'll then be back...

Rep. Frank Warns on Consequences of Overreacting; Regulators Fire Back Politicians are putting pressure on regulators to ease up on small community banks across the U.S., a move some say could increase the cost of cleaning up the financial crisis. Last week, House Financial Services Committee Chairman Barney Frank (D., Mass.) sent a letter to the country's top bank regulators, including Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair, urging them to "show some temperance in their regulation of traditional banks." One common complaint from lawmakers is that regulators' tough examinations are making banks reluctant...

Europe Stocks Trim Losses After ECB, BoE Decisions Thu Nov 5, 2009 8:04am EST By Blaise Robinson PARIS, Nov 5 (Reuters) - European stocks were down 0.3 percent by early afternoon on Thursday, with banks and miners among the biggest losers. Yet shares trimmed their losses after both the Bank of England and the European Central Bank kept rates unchanged. The BoE kept rates on hold and said it would expand its quantitative easing programme by 25 billion pounds ($41 billion), while the ECB kept interest rates at 1 percent as expected. The two central banks' decisions came a day...

States Growing Hair On Their PairThe Market TickerTuesday, November 3. 2009 States Growing Hair On Their PairIt's about damn time: Frustrated by the banks’ inability or unwillingness to stop an avalanche of foreclosures, the states are considering lawsuits over the creation and marketing of millions of bad loans as well as the dismal pace of mortgage modifications. Good. As I have repeatedly opined, there is more than enough fertile ground here for lots of lawsuits to spring up and take root. Indeed, let's go down the list of what I believe are the grounds for such suits: * Most of...

Are Bank Safe Deposit Boxes Safe? No Commodities / Gold & Silver 2009 Nov 02, 2009 - 06:02 PM By: David_Vaughn Got a lot of email when I suggested that safe deposit boxes are not safe from bank or government intrusion. In most minds the “safe deposit box” is the “holy grail.” Our comfort will always be OK as long as our safe deposit box remains safe from others ill intent. Noticed the last few years how the Swiss Banks are no longer confidential places for one to store anything of value? The US government has applied pressure on Switzerland...

Sheila is apparently upset at the banks "pushing back" against reform: Sheila Bair, chairman of the Federal Deposit Insurance Corp, said on Monday that some in the financial services sector are trying to argue that regulatory reform would stifle innovation and impede economic growth. "That makes me angry," Bair said in a text of remarks prepared for a lecture at Kansas State University. It does? You're not showing it. How hard is this Sheila? You have the authority, along with the OTS and OCC, to walk into any bank in the United States with your examiners, look at every asset...

My neice watches this crappy television show. Its just disgusting. Teen prostitutes?? Her only concern is that they might be raped or kidnapped?? Preview for tomorrows show?? 8 months old and working as a prostitute. Gawd.... kids are watching this stuff. Kids are getting the message that this is normal. Thats what they learn from TV, movies and music. crap. That is what TV is, just crap.

Alistair Darling, the Chancellor, will confirm over the next few days that Royal Bank of Scotland (RBS) and Lloyds Banking Group, both of which are majority-owned by the taxpayer, will be split up. (snip) Under the deal, the new institutions will not be allowed to be taken over by any purchaser which currently owns a British retail bank. Ministers will stop this happening using their powers as controlling shareholders in Lloyds, RBS and Northern Rock, rather than by new regulations. Instead, likely purchasers will come in from the US, Australia or the Middle East. The Daily Telegraph revealed that nearly...

It is hardly surprising that GMAC is circling back to the government for a third helping of taxpayer money. GMAC is struggling under the double whammy of bad car loans and the fallout from its misguided foray into mortgage finance at the height of the housing bubble. After the government applied stress tests to the banks last May, it was the only big bank that could not raise the capital it was deemed to need. Still, GMAC’s return to the public trough — where it expects to get up to $5.6 billion on top of the $12.5 billion it has...

A new bill in Congress to increase financial regulation would allow the federal government to seize institutions deemed “too big to fail” if Treasury saw a large enough risk of collapse. McClatchy reports that some on Capitol Hill have begun to refer to it as a “death panel” for banks, apparently more as a joke than a concern. Have any of them actually read the Constitution, especially the Fifth Amendment? Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, worked over the weekend and throughout Monday to draft the legislation. It would provide the government with first-ever...

WASHINGTON (CNN) – The banking system today may be in a more precarious position than it was a year ago, the man charged with overseeing a $700 billion bailout program said Wednesday. Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program, told CNN's Wolf Blitzer on Wednesday that the government's decision to support bank mergers over the past year may have put the U.S. economy more at risk. "These banks that were too big to fail are now bigger," Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit...

Over the past few weeks, Max has been on France 24 warning that these big banks will announce new and huge losses . . . but only AFTER their Christmas bonus checks have been cashed. Get ready for second round of trillion dollar bailouts sometime in January/February.

.... Busting up the banking trusts is essential for the following reasons: -It eliminates the too-big-to-fail issue, which puts entire economies at risk. -Excessively large banks destroy democracies, like the United States, through inordinate influence on policy, politicians and regulators. -Oligopolies and monopolies are economically inefficient and charge excessive fees, earn excessive profits and pay excessive salaries and bonuses. -Oligopolies and monopolies don't innovate because they don't have to. -Oligopolies and monopolies are risky because they indulge in groupthink mistakes that are too large for economies and the business community to bear. -Oligopolies and monopolies fossilize markets by dealing with...

Congress put American taxpayers on the hook for $700 billion last year when it approved the massive bailout to paper over the imprudent lending decisions of nine Wall Street giants: Bank of America, Citigroup, Wells Fargo, JP Morgan Chase, Goldman Sachs, Morgan Stanley, Merrill Lynch, State Street and the Bank of NY Mellon. The bailout was essential to save the nation from a complete economic meltdown. Or so insisted President George W. Bush, Treasury Secretary Hank Paulson, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi. One year later, however, a little-noted report by the U.S. Government Accountability Office...

Serious plotting gets located this weekend in Armonk, NY where the Symposium on Building the Financial System of the 21st Century: An Agenda for Japan and the United (Pdf) takes place. The name of the symposium tells you enough about what is going on here. They really don't even try to hide anymore what they are up to. It is hosted by the Harvard Law School Program on International Financial Systems. On Saturday evening, Deputy Treasury Secretary Neal Wolin will speak. In addition to the Treasury, the Fed had a representative, as

Yet another bank with more than 40% loss taken by the FDIC: As of September 30, 2009, Partners Bank had total assets of $65.5 million. .... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $28.6 million. Again, we see that the FDIC refused to step in and close this institution when the firm's Tier Capital Ratio (based on an actual market value for assets) went below 6%, 5%, 4%, 3%, 2%, 1% and flat. Indeed, the FDIC not only allowed all of the firm's Tier Capital (that is, their EXCESS CAPITAL) to be wiped...

Around 2005, I wrote an article that predicted that when the US housing bubble broke, there would be a stock/financial crash - and this: "When markets collapse, the US Fed and other central banks will end up having to buy up the markets, and basically monetize them...in the $trillions" I don't remember the exact quote but that is what I said. Well, here we are. The Fed has spent $3-4 trillion directly, and another roughly $19 trillion buying/guaranteeing bad assets and giving mortgage bonds and such support. The ECB also did roughly $4-6 trillion of market bailouts/backstopping. Japan and other...

More Black Swans In Store For The US Economy The Pragmatic CapitalistOct. 23, 2009, 6:46 AM Central Banks and governments around the world have thrown everything they can muster at the financial crisis. And up until now, it appears as though they have succeeded. Equity markets are up 60%+ around the globe and investors are beginning to party like its 1999. But a look underneath the hood shows that shiny Cadillac might just be a clunker (don’t worry, the government will take out a loan so you can take out a loan to turn in your clunker for a new...

The vice-chairman of Goldman Sachs has launched an astonishing defence of bumper bonuses just a year after bankers brought the world's economy to the brink of collapse. In a speech likely to recall fictional banker Gordon Gekko in the film Wall Street - whose mantra 'greed is good' came to sum up the excesses of the 1980s - Lord Griffiths claimed taxpayers should 'tolerate the inequality'. And he insisted that banks should not be ashamed of rewarding staff. Lord Griffiths (left) has echoed the 'Greed is good' maxim by Gordon Gekko, played by MIchael Douglas in the film Wall Street,...

<p>The measure, approved by voice vote, would allow federal regulators to exempt national banks from state laws if those laws would "significantly interfere" with the bank's ability to do business. Otherwise, banks would be forced to comply with a myriad of state laws that are often tougher than federal laws, under the House plan.</p>

CHARLOTTE -- A monument to the financial crisis is rising amid this city's thicket of skyscrapers: gleaming, glass-walled trophy tower that was intended as a fitting headquarters for Wachovia's national banking empire. It will open instead as the headquarters of a regional power company. Wachovia, unable to survive a run of bad decisions, was swallowed by San Francisco-based Wells Fargo during the depths of the crisis last year. Few American cities prospered more over the past two decades than Charlotte, its growth propelled and gilded by Wachovia and its crosstown rival, Bank of America. Executives shoehorned gaudy mansions into old...

Bernanke Gone Berserk! Bank Reserves Explode! Fed Money Printing Gone Wild! Interest-Rates / Quantitative Easing Oct 19, 2009 - 08:18 AM By: Martin_D_Weiss Martin here with the most shocking new numbers I’ve seen in my lifetime. My conclusion: Fed Chairman Bernanke has dumped so much funny money into the U.S. banking system and has done so little to manage how that money is used, the fate of our entire economy has now been cast under a dark shadow of doubt. This is not conjecture or exaggeration. Nor are the underlying facts subject to debate. They are blatant, unambiguous, and fully...

Inflation Fears Drove Rate Rise, RBA Minutes Show (Australia) James Glynn October 20, 2009 Article from: Dow Jones Newswires GROWING concerns that inflation could increase were a decisive factor in the Reserve Bank's decision to raise interest rates, the central bank's minutes released today showed. The elevated rhetoric on inflation supports the prevailing view in financial markets that the RBA is set to continue hiking the cash rate target over coming months and through 2010, seeking a return to more normal levels around 5.0 per cent. "Underlying inflation was still, on the latest data, above the target and, while current...

Wall St. Is Winning: Elizabeth Warren "Speechless" About Record Bonuses Posted Oct 16, 2009 10:58am EDT by Aaron Task in Newsmakers, Banking Elizabeth Warren, chair of the Congressional Oversight Panel, is the rare public official who doesn't mince words. But Warren admits to being "speechless" at reports of record bonuses on Wall Street. "I do not understand how financial institutions could think they could take taxpayer money and turn around and act like it's business as usual," Warren says. "I don't understand how they can't see that the world has changed in a fundamental way - it's not business as...

MUCH of the recent anger over bank bonuses has been focused on Goldman Sachs, which, according to results just published, accumulated a further $5.4 billion for its staff in the most recent quarter. Yet the one thing that can be said about Goldman is that if its employees are making hay partly on the back of an implicit public guarantee, so are shareholders. In the same quarter the bank generated an annualised return on equity of 21%. Not so for some of America’s other banks. There, the owners (and in theory the controllers) of the firms seem to have been...

NEW YORK (CNNMoney.com) -- Bank of America suffered a $2.2 billion dollar loss in the latest quarter, the company said Friday. The nation's biggest bank blamed the third-quarter performance on credit losses, particularly within some of its consumer-related businesses. The results were worse than Wall Street analysts had expected

Rep. Michele Bachmann is all over radio presenting information on the corruption of congress, banking and ACORN. And NO, they're not going to let her on mainstream TV news! She explained that the CRA required banks to lend to unsound applicants OR they could instead contribute to.....ACORN. It's even worse than Bachmann presents it. We found this article from the year 2000, there were others as well...we were ASLEEP! This is just a few snips, long, worth the read. And remember, Clinton started misusing the law passed by congress - the Community Reinvestment Act, but for 8 years after the...

Understanding A Systemic Banking Crisis Harald Uhlig 15 October 2009 The recent crisis was like a bank run, but it didn’t quite fit. This column describes six features that a model of the recent crisis ought to capture and describes a new theory with which we might analyse the crisis and policy responses. Bryant (1980) and Diamond and Dybvig (1983) have provided us with the classic benchmark model for a bank run. The financial crisis of 2007 and 2008 is reminiscent of a bank run, but not quite (Brunnermeier 2008; Gorton 2009). The following six features summarise the prevalent view...

Spare a thought for departing bank bosses. They were mostly useless, not venal SOME view history as just the biography of great and of villainous men. By this account bank bosses are to blame for the great crash of 2008. Most have now been booed offstage. With the departure on September 30th of Ken Lewis, the head of Bank of America, only three chief executives at America’s ten biggest banks before the crisis remain in position. Europe has let lots of blood, too: the bosses behind fiascos at UBS, Fortis and Royal Bank of Scotland (RBS) have gone to the...

Bank Earnings: Reality Check Ahead Michael Panzner October 11, 2009 Whether you call it a reality check... ...a wake-up call... ...or a splash of cold water reality,... ...based on the following MarketWatch report, "October Surprise from Bank Earnings?" it appears that lots of people are going to be caught out when banks announce their earnings in the weeks and months ahead (I guess they've been listening to the gang that couldn't rate straight): Some experts worry results may be much more negative than investors expect.[snip]

The calendars, obtained by the AP under the Freedom of Information Act, offer a behind-the-scenes glimpse at the continued influence of three companies — Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. — whose executives can reach the nation's most powerful economic official on the phone, sometimes several times a day. What the calendars show, however, is that only a select few can call the treasury secretary.

No one is immune from cyberthreats, not even the head of the FBI. FBI Director Robert Mueller was banned by his wife from doing online banking after he nearly fell for a phishing scam, he said on Wednesday during a talk at the Commonwealth Club of California. He received an e-mail purporting to be from his bank that looked "perfectly legitimate" and which prompted him to verify some information. He started to follow the instructions but then realized that that "might not be such a good idea," he said. "Just a few clicks away from falling into a classic Internet...

The FBI on Wednesday announced that it had charged 53 defendants, the largest number ever charged in a cybercrime case, following a multinational investigation into a phishing scheme that operated in the United States and Egypt. Thirty-three of the 53 defendants named in the indictment have been arrested, the FBI said, and several others are being sought. The investigation, dubbed "Operation Phish Phry," began in 2007. Authorities in Egypt have charged 47 defendants linked to the phishing operation. Phishing is a form of social engineering that attempts to convince Internet users, via e-mail or other means, to provide online credentials...

The collapse of a financial institution is not necessarily a disaster. If free markets are to thrive, we must not allow giant, state-supported banks to believe that they are indestructible, Niall Ferguson warns For conservatives, the financial crisis that began in the summer of 2007 has posed a major problem. We had grown rather accustomed to singing the praises of free financial markets. The crisis threatens to discredit them. But this crisis was not the result of deregulation and market failure. In reality, it was born of a highly distorted financial market, in which excessive concentration, excessive leverage, spurious theories...

Soros: US Banking System Is "Basically Bankrupt" Henry BlodgetOct. 5, 2009, 2:13 PM A trio of bears weighed in today. It's hard to argue with any of them. * Soros says our banking system is "basically bankrupt" and consumers have debt coming out of their ears. * Roubini thinks the market is discounting a "v-shaped" recovery and will therefore be disappointed with a "U" * Robert Prechter (Elliott Wave guru) says the bear market resumed in September. Prechter, of course, is predicting a full blown Depression.

One of the larger mistakes in the Obama financial regulatory reform package was its attempt to give the Federal Reserve additional powers so that it could in theory protect the economy from risks such as the housing bubble that could endanger the entire financial system. As we have argued in the past, the entire concept of minimizing systemic risk is a thankless task that is probably impossible. A key question is how much power such a regulator would have. As we said in June, “Congress could grant it such wide powers that the agency could intervene in just about any...

ISTANBUL -- The International Monetary Fund, acting at the behest of leaders of the Group of 20 nations, is examining how a tax on financial institutions could be applied globally. Neither the size nor use of revenue from such a tax has been decided. Brazil's finance minister, Guido Mantega, said when ministers met in Pittsburgh recently they discussed using proceeds to help finance developing countries during crises. Another possibility, discussed in a recent IMF report, would be to "pre-finance a bailout fund" to handle financial institutions deemed "too big to fail." IMF Deputy Managing Director John Lipsky compared a prospective...

I know this site is not Dear Abby but I need to turn to the freeper family for advice. I have been laid off from Wells Fargo Auto Finance Since December 10th 2008. I was in the top 3 people in the nation so I thought I was bullet proof. However when Wells Fargo bought Wachovia I thought things would be ok until Wells Fargo decided that they liked Wachovia’s Auto unit better than their own. Instead of taking the best from both companies they just laid off all of the people in their own auto group and replaced them...

WASHINGTON — The Federal Deposit Insurance Corp. is expected to take the unprecedented step of collecting banks' regular premiums early to inject cash into the shrinking deposit insurance fund. Three industry executives and a government official say the FDIC board likely will call for "prepaid" bank insurance premiums at its meeting Tuesday. The banks prefer that option over a special emergency fee — which would be the second this year. The officials spoke on condition of anonymity because the decision has yet to be made public. A spokesman for the FDIC declined to comment Monday afternoon. It would be the...

Marshall & Ilsley Corp. said it has extended its foreclosure moratorium an additional 90 days through Dec. 31. The initial moratorium announced on Dec. 18, 2008, was on all owner-occupied residential loans for customers who agree to work “in good faith” to reach a successful repayment agreement. The moratorium applies to loans in all M&I markets. M&I had announced a previous extension on June 26 that runs through Tuesday. Milwaukee-based M&I (NYSE: MI) has a “homeowner assistance program” that assists potentially distressed homeowners who the bank identifies and offers assistance. The bank also has a “foreclosure abatement program” that includes...

Following up on the quick mention now that I have a story to cite from Amherst: Cure rates for these distressed loans remain low. Amherst noted a near 0% cure rate of all loans in foreclosure, 0.8% for 90 plus days delinquent, 4.4% for 60 days delinquent and 26.5% for 30-day delinquencies. All told, Amherst expects 12.42% of units (from the 13.54% of properties delinquent and in foreclosure) to eventually liquidate. Let's put some numbers on this. There are roughly 125 million single-family homes in the US. Of those, roughly 30% have no mortgage on them at all. This leaves...

NEW YORK (MarketWatch) -- The board of the Federal Deposit Insurance Corp. on Tuesday recommended that its member banks pay in advance three years worth of deposit insurance premiums in order to meet the agency's ballooning needs to protect customers of failed banks. "The banking industry has substantial liquidity to prepay assessments. As of June 30, FDIC-insured institutions held more than $1.3 trillion in liquid balances, or 22% more than they did a year ago," the FDIC said in a published statement. The board also voted to raise the annual premiums for member firms by three basis points - or...

It's something any bank would demand to know before handing out a loan: Where's the money going? But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it. "We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,'" said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to."

Guillermo Loaiza, a loan officer for a unit of J.P. Morgan Chase & Co. in Phoenix, has resigned from the board of Acorn Housing, a spokesman for J.P. Morgan said. Acorn Housing is an affiliate of the community-organizing group Acorn, the full name of which is the Association of Community Organizations for Reform Now. Both Acorn and Acorn Housing have been under fire since the recent release of secretly recorded videos that depicted Acorn employees offering advice on evading taxes, setting up brothels and smuggling illegal immigrants. J.P. Morgan has said it doesn't have a regular working relationship with Acorn...

.... The record seems to show that capitalism cannot function without state help, and the State cannot function without private enterprise. So perhaps we can have a satisfying synthesis of the two. I am told that, via the state holding, I am an investor in certain banks. Apparently I have accidentally stumbled into ownership of one of the great global cartels. So now I say, if capitalism is such a piece of cake, then I will have a slice myself. I will turn myself into a professional asset manager. The State will be my fund manager. I give it my...

The meeting with Bank of America executives came less than a year after American taxpayers rescued the institution with a $45 billion emergency bailout. The subject was derivatives, the complex securities that helped trigger Wall Street’s crisis and drag the country to the edge of an economic abyss. The guest of honor: Barney Frank. The bankers wanted to be sure that Representative Frank, the chairman of the House Financial Services Committee, would not attempt to clamp down excessively on derivatives trading. Frank said he left the session pledging to keep in mind their “legitimate’’ concerns. “It was not lobbying politically,’’...

Many of the fake documents used by a leading Democratic Party fund-raiser to defraud HSBC and Citigroup Inc were made by his brother-in-law, U.S. prosecutors said on Friday. Authorities arrested and charged Shahin Kashanchi, brother-in-law of indicted fund-raiser Hassan Nemazee, who donated to the presidential campaigns of Barack Obama, Hillary Clinton and other leading Democrats over the years. Nemazee pleaded not guilty on Wednesday in Manhattan federal court to defrauding a total of three banks -- Bank of America was the other -- out of $292 million in loan proceeds. "Based on e-mail traffic between Kashanchi and Nemazee, Kashanchi was...

WASHINGTON (AP) - Treasury officials and regulators are weighing a fresh round of bailouts for banks that were deemed too risky to qualify for earlier aid. Representatives from the Treasury Department, Federal Deposit Insurance Corp. and House Financial Services Committee discussed the plan by phone Thursday, said California Bankers Association Chairman Dan Doyle, who was on the call. Small community banks are struggling as commercial real estate and other loans go sour. Officials and industry representatives are considering how to get money to those banks, Doyle said Friday.

In one of today’s richest ironies, America’s fiscal health — such as it is — hinges on the generosity of the Chinese Communist party. Annoying Beijing’s mandarins could prompt them to skip our Treasury auctions. If China stops lending the Treasury money to underwrite Uncle Sam’s spendaholism, the Federal Reserve will need to print even more dollars to nudge the day of reckoning back over the horizon. The Chinese have urged Washington to stop spending and printing so much money, lest inflation turn China’s $800.5 billion in Treasuries into a giant misfortune cookie. Chinese officials have grown increasingly vocal —...