Free Republic

Wells Fargo executives know that everyone hates them. In the last two years, the bank has launched three separate marketing campaigns hoping to clean up its public image, only to see each effort thwarted by fresh, catastrophic scandals ― like wrongly repossessing 27,000 cars and foreclosing on 400 families for no reason. The bank’s latest quarterly filing with the Securities and Exchange Commission dedicates more than 2,000 words to “Additional Efforts To Rebuild Trust,” listing “automobile lending,” “mortgage interest rate lock extensions,” “consumer deposit account freezing/closing,” “certain activities within wealth and investment management,” “foreign exchange business,” “fiduciary and custody account...

NEW YORK — Government Sachs is returning to Washington. After a decade in the wilderness, Wall Street’s most powerful firm, Goldman Sachs, is dominating the early days of the incoming Trump administration. The newly picked Treasury Secretary, Steven Mnuchin, spent 17 years at Goldman. Trump’s top incoming White House adviser, Steve Bannon, spent his early career at the bank. So did Anthony Scaramucci, one of Trump’s top transition advisers. Goldman’s president, Gary Cohn, spent an hour schmoozing with President-elect Donald Trump on Tuesday and could be up for an administration job, possibly as director of the Office of Management and...

President-elect Donald Trump is considering Goldman Sachs President Gary Cohn for a senior administration job, possibly as director of the Office of Management and Budget, several sources close to the situation said on Wednesday. People familiar with the matter say Cohn's meeting with Trump on Tuesday included talks about a potential job in the new administration, possibly to run OMB, a sprawling office that will handle much of Trump's budget policy after he takes office in January. Cohn, who is friendly with Republicans and Democrats in Washington, is a longtime commodities trader who became Goldman's president and co-chief operating officer...

... Bank of America (BAC) on Thursday announced it set aside $997 million to protect from loan losses, mainly in the bank's $22 billion energy portfolio. Wells Fargo (WFC) warned of "significant stress" and "deterioration" in the oil and gas space. The problems there forced Wells Fargo to add $200 million in loan-loss reserves, its first increase to this rainy-day fund since 2009. And JPMorgan Chase increased its provisions for credit losses by 88%, mostly due to the oil, natural gas and pipeline business. It was enough to cause JPMorgan's (JPM) first drop in profits since late 2014. ...

Big banks better start looking under the couch cushions. They need to come up with $1.2 trillion to fortify themselves from the next financial meltdown. Global financial regulators Monday issued new rules that are designed to prevent a failing big bank from dragging down the entire financial system. That's what happened in 2008 when Lehman Brothers imploded, sparking the worst financial crisis since the Great Depression. ... Wells Fargo (WFC) and JPMorgan are the U.S. banks most vulnerable to the new G20 rules, Morningstar's Baker said. He estimates Wells Fargo may need to raise up to $30 billion, while JPMorgan...

Five years after President Obama signed it into law to address America’s financial crisis, the Dodd-Frank Act and the federal regulations that followed from it are relatively unknown by at least one-third of normal Americans. At the Heritage Foundation last Wednesday, University of Virginia Law School dean Paul Mahoney pointed out how Dodd-Frank allows a class of creditors to have access to their funds when a bank is going bankrupt. Short-term creditors, who often “run for the exits” when a crisis emerges, can now can “get access to all their funds” under Dodd-Frank. Usually, all creditors would have to wait...

the bogey man known as “systemic risk” to gain advantage over the other creditors . ... In order for the OTC casino to work, the derivatives contracts had to be given special priority in bankruptcy. Speculative derivative instruments such as credit default swaps (CDS), which caused the failure and government bailout of American International Group, could never exist in significant size were in not for the safe harbor from bankruptcy for derivatives created by Congress in the 1980s and 1990s. Members of Congress from both parties were paid very well for their treachery. ... The intellectual author of the “systemic...

While all eleven minutes of Obama’s apocalyptic “government shutdown” speech is well within the definition of “disingenuous”, there was one mundane comment that demands attention. The comment was more or less a throwaway line, aimed at illustrating the gravity of a government shutdown. Startling, the President uttered a fact during his 11 minutes of blaming Republicans. The Federal Government is, in fact, the largest employer in America. “The federal government is America's largest employer” Obama reminded the press as he launched into a childish explanation of Keynesian economics. And now, some of those “non-essential” employees might be getting furloughed. (Inexplicably,...

The FSOC’s decision to expand the too-big-to-fail designation to nonbank firms will be seen as the most damaging action taken under Dodd-Frank. It was no surprise that the Financial Stability Oversight Council (FSOC) decided last week to cite a number of nonbank firms as systemically significant, placing them in line for greater regulatory scrutiny by the Federal Reserve. What was a surprise is that — in the midst of a huge outcry in Congress about banks that are too big to fail (TBTF) — neither Congress nor the administration asked the FSOC to stop the designation process until the too-big-to-fail...

The Fiscal Cliff Is A Mole Hill Compared TAG Program Expiry Stock-Markets / Credit Crisis 2012Nov 12, 2012 - 07:24 AM By: Money Morning Shah Gilani writes: Everyone is afraid of falling off the "fiscal cliff." But there's another dangerous countdown clock about hit to zero. And no one is talking about it, even though it will spell even more financial problems for us all. At midnight on December 31, 2012, the Transaction Account Guarantee (TAG) program will expire. The TAG program was initiated at the height of the credit crisis when depositors were fleeing banks for fear they would...

An International Man lives and does business wherever he finds conditions most advantageous, regardless of arbitrary borders. He's diversified globally, with passports from multiple countries, assets in several jurisdictions and his residence in yet another. He doesn't depend absolutely on any country and regards all of them as competitors for his capital and expertise. Living as an international man used to be just an interesting possibility. But few Americans opted for it, since the US used to reward those who settled in and put down roots. In fact, it rewarded them better than any other country in the world, so...

With Bank of America investors finally realizing it is game over for the company as a going concern, at this point there are just two options for Brian Moynihan: - the spin off of CFC as a bad bank, backstopped by the Fed, or - Chapter 11, which for a bank is essentially liquidation (and with CDS trading up 50 bps to 260 a bankruptcy seems increasingly inevitable). It also means that another TARP is on the way. And once America realizes that another several trillion have to be put into its insolvent banking sector, it will get quite violent....

The current recovery's slowness is often noted, but not explained. Despite economic growth's resumption it lags earlier recoveries — most notably in employment. Hard-core liberals complain still more government intervention is needed. However, historical comparison shows government's size and its response have never been greater, albeit to less effect. The recession's mantra has been too big to fail; in the case of the government's size and role in the recovery, perhaps it should be too big to succeed. The recent recession is the worst since the Great Depression, yet the differences in the government responses — and the economic recoveries...

BUSTED | Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial Federal Audits Accuse Firms Of Defrauding Taxpayers By 4closureFraud Created 05/16/2011 - 17:36 [1] "The Justice Department is now contemplating whether to use the HUD audits as a basis for civil and criminal enforcement actions, the sources said. The False Claims Act allows the government to recover damages worth three times the actual harm plus additional penalties." It's about damn time! Let's see where this takes us... Maybe, just maybe, they actually have been doing their jobs... Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding...

Why QE 3 Is Guaranteed (The Alternative Is Something Four Times Bigger Than 2008)Graham Summers Phoenix Capital Research n 04/19/2011 20:42 -0400 AIG American International Group Bank of America Barclays Ben Bernanke Capital Markets Citibank Citigroup Countrywide Credit Suisse Deutsche Bank Fail Federal Reserve Goldman Sachs Greece Gross Domestic Product Japan Merrill Lynch Middle East Morgan Stanley Nomura notional value Portugal RBC Capital Markets RBS Too Big To Fail The financial world is awash with a debate as to whether the Fed will engage in QE 3 in the future. To me this debate is pointless. Indeed, the Fed HAS...

Democratic Sen. John Kerry (Mass.) will introduce bipartisan legislation later this week to create a federal infrastructure bank to fund major projects around the nation, an aide told The Hill. Kerry has at least one Republican senator backing the initiative — the American Infrastructure Financing Authority — that will initially cost about $10 billion and provide loans and loan guarantees for large, much-needed infrastructure projects.

The Cato Institute’s Arnold Kling wrote an excellent piece for NR about a year ago on why we need to break up the big banks — a position that, at the time, many would have considered fringe at best. However, in a recent white paper, Thomas M. Hoenig, president of the Federal Reserve Bank of Kansas City, says much the same thing:(PDF) Today, I am convinced that the existence of too big to fail financial institutions poses the greatest risk to the U.S. economy. The incentives for risk-taking have not changed post-crisis and the regulatory factors that helped create the...

Federal Reserve Bank of Kansas City President Thomas Hoenig on Wednesday said the U.S. central bank was risking a new financial crisis with its easy-money policies and urged regulators to break up the biggest banks. Hoenig, one of the Fed’s most outspoken internal critics, warned monetary policy should be tailored “so you don’t overshoot and cause the next crisis.” The maverick Fed official was also sharply critical of the regulatory overhaul passed last July, saying the risks to the U.S. economy from the largest financial institutions are even worse following the approval of the Dodd-Frank law. Hoenig’s remarks are likely...

Cost of Seizing Fannie and Freddie Surges for Taxpayers By BINYAMIN APPELBAUM June 19, 2010 CASA GRANDE, Ariz. — Fannie Mae and Freddie Mac took over a foreclosed home roughly every 90 seconds during the first three months of the year. They owned 163,828 houses at the end of March, a virtual city with more houses than Seattle. The mortgage finance companies, created by Congress to help Americans buy homes, have become two of the nation’s largest landlords. A foreclosed home in Casa Grande, Ariz., has been refurbished, inside and out. It is listed by Mr. Bridwell’s agency. Bill Bridwell,...

The Treasury Department on Friday announced that repayments to the Troubled Asset Relief Program (TARP) have for the first time surpassed the total amount of TARP funds that remain outstanding. Today's report to Congress shows that through the end of May, TARP repayments reached $194 billion. That figure exceeds outstanding TARP funds that total $190 billion. TARP repayments have continued to exceed expectations, substantially reducing the projected cost of this program to taxpayers, said Herb Allison, assistant secretary for financial stability, in prepared remarks. This milestone is further evidence that TARP is achieving its intended objectives: stabilizing our financial system...