Category: Finance

30 July 2011, 8:24 PM

Just Mint the Damn Coin Already!

I haven’t said much on the solutions on the debt ceiling debate, I’ve been more focused on the source of the problem, which is that Obama, in his eagerness to find a way to ~~gut~~ cut Social Security, Medicare, and Medicaid in order to feed his own ego by burnishing his self image as a bipartisan compromiser who brings people together because he’s just so damn awesome.

At this point, it would be good to have a plan B, and while there are a number of ways to work around this, though to my mind is the use of the Treasury’s explicit statutory authority to mint platinum proof coin of arbitrary value, which they could be deposited in the Federal Reserve account and used to keep the debt below the ceiling.

So if they mint a few trillion dollar coins, deposit them in their “checking account”, and it’s off to the races.

But it won’t happen, because Obama still wants to find a way to ~~gut~~ cut Social Security, Medicare, and Medicaid.

29 July 2011, 8:20 PM

It’s Bank Failure Friday!!!!

And here they are, ordered, and numbered for the year so far.

Virginia Business Bank,Richmond, VA
BankMeridian, N.A., Columbia, SC
Integra Bank National Association, Evansville, IN

It’s been a busy week.

In fact, it’s been a busy past 4 weeks. There have been 13 banks closed after what had been a bit of a lull.

So, here is the graph pr0n with last years numbers for comparison (FDIC only):

29 July 2011, 12:36 PM

Quote of the Day

Yves Smith on Obama’s mishandling of the debt ceiling crisis:

It is hard to come up with words that are strong enough to describe what an appalling display of misguided ego, inept negotiating postures, bad policy thinking, and utter disregard for the public interest are on display in this fiasco. But as a friend of mine likes to say, “Things always look darkest before they go completely black.”

Word.

27 July 2011, 7:18 PM

It Looks Like the 50-State Foreclosure Fraud Coverup May be Unraveling

First, Massachusetts Attorney General Martha Coakley said yesterday she will not release banks from liability incurred through fraudulent paperwork:

Three states conducting their own probes of residential mortgage practices are resisting broad liability releases sought by banks to settle a nationwide foreclosure investigation.

The banks, in settlement talks with state and federal officials, are seeking releases that would protect them from future legal liabilities. Massachusetts Attorney General Martha Coakley said yesterday she won’t endorse a deal that includes certain releases. New York and Delaware have raised similar concerns over terms of a possible deal.

All three states are conducting investigations tied to mortgage operations of banks. Delaware and Massachusetts officials say a settlement shouldn’t release banks from some claims, including those related to bundling mortgages into securities, while the inquiries continue.

“We’re not prepared to do a broad liability release for either securitization issues or for MERS until we’ve completed that piece of investigation,” Coakley said in a telephone interview yesterday. Mortgage Electronic Registration Systems Inc., or MERS, is a national mortgage database used by banks.

Basically, Coakley is saying that if there is a release on securitization fraud, she will not sign onto the deal, and the banks know that if they are ever effectively pursued on securitization fraud, they are dead, so no deal.

To the rest of the AGs, get off your ass, and convene a grand jury, the rest of the AGs, and stop letting yourself get strong-armed by Obama, Holder, and company to go easy on the banks.

H/t Naked Capitalism.

27 July 2011, 7:11 PM

You Have to Love the Bait and Switch that Obama Pulled on the CFPB

As you know, Barack Obama decided not to appoint Elizabeth Warren as the first head of the Consumer Financial Protection Bureau (CFPB), but instead chose to nominate their current head of enforcement, Richard Cordray, former Ohio Attorney General, who had filed lawsuits against predatory banks.

It was better than the alternative, Raj Date, but it seemed to me that it was a worthless gesture to the Republicans, since they promised to filibuster anyone, because they want the bureau gutted.

Obviously, this screams “Recess Appointment,” but Obama is having none of that, not because he’s weak, but because this creates paralysis which he can exploit to effectively make a banker the head of the agency.

Raj Date has been elevated to adviser to the Treasury secretary for the Consumer Financial Protection Bureau, Warren’s old position, and I guarantee that there will be no pressure from the Obama to administration to get an up or down vote on Cordray.

They give a nod to the people who want the CFPB to work with their nomination, and then they put a bankster in charge of running the bureau.

Seriously, Obama has his tongue so far up the bankster’s asses that he tastes tonsils.

Who is Date? He’s the current associate director of research, markets and regulations, and he’s a f%$#ing bankster, having been the, “senior vice president for corporate strategy and development at Capital One and a managing director in the financial institutions group at Deutsche Bank.”

So now, Date can emasculate the CFPB while Cordray waits for a vote on his nomination that will never come.

27 July 2011, 7:57 AM

If You Were Wondering How Evil the Banksters Were………

The fact that they are threatening to drop millions of customers because the law may require them not to F%$# them over quite so badly might give you an inkling:

Brokerage firms may drop millions of individual retirement account holders if a proposed U.S. Labor Department rule takes effect, a lobbying group said today.

The Labor Department wants to expand the scope of fiduciary responsibility to protect those saving for retirement from conflicts of interest, such as recommending investments with higher fees. The rule would require investment professionals who advise employers and workers with retirement savings plans such as 401(k)s or IRAs to act in the best interest of their clients.

The change may cause financial firms to offer fewer investment options in retirement accounts and shift to a fee- based model used by investment advisers, which will raise costs, Kenneth Bentsen, executive vice president for public policy and advocacy at the Securities Industry and Financial Markets Association, said at a Washington hearing before the House Subcommittee on Health, Employment, Labor and Pensions.

He’s circumspect, but what the lobbyist from the lead financial services organization in the country just said was, “If you don’t let us f%$# our customers without lube, we’ll kick them to the curb.”

Why aren’t these guys going to jail?

H/t Naked Capitalism.

25 July 2011, 9:04 PM

Helmut Kohl Excoriates Angela Merkel

And it’s not just the former German Chancellor, (with the caveat that he is denying that he said this now) who was at one point considered her mentor, as well as much of the CDU’s old guard have not taken to harshly criticizing her behavior in the crisis.

This is rather unsurprising.

Unlike in America, the mainstream right (the CDU) finds the idea of hosing down taxpayers to pay off bankers, particularly when it won’t solve the problem, to be a bad thing.

Hopefully this is a step in realizing that the problems with the Eurozone, at least those not centered in EU HQ in Brussels, flow from Germany, and how it used its influence to structure the Eurozone.

22 July 2011, 8:35 PM

It’s Bank Failure Friday!!!!

And here they are, ordered, and numbered for the year so far.

It appears that things are picking up a bit.

Southshore Community Bank, Apollo Beach, FL
LandMark Bank of Florida,Sarasota, FL
Bank of Choice,Greely, CO

So, here is the graph pr0n with last years numbers for comparison (FDIC only):

16 July 2011, 8:03 PM

Can We Please Primary the Bastard Now?

So it appears that Barack Obama is removing Elizabeth Warren as head of the Consumer Financial Protection Bureau:

President Barack Obama has chosen a candidate other than Elizabeth Warren as director of the new Consumer Financial Protection Bureau, according to a person briefed on the matter.

The president’s choice is a person who already works at the consumer agency, the person said yesterday. Obama may make the nomination as soon as next week, another person briefed on the administration’s plans said.

The people, who spoke on condition of anonymity because the process isn’t public, didn’t name Obama’s choice.

Elizabeth Warren, a Harvard professor, was appointed last fall by Obama to set up the consumer bureau until a director was named. Warren previously was head of the congressional watchdog panel overseeing the bank bailout.

And here is the kicker:

Raj Date, a top deputy to Warren at the consumer bureau, was on a short list of candidates to become director ………

………He was senior vice president for corporate strategy and development at Capital One and a managing director in the financial institutions group at Deutsche Bank. During the debate over Dodd-Frank, Date headed the Cambridge Winter Center for Financial Institutions Policy, a research group he founded.

So he’s replacing Elizabeth Warren with a f%$#ing banker.

But in classic fashion, he’s floating out a payoff for her to keep her mouth shut until after the 2012 election, the Democratic nomination for Senate, where she would run against Scott Brown:

Elizabeth Warren’s calendar sure looks like the schedule of a woman considering a Senate bid, or at least someone being courted by power players in Massachusetts and the Senate Democrats’ campaign operation in Washington.

In recent weeks, Warren has met in person or spoke on the phone with Democratic Senatorial Campaign Committee Chairwoman Patty Murray, David Axelrod, Sen. Charles Schumer (D-N.Y.), Sen. John Kerry (D-Mass.) and Massachusetts Democratic Reps. Barney Frank, Stephen Lynch and John Tierney. The phone call with Murray took place in early June, Roll Call has learned. Warren attended a community banking event with Tierney in the Bay State and dined with Schumer, a former DSCC chairman and an aggressive recruiter who remains involved in DSCC activities.

Warren’s May calendar, the most recently available public schedule, shows the Schumer dinner along with the other meetings and discussions.

Given that Warren is leading the creation of a new Consumer Financial Protection Bureau, CFPB business could, of course, have been the lone agenda item during these meetings. But for a woman some national Democrats and liberal activists are hoping will take on Massachusetts Sen. Scott Brown (R) — a prime target in 2012 — her calendar alludes that she has at least been examining the possibility of a run.

So he’s putting her up to run against Scott Brown, which is a win-win for Obama.

Basically, she’s about the only person who appears to have a possibility to beat him right now, though it’s a tough row to hoe, because Brown is the consummate politician, and she isn’t.

If she wins, it’s easier to hold onto the Senate, and she gets buried as a low seniority Senator, where the old boys’ network keeps her far away from any meaningful banking regulation

If she loses, then no one could have won, and he keeps her inconvenient truths out of the press until his reelection.

15 July 2011, 8:56 PM

It’s Bank Failure Friday!!!!

Well, after a lull, the past two weeks have been pretty active, with 7 banks closed.

It still looks better than last year, but it ain’t good by a long shot.

Here are this week’s, ordered, and numbered for the year so far.

One Georgia Bank, Atlanta, GA
High Trust Bank, Stockbridge, GA
First Peoples Bank, Port St. Lucie FL
Summit Bank, Prescott, AZ

And here is the credit union closing:

Vensure Federal Credit Union, Mesa, AZ

So, here is the graph pr0n with last years numbers for comparison (FDIC only):

13 July 2011, 6:38 PM

Bernanke is Scared

He just explicitly left the door open for another round of quantitative easing, or some similarly extreme measure:

The Federal Reserve chairman, Ben S. Bernanke, gave a subdued account of the economy’s health Wednesday and said that the Fed was prepared to expand its economic aid campaign once again, if necessary, though such a step was not imminent.

Less than a month has passed since Mr. Bernanke said at a press conference that the central bank intended to stand back and take the measure of the nation’s sluggish recovery. Wednesday’s remarks amounted to acknowledgment that so far, the news has been almost uniformly bad.

“I think we have to keep all the options on the table,” Mr. Bernanke said in testimony before the House Financial Services Committee. “We don’t know where the economy is going to go.”

This is about as close as you will ever hear a central banker get to saying that, “This scares the sh%$ out of me.”

13 July 2011, 6:13 PM

But of Course, It’s Florida…

Attourneys in the Florida Attorney General’s office were forced to resign with no notice or any opportunity to communicate what they had found:

A lead foreclosure fraud investigator for the state said she and a colleague were forced to resign from the Florida attorney general’s office, unexpectedly ending their nearly yearlong pursuit to hold law firms and banks accountable.

Former Assistant Attorney General Theresa Edwards and colleague June Clarkson had been investigating the state’s so-called “foreclosure mills,” uncovering evidence of legal malpractice that also implicated banks and loan servicers.

Despite positive performance evaluations, Edwards said the two were told during a meeting with their supervisor in late May to give up their jobs voluntarily or be let go. Edwards said no reason was given for the move.

“It all happened very abruptly,” said Edwards, who had worked in the attorney general’s office for about three years.

The foreclosure investigations were launched under former Attorney General Bill McCollum, but Edwards said she sensed changes were coming under Gov. Rick Scott and Attorney General Pam Bondi.

“I think they wanted to put people in there that were more in line with their thinking,” Edwards said.

Bondi’s press secretary said Tuesday that foreclosure investigations are still open and are being personally led or supervised by Division Director Richard Lawson.

Yeah sure. Rick Scott is determined to get to the bottom of rich lawyers cheating ordinary people.

8 July 2011, 8:30 PM

It’s Bank Failure Friday!!!!

It’s been a busy week, with closings of both bank and credit unions this week, 3 banks, one credit union, which is the most action we’ve seen since mid May.

And here they are, ordered, and numbered for the year so far.

First Chicago Bank & Trust, Chicago, IL
Colorado Capital Bank,Castle Rock, CO
Signature Bank, Windsor, CO

And here are the credit union closings:

Borinquen Federal Credit Union, Philadelphia, PA

So, here is the graph pr0n with last years numbers for comparison (FDIC only):

It’s better than last year but still plenty ugly.

6 July 2011, 9:49 PM

When Ron Paul Sounds Sane…..

We are living in strange times, and he just suggested that the Federal Reserve destroy the $1.6 trillion in Treasury notes that it bought as a part of quantitative easing program:

Representative Ron Paul has hit upon a remarkably creative way to deal with the impasse over the debt ceiling: have the Federal Reserve Board destroy the $1.6 trillion in government bonds it now holds. While at first blush this idea may seem crazy, on more careful thought it is actually a very reasonable way to deal with the crisis. Furthermore, it provides a way to have lasting savings to the budget.

The basic story is that the Fed has bought roughly $1.6 trillion in government bonds through its various quantitative easing programs over the last two and a half years. This money is part of the $14.3 trillion debt that is subject to the debt ceiling. However, the Fed is an agency of the government. Its assets are in fact assets of the government. Each year, the Fed refunds the interest earned on its assets in excess of the money needed to cover its operating expenses. Last year the Fed refunded almost $80 billion to the Treasury. In this sense, the bonds held by the Fed are literally money that the government owes to itself.

Unlike the debt held by Social Security, the debt held by the Fed is not tied to any specific obligations. The bonds held by the Fed are assets of the Fed. It has no obligations that it must use these assets to meet. There is no one who loses their retirement income if the Fed doesn’t have its bonds. In fact, there is no direct loss of income to anyone associated with the Fed’s destruction of its bonds. This means that if Congress told the Fed to burn the bonds, it would in effect just be destroying a liability that the government had to itself, but it would still reduce the debt subject to the debt ceiling by $1.6 trillion. This would buy the country considerable breathing room before the debt ceiling had to be raised again. President Obama and the Republican congressional leadership could have close to two years to talk about potential spending cuts or tax increases. Maybe they could even talk a little about jobs.

In addition, there’s a second reason why Representative Paul’s plan is such a good idea. As it stands now, the Fed plans to sell off its bond holdings over the next few years. This means that the interest paid on these bonds would go to banks, corporations, pension funds, and individual investors who purchase them from the Fed. In this case, the interest payments would be a burden to the Treasury since the Fed would no longer be collecting (and refunding) the interest.

This would be a change in plan for the Fed, the intent was to sell those bonds at a later date to soak up currency, but the same thing can be done by raising reserve requirements.

Needless to say, this won’t happen. It makes too much sense.

H/t Naked Capitalism.

5 July 2011, 7:42 PM

Even though Geithner has denied the rumors that he would be leaving, this hasn’t stopped unnamed sources for floating the names of potential replacements , and this scares the hell out of me:

Treasury Secretary Timothy Geithner would like to leave the Obama administration this fall if economic conditions are stronger and the debt ceiling debate is resolved in a timely manner, according to a person familiar with his thinking.

Possible replacements to be President Barack Obama’s top economic adviser, according to a senior administration official, include Erskine Bowles, White House chief of staff under President Bill Clinton, and Roger Altman, a prominent investment banker and former deputy Treasury secretary.

So, the front runners are two investment bankers, one of whom co-chaired the cat food commission and launched a full frontal assault on social security, with the hope of delivering that pot of money to Wall Street.

But if you think that the front runners are scary, just look at the B-team:

Jamie Dimon, chief executive of JPMorgan Chase, is considered a strong dark-horse candidate.Dimon has said he is not interested in public office but many on Wall Street believe he would accept the job if asked by Obama. But the White House will have to decide whether Dimon, who leads the most successful bank in the U.S., is too closely aligned with Wall Street.

Jamie F%$#ing Diamond. The man who whines because he doesn’t think that overpaid, incompetent, corrupt, immoral, and very very rich rat f%$#s are having their asses kissed enough?

Is there any limit to the extremes to which Barack Obama and His Clueless Minions^™ will go to put their tongues up the anuses of the banksters who have wrecked our economy?

It appears not.

Shoot me now!

4 July 2011, 5:26 PM

Not The Onion…

But this is satire:

In bid for attention, nation’s unemployed to launch failing investment bank

District of Columbia – In an effort to gain the support of political leaders, a coalition of unemployed Americans have filed paperwork to declare themselves the nation’s largest investment bank. Supporters of the planned financial institution hope the move will quickly curry Congressional favor, leading to a large-scale federal bailout of unemployed and underemployed workers.

…………

Read the rest, it is prize.

2 July 2011, 10:44 PM

Remember, the Banksters Own Our Asses

That’s why the Federal Reserve almost doubled the interchange fees that banks can charge on debit card swipes, despite the fact that the initial proposal was much higher than what is charged in other industrialized nations:

Responding to an outcry from financial institutions, federal regulators on Wednesday significantly increased a new limit on fees that large banks can charge to merchants for processing debit card purchases, and they delayed the implementation of the cap until October.

The Federal Reserve voted 4-1 to set the limit for so-called swipe fees at 21 cents per transaction, an increase from the 12-cent fee it proposed in December. That fee would have gone into effect next month for large banks with more than $10 billion in assets.

In addition, the Fed on Wednesday allowed debit card issuers to add a fee of .05% of each purchase to cover a portion of fraud losses. That would add 2 cents to a $40 purchase. And debit card issuers could add a 1-cent-per-transaction fee if they undertook tougher fraud prevention policies and procedures.

The Fed said the new fee for an average transaction would be 24 cents. That’s still a big decrease from the current average swipe fee of 44 cents.

BTW, that “outcry from financial institutions,” they refuse to happens every time someone tries to reduce the ability of the banksters to rob the general public, and the “Responding to”, means that the Fed really has no interest inhelping consumers, they just had to determine the least that they could do to avoid a sh%$ storm.

Ben Bernanke and the Federal Reserve can bite my shiny metal………

30 June 2011, 7:45 PM

Please, God, Let This Be True!

There are now rumors that Timothy Geighner will be resigning as Treasury Secretary after the debt ceiling dispute is resolved:

Treasury Secretary Timothy F. Geithner has signaled to White House officials that he’s considering leaving the administration after President Barack Obama reaches an agreement with Congress to raise the federal debt limit, according to three people familiar with the matter.

First, let me note that this is an interesting contruct, “according to three people familiar with the matter.”

Since when do reporters say how many anonymous sources that they are quoting?

The fact that Geithner has been the longest serving and worst of Obama’s economic advisers, (When you consider that Larry Summers is in the mix, it’s pretty mind boggling) it doesn’t bode well for whoever will replace him.

My suggestion would be to stop giving Wall Street a blow job, and appoint someone up to regulation, but the ‘Phants will filibuster them, so recess appoint someone who who has a history of pursuing fraud and abuse, though Republicans are suggesting that Obama, “Bring a CEO on board.”

So will Obama do the right thing, both politically and policy wise, or will he elect not to disturb the status quo, and engage in another pointless attempt to appease the Republicans?

I’m not an optimist.

29 June 2011, 6:51 PM

OCC Gives Another Monica to the Banks

How bad is this one?

It’s so bad that even Timothy Geithner’s Treasury Department finds it excessive:

The Treasury Department has unexpectedly allied with state regulators and consumer groups in their bid to force the Office of the Comptroller of the Currency to dial back its preemption standards.

The Obama administration sent a letter to the OCC this week objecting to a proposal that said Dodd-Frank left preemption standards mostly unchanged. But Treasury said the OCC was ignoring Congressional intent.

“Although Congress adopted a specific preemption standard in Dodd-Frank, the OCC’s rule articulates a preemption standard that is broader than the language of the Dodd-Frank standard,” Treasury General Counsel George Madison wrote to the OCC.

It is relatively unusual for federal agencies to weigh in on another regulators’ proposal, but even more rare in this case. The OCC is nominally a bureau of Treasury, but the administration has only limited oversight of the agency.

At issue is language used by the OCC to preempt state consumer protection laws. The agency has said it can preempt laws that “obstruct, impair or condition” the business of banking.

But those words were not part of the 1996 Barnett Supreme Court decision, which Dodd-Frank said should be the preemption standard.

In a proposal issued May 26, the OCC dropped the controversial language, but still said its previous rulings stood intact.

In his letter, Treasury’s Madison said that did not make sense.

“The proposed rule validates all prior preemption determinations, including those based on its deleted ‘obstruct, impair or condition’ standard,” Madison wrote. “In our view, this position is contrary to Dodd-Frank.”

Madison said the OCC was trying to ignore the law.

(Emphasis mine)

The fact here is that the head of the OCC’s term ended some time ago, and Obama has allowed the position of the Comptroller of the Currency to remain unfilled, he has not even proposed a successor, and allowed Acting Comptroller of the Currency John Walsh to continue in office when a recess appointment could put someone in place who might actually be interested in, well, you know, regulating.

Seriously, recess appoint someone who is not a corrupt sellout. Having the Treasury department call them names is not a proactive solution.