Not any banks, but we do have the 8th credit union closure of the year:
And here is the credit union closing:
- Electrical Workers #527 Federal Credit Union, Texas City, TX
May is proving to be a busy month.
Category: regulation
It’s Bank Failure Friday!!! (on Saturday)
And here they are, ordered, and numbered for the year so far.
- Central Arizona Bank, Scottsdale, AZ
This closing was odd, because it occurred on Tuesday, May 14. The last time we had a bank closing not on a Friday, it was Park Avenue bank in 2010, and it was closed because of fraud.
In this case, it appears that there may be some issues with the bank holding company, Capitol Bankcorp, which has been shedding subsidiaries for the past few years and this might be an issue of cross guaranty issues:
After controlling more than 50 banks at its peak, Capitol Bancorp has reduced its subsidiary count to 12 banks through intra-company mergers and divestitures to outside parties. Primarily, the mergers and sales are designed to raise capital or avert a failure. A failure of any one bank subsidiary could trigger the failure of all banking subsidiaries. Through statute referred to as Cross-Guaranty, the FDIC can demand reimbursement for the cost of a failure against any of Capitol Bancorp’s still open banking subsidiaries. To facilitate the divestitures, the FDIC has issued at least 16 Cross-Guaranty waivers. Some observers may question the cost effectiveness of issuing the waivers.
And here are the credit union closings:
- First Kingdom Community Federal Credit Union, Selma, AL
The 2nd quarter is showing a lot more activity than the 1st quarter did.
So, here is the graph pr0n with last years numbers for comparison (FDIC only):
This is a Feature, Not a Bug
At Salon, David Dayen observes that it, “Turns out much-hyped settlement still allows banks to steal homes,’ even after the much hyped mortgage settlement.
This is not an oversight. The Obama administration has aggressively allowed banks to cheat customers an investors since day one.
Basically, they see this as a way of making sure that the banks appear solvent.
See my writings on HAMP. Here is one quote:
Warren asked Geithner repeatedly about HAMP. After several evasions, Geithner said about the banks, “We estimate that they can handle ten million foreclosures, over time… this program will help foam the runway for them.”
By “them”, he means the banks.
By foaming the runway, he means that it allows them to delay writing down bad loans, and continue to extract payments and fees by cheating the public.
The suggestion that this is anything but deliberate policy is simply naive.
It’s Bank Failure Friday!!!
And here they are, ordered, and numbered for the year so far.
- Pisgah Community Bank, Ashville, NC
- Sunrise Bank,Valdosta, GA
And here are the credit union closings:
- Lynrocten Federal Credit Union, Lynchburg, VA
Something odd is going on. In the past 3 weeks, the number of banks failures have more than doubled.
So, here is the graph pr0n with last years numbers for comparison (FDIC only):
Obamacare Seems to be Working in Oregon
In Oregon, they have up exchanges that allow people to easily compare standard insurance policies, and as a result, premiums are falling:
This is what competition looks like: One health insurer wants to charge $169 a month next year to cover a 40-year-old Portland-area non-smoker. Another wants $422 a month for the same standard plan.
The new health insurance marketplace envisioned by federal health reforms doesn’t formally kick in until fall. But it already is taking shape – and consumers for the first time can compare, premium by premium, identical plans by different insurers.
Soon they’ll be able to compare benefit-by-benefit as well.
On Thursday, a comparison of proposed 2014 health premiums became public online, causing two insurers to request do-overs to lower their rates even before the state determines whether they’re justified.
The unusual development was sparked by a comparison that used to be impossible because plan benefits varied so widely. But under the federal reforms that take effect Jan. 1, health insurance is mandated and every insurer must offer certain standard plans.
Good, but somehow, I do not think that it’s going to last.
Expect to see an orgy of mergers and acquisitions, and inventive ways to collude to follow.
H/t John Aravosis.
Quote of the Day
How many times does a wolf in sheep’s clothing need to attack the flock before the shepherd notices?
—James Kelly in the comments on the Obama Administration’s decision to appeal a judge’s decision striking down their restrictions on Plan B birth control
Not a surprise though. Barack Obama’s history on reproductive rights has been profoundly ambivalent.
Fed Stays Course
So their quantitative easing program continues unabated:
The Federal Reserve said Wednesday that its economic stimulus campaign would press forward at the same pace it has maintained since December, putting to rest for now any suggestion that it was leaning toward doing less.
The Fed emphasized that it was ready to increase or decrease its efforts to spur growth and reduce unemployment as necessary, a more balanced position than it took earlier in the year, reflecting the reality that a strong winter has once again yielded to a disappointing spring.
It was the first time that the Fed had explicitly mentioned the possibility of doing more in a policy statement, although officials, including the Fed’s chairman, Ben S. Bernanke, have made the point repeatedly in public remarks.
………
The Fed maintained a relatively sunny economic outlook in its statement, released after a two-day meeting of its policy-making committee. It said that the economy was expanding at a “moderate pace” and that the labor market had shown “some improvement.” It added, however, that federal spending cuts were “restraining economic growth,” an implicit critique of the rest of the government.
That language was stronger than the Fed had used in previous assessments of the economic impact of fiscal policy. Fed officials have repeatedly expressed frustration that fiscal policy is working at cross-purposes with their own monetary policy. The statement also noted that the pace of inflation had slackened, a potential sign of economic weakness. Bringing the annual rate of inflation closer to its target of 2 percent has been a primary goal of the Fed’s four-year-old stimulus campaign, but the statement expressed little concern about the recent deceleration to a pace of only about half that level.
Yeah, calling out the entire deficit fetish in DC is a good thing too.
I still think that Bernanke’s mental exercise, dropping massive quantities of cash from helicopters, is the way to go.
Dropped from My Blogroll
Matthew Yglesias has been dropped from my blogroll.
He just wrote an article saying that it’s OK that all those people died in Bangladesh, it’s a choice made by “rational actors” to trade safety for jobs:
I think that’s wrong. Bangladesh may or may not need tougher workplace safety rules, but it’s entirely appropriate for Bangladesh to have different—and, indeed, lower—workplace safety standards than the United States.
The reason is that while having a safe job is good, money is also good.
Shades of Larry Summers suggesting that we ship toxic waste to Africa because they need the money.
The workers did not have a choice about safety. They knew that they, and their families, would face starvation if they got fired for not going into an unsafe building. The choice was made by their evil bosses.
This is a constant theme of his writing, and I am no interested in his faux liberal bullsh%$.
While there are people on my blogroll with who I profoundly disagree with because they provide insight into foreign view points.
Retired Maryland Republican hatchet man Joe Steffen, and Russian/Orthodox Christian Nationalist Stanislav Mishin are two such examples on my blogroll.
His view, which can best be described by the phrase, “Even the liberal The New Republic.”
It’s all about self-entitled white guys who never have to wonder about where their next meal is coming from play the Michael Kinsley counter-intuitive idiocy game in an attempt to prove how smart they are.
It’s dull, it’s predictable, it’s bereft of any real insight, and it’s off my regular reading list.
Awwww!!! Rick Perry’ Feelings are Hurt!!!!
Texas’ Business Climate in a Nutshell
So, following the fertilizer plant explosion that killed 14 people, Sacramento Bee cartoonist Jack Ohman accurately depicted the political-industrial of Texas, and Governor Rick Perry demanded an apology, and his butt boy/Lieutenant Governor David Dewhurst demanded that he be fired.
It really does amaze me just how much the “Real Men” of the Republican Party whine like little bitches when someone makes a reasoned critique of their policies.
It’s more than wimpy, it’s stupid.
No one but a few people in central California would have known about this cartoon if he hadn’t made an issue of it, but he just couldn’t let it slide.
I should thank him. I never would have seen the cartoon but for his foot in his mouth.
It’s Bank Failure Friday!!!
And here they are, ordered, and numbered for the year so far.
- Parkway Bank, Lenoir, NC
- Douglas County Bank, Douglasville, GA
It is just two weeks, so it could be an outlyer, but the number of bank failures have doubled in those two weeks, which is not a good thing.
So, here is the graph pr0n with last years numbers for comparison (FDIC only):
It’s Bank Failure Friday!!!
Daym!!! It;s been a busy week for bank regulators:
- First Federal Bank, Lexington, KY
- Heritage Bank of North Florida, Orange Park, FL
- Chipola Community Bank, Marianna, FL
And here are the credit union closings:
We went from 9 total failures for the year to 13. That’s a big bump
So, here is the graph pr0n with last years numbers for comparison (FDIC only):
Google Has Done the Impossible………
Google has made me want to be a German:
Google received an ultimatum Thursday from German consumer organizations that want it to start answering questions from its users via email.
The Federation of German Consumer Organisations (VZBV) has asked Google to sign an undertaking that it will provide customer service by responding individually to users questions sent by email, said Carola Elbrecht, VZBV’s project manager for consumer rights in the digital world at the VZBV.
Signing such a document would expose Google to fines if it breached the undertaking. On the other hand, said Elbrecht, “If Google does not sign it, we’re going to court.”
Germany’s Telemedia Act requires businesses to provide an email address to allow customers to contact them quickly.
But, said Elbrecht, “It is not enough to just provide an email address that leads into emptiness, you also need to be able to communicate over it.” Responding to users attempting to get their questions answered with automatic replies, as Google does in Germany, is not sufficient, she said.
Seriously, dealing with issues on Blogger, or Gmail, or pretty much any Google product, you have no way of contacting a human being.
Their response is “check out the forums and support pages.”
The forums are where people go when they don’t have the answers, and it’s exceedingly rare when a Google staffer deigns to read and answer a question, and the support pages are frequently incomplete and/or out of date.
Why Big Pharma is the Problem, not the Solution
In their never ending quest to extort rents from the rest of us, big pharma has a new tactic, it has established bogus “safety programs” that prohibit the sales of their drugs to generic manufacturers:
For decades, pharmaceutical companies have deployed an array of tactics aimed at preventing low-cost copies of their drugs from entering the marketplace.
But federal regulators contend the latest strategy — which relies on a creative interpretation of drug safety laws — is illegal.
The Federal Trade Commission recently weighed in on a legal case over the tactic involving the drug maker Actelion, and earlier this month a federal suit was filed in another case in Florida.
“We definitely see this as a significant threat to competition,” said Markus Meier, who oversees the commission’s health care competition team.
The new approach is almost elegant in its simplicity: brand-name drug makers are refusing to sell their products to generic companies, which need to analyze them so they can create the copycat versions. Traditionally, the generic drug makers purchased samples from wholesalers. But because of safety concerns, an increasing number of drugs are sold with restrictions on who can buy them, forcing the generic manufacturers to ask the brand-name companies for samples. When they do, the brand-name firms say no.
Brand-name companies say they are protecting themselves — and patients — in case the drugs are somehow used improperly. They say no law requires one company to do business with another.
Advocates for generic drugs say the practice could limit access to the low-cost drugs, which they say have saved more than a trillion dollars over the last decade. They say the companies that have most aggressively pursued the tactic tend to be those with drugs that are nearing the end of their patent life.
The problem is that Pharma can use its monopoly rents to continue to game the political system to f%$# the rest of us.
It needs to stop.
It’s Bank Failure Friday!!!
Just one bank failure:
- Gold Canyon Bank, Gold Canyon, AZ
So, here is the graph pr0n with last years numbers for comparison (FDIC only):
The numbers have dropped precipitously from the past few years.
The US Internet and Cable Last Mile in a Nutshell
H/t JR at the Stellar Parthenon BBS.
India Rejects Evergreening Pharmaceuticals
The Indian Supreme Court has rejected a patent for a slightly modified drug, on the basis that it was not a significant change.
The drug companies do this all the time, in order to extend their patents on drugs nearly indefinitely:
People in developing countries worldwide will continue to have access to low-cost copycat versions of drugs for diseases like H.I.V. and cancer, at least for a while.
Production of the generic drugs in India, the world’s biggest provider of cheap medicines, was ensured on Monday in a ruling by the Indian Supreme Court.
The debate over global drug pricing is one of the most contentious issues between developed countries and the developing world. While poorer nations maintain they have a moral obligation to make cheaper, generic drugs available to their populations — by limiting patents in some cases — the brand name pharmaceutical companies contend the profits they reap are essential to their ability to develop and manufacture innovative medicines.
Specifically, the decision allows Indian makers of generic drugs to continue making copycat versions of the drug Gleevec, which is made by Novartis. It is spelled Glivec in Europe and elsewhere. The drug provides such effective treatment for some forms of leukemia that the Food and Drug Administration approved the medicine in the United States in 2001 in record time. The ruling will also help India maintain its role as the world’s most important provider of inexpensive medicines, which is critical in the global fight against deadly diseases. Gleevec, for example, can cost as much as $70,000 a year, while Indian generic versions cost about $2,500 a year.
The ruling comes at a challenging time for the pharmaceutical industry, which is increasingly looking to emerging markets to compensate for lackluster drug sales in the United States and Europe. At the same time, it is facing other challenges to its patent protections in countries like Argentina, the Philippines, Thailand and Brazil.
“I think other countries will now be looking at India and saying, ‘Well, hold on a minute — India stuck to its guns,’ ” said Tahir Amin, a director of the Initiative for Medicines, Access and Knowledge, a group based in New York that works on patent cases to foster access to drugs.
………
In Monday’s decision, India’s Supreme Court ruled that the patent that Novartis sought for Gleevec did not represent a true invention. The ruling is something of an anomaly. Passed under international pressure, India’s 2005 patent law for the first time allowed for patents on medicines, but only for drugs discovered after 1995. In 1993, Novartis patented a version of Gleevec that it later abandoned in development, but the Indian judges ruled that the early and later versions were not different enough for the later one to merit a separate patent.
Leena Menghaney, a patient advocate at Doctors Without Borders, said that the ruling was a reprieve from more expensive medicines, but only for a while.
“The great thing about this ruling is that we don’t have to worry about the drugs we’re currently using,” Ms. Menghaney said. “But the million-dollar question is what is going to happen for new drugs that have not yet come out.”
Others decried the ruling, saying it was further evidence that India does not respect the intellectual property rights of pharmaceutical companies. Last year, India granted what is known as a compulsory license to a generic drug manufacturer to begin making copies of Bayer’s cancer drug Nexavar, and revoked Pfizer’s patent for another cancer drug, Sutent. Both companies have appealed the decisions.
First, evergreening does not serve to create new products, it encourages minor, non-functional, changes to existing products to maintain a monopoly.
Second, compulsory licensing is specifically allowed for under all major international IP and trade regimes.
Unfortunately, when you look at intellectual protections (IP) as property it means that the holder of that monopoly has a God given right to extract unreasonable rents forever.
There is no place where our patent system is more broken than in the evergreening of pharmceuticals, and that is saying a lot.
Horny Man Says That He Won’t Cum In Your Mouth
My bad, it’s actually a German banker saying that Euro Zone deposits are safe:
German Finance Minister Wolfgang Schaeuble has said savings accounts in the euro zone are safe, adding that Cyprus is a “special case” and not a template for future rescues.
In an interview with Bild newspaper published on Saturday, Schaeuble distanced himself from comments on Monday by Eurogroup chairman Jeroen Dijsselbloem, who said the rescue programme agreed for Cyprus – the first to impose a levy on bank deposits – would serve as a model for future crises.
“Cyprus is and will remain a special one-off case,” Schaeuble said.
“The savings accounts in Europe are safe.”
If you believe a German Finance minister right now, I have a bridge in Brooklyn that I want to sell you.
Just a “special case.” Yeah…Sure.
Pass the Popcorn
The high powered DC law firm Williams & Connolly has sued the OCC to get information about how they selected consulting firms to review the foreclosure settlement. Considering the half-assed job done by the consultants, and the indications that there were ties between the banks and the consultancies, this should get interesting”
A top Washington law firm is suing regulators to hand over information about how it selected consulting firms to participate in a multibillion-dollar review of banks’ past foreclosures.
The reviews, mandated by regulators in 2011 after widespread foreclosure shortcuts came to light, proved slow and expensive, and earlier this year 13 banks agreed to pay $9.3 billion to end them and compensate foreclosed borrowers.
But in a lawsuit in federal court in Washington, D.C., the law firm Williams & Connolly revisited the original reviews.
It is seeking documents explaining how the Office of the Comptroller of the Currency defined “independent” in its requirements for mortgage servicers to hire “independent consultants” to conduct the reviews.
The law firm declined to identify the client on behalf of which it filed the complaint.
It is possible that a consulting firm that lost out on the review contracts is behind the suit.
An OCC spokesman declined comment.
………
In the new lawsuit, Williams & Connolly said it had sought through a Freedom of Information Act request to the OCC any documents or records about the independence requirements for the consultants, and any documents about OCC standards for independence within the context of the foreclosure reviews.
The OCC initially denied the law firm’s request, then provided limited information on a redacted basis, the law firm said. The firm said in its filing that it went to court to obtain all of the information.
David Aufhauser, the Williams & Connolly lawyer who filed the action, and who is a former general counsel of the Treasury Department and of investment bank UBS, declined to comment on the case.
At least one of the consultancy firms was suspended, and if you follow Naked Capitalism you can get a full picture.
While one can generally be certain that any deal for the banks will be a corrupt bailout, when the Office of the Comptroller of the Currency is involved, you can be sure that it’s well over the line of what normal people will call corrupt self dealing.
I am looking forward to hearing more about this.
It Works, and It Saves the Taxpayer Money, So Let’s Make it Illegal
I am referring to the state-owned bank of North Dakota, which will be made illegal by the Trans-Pacific Partnership (TPP):
Clearly, from Wall Street’s perspective, the North Dakota bank must go, and all other state efforts to replicate it must be thwarted. Wall Street’s stealth weapon may be lodged within the latest corporate trade agreement called the Trans-Pacific Partnership (TPP), which currently is being negotiated in secret. We already know that Wall Street is seeking to remove all tariff restrictions that prevent the U.S. financial services industry from doing business in countries like Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The biggest banks also want the treaty to eliminate “non-tariff” barriers including regulations that create “unfair” competition with state-owned financial enterprises.
Depending on the final language, it is possible that the activities of the Bank of North Dakota could be ruled illegal because “foreign bankers could claim the BND stops them from lending to commercial banks throughout the state,” according to an analysis by Sam Knight in Truthout. How perfect for Wall Street: a foreign bank can be used as a shill to knock out the BND.
The nickel tour on BND is that it is a state-owned wholesale bank (it only makes loans to other banks), and the state keeps its money in an account there.
It generates significant savings, and significant savings for the taxpayer, and its senior executives are paid less than the President of the United States. (The most highly paid executive is paid about ½ that of POTUS.)
Also, the bank provides a financing alternative to bond sales managed by Wall Street firms.
Considering the Obama administrations neoliberal philosophies, along with its predilections toward direct and indirect government subsidies for the TBTF banks, I’m inclined to believe it. Particularly since that is what the Obama Administration’s point person is explicitly saying the trade agreement:
Publicly owned enterprises, for example, are being targeted by negotiators. One such entity in the United States that has been the subject of considerable interest in recent years is the Bank of North Dakota (BND) – the only fully publicly owned financial institution in the country. The BND, which is only allowed to lend wholesale, was a stabilizing force that helped keep the already energy-rich state insulated from the shock of the financial crisis (Alaska, for example, didn’t fare as well). It has also brought a small fortune to the state’s treasury – $340 million in net tax gain between 1997 and 2009. Legislators in at least 13 different states have proposed studying or emulating the North Dakota model – state-owned development of central-bank style institutions guaranteed by tax revenue. But if the TPP is passed, that option might not be available. [Chief TPP Negotiator for the Office of the US Trade Representative Barbara] Weisel said that State Owned Enterprises (SOE) are routinely “competing directly with private enterprises, and often in a way that is considered unfair.”
“Some of the advantages that can be conferred on State Owned Enterprises are things like preferential financing,” Weisel said. “Those are things that wouldn’t be provided to private companies – preferential provision of goods and services provided by a government.”
She said that “State Owned Enterprises – which in some cases can comprise a significant percentage of an economy – can be used to undermine what we’re otherwise trying to gain from this free trade agreement.”
What they are “trying to gain” with this agreement is to replace democracy with unregulated markets (aka looting).
Call your Congresscritter and tell him that you are absolutely opposed to the TPP.
You Phone Company is Refusing to Complete Rural Calls, and Deceiving Us About It
Telcom law maven Harold Feld shows how FCC Loopholes resulting from VOIP exceptions are destroying one of the central requirements of voice calls:
Increasing numbers of rural communities are reporting problems with incoming phone calls. Outgoing calls work fine, but when someone tries to call one of these rural communities from an urban area, the connection doesn’t go through.
Though the phone never rings in the rural community, the urban caller might hear a “false ringback” in his earpiece, inserted so he will think there’s simply no answer and won’t complain about the lack of service.
This “rural call completion” problem, which also includes connections with very bad sound quality, is getting scrutiny from the Federal Communications Commission.
The problem “causes rural businesses to lose customers, cuts families off from their relatives in rural areas, and creates potential for dangerous delays in public safety communications in rural areas,” according to the FCC.
………
In the last several years, businesses called “least cost routing” companies have sprung up. These companies promise phone networks to find the least expensive way to route their phone calls. The phone companies themselves don’t know how the least cost routing companies are routing the phone calls. They just trust them to do it.
Since completing calls to rural areas is expensive, least cost routers generally try to find long, complicated routes that will minimize the termination fees and other charges by making the call look like it comes from someplace with lower fees. This introduces something called “latency.” The lengthy routes mess up the IP-based phone call, causing long breaks in the signal that the traditional phone network (operated by a rural phone company) interprets as dead air or a disconnect.
………
The FCC refuses to classify IP-based services as “telephone” services (although it has the authority to do so). As a result, it can only regulate IP-providers indirectly with something called “ancillary authority.” Whether “ancillary authority” allows the FCC to regulate IP-based providers, such as least cost routers, remains to be seen.
The problem here is one of philosophy: the Washington consensus that deregulation always leads to innovation is a dangerous delusion.
We need only to compare the performance of our lightly regulated telcos to those of more highly regulated places like, Japan, France, or Korea, to see that consumers pay more, and get less, both in terms of performance and reliability.
Deregulation makes it easier to collect monopoly rents, and it is easier, and more lucrative to seek those rents than it is to succeed for innovation or evolutionary product improvement.
Every one gets screwed but the incumbent phone and cable companies, and it strangles real innovation.