Archive for May, 2010

“Are You Shitting Me?”

Senators who are ‘for the people’ overlooked in the financial reform process!

One look at the make-up of the Senate Conferees selected to work with the House to combine the two versions of financial reform into powerful, effective legislation, and we can kiss that notion good-bye!

There is little desire on the part of those chosen to help ‘the people,’ as evidenced by: their positions on many of the issues that are, or could be, part of the original bill, their votes in the past, and their campaign finance histories’.

Of the 12 members selected by the Senate, not a single powerful voice ‘for the people’ is a member of the conferencing process. Many of these Senators are outright or tacitly responsible for most of our financial problems.

What can we expect out of a group like this?

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Posted in Banking, Economy, Finance, Politics, Too Big to Bail | 1 Comment »

Quick Hit: “A Decent Month for FDIC!”

May was a good month for the FDIC and the Deposit Insurance Fund.

The 14 banks shut down by the bank overseer will only cost $830 million dollars.

This is a great victory after the disastrous April, when the Fund was drained of $9.5 billion. The largest foreclosure in May cost the Deposit Insurance Fund only $216 million.

Florida lost 3 more banks on Friday increasing their total failures to 29 since the beginning of 2008. Combined, the trio cost the DIF $203 million.

Troublesome and somewhat overshadowing the good news in May is the increase in the number of troubled institutions. Another 73 banks were added to the Watch List in the first quarter of 2010. There are now 775 banks under the watchful eye of the FDIC.

The quarterly number slowed considerably, but still increased. Combined with the positive numbers in May there is hope that the improvement is sustainable.

Sustainability is what is needed in this tenuous financial world.

We’ll keep a sharp eye on June and hope for the best!

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Posted in FDIC Foreclosures, Quick Hits | Comments Off

“A Half-Fast Bill and Premature Evacuation!”

Powerful Financial Regulation would be good for all Americans!

The Senate passed their version of financial regulation, (S.3217) ‘The Restoring American Financial Stability Act of 2010.’ It now moves to conference to be melded with the House Bill, (HR4173) officially called ‘The Wall Street Reform and Consumer Protection Act of 2009,’ which passed the House 223-202.

Majority Leader, Harry Reid, with the help of Democrats and a few Republicans, in a moment of premature evacuation brought a half-fast piece of legislation to the floor without addressing or revisiting some of the most important amendments up for consideration.

Despite passing with a vote of 59 to 39, the Bill is weak and falls far short of its potential of fixing a messed up banking system, economy, the gambling on derivatives, and the Federal Reserve. Several amendments were added to strengthen the bill, but some of the most important failed to pass or were not brought up for vote. And there is little hope that it will get fixed in Conference.

Conferencing of the Bill will be conducted by Senators Shelby, Chambliss, Lincoln and Representative Barney Frank and a few others. But is it salvageable?

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Posted in Finance, Wall Street | 5 Comments »

“An Eye Doctor with Tunnel Vision!”

Tea Party candidate, Rand Paul, not exactly what this country needs!

On Tuesday the Tea Party declared victory in Kentucky when their preferred candidate, Rand Paul, defeated Mitch McConnell’s chosen candidate, Trey Grayson, in the Republican Senatorial Primary.

Now the Republican Party must deal with a candidate they didn’t support. One that is really a Libertarian—a Republican with myopia. As the Republican Party struggles to redefine their platform and to develop a message that a mixed up base can believe in, they have the Tea Party to contend with. Paul soundly defeated Kentucky’s Secretary of State with 59% of the vote to Grayson’s 35%. Paul will now face Attorney General, Jack Conway, who narrowly defeated Lieutenant Governor Daniel Mongiardo, 44% to 43% in their primary contest.

A Rasmussen telephone survey of 500 likely voters, taken just one day after the election, shows Paul leading Conway by a margin of 25% (59% to 34%).

But is Paul the candidate for Kentucky? Is he for the kind of change this country needs?

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Posted in Election 2010, Politics, Republican Hopefuls, Tea Party | 1 Comment »

“Small Banks Reel, While Big Banks Steal”

Congress battles over financial reform while four more banks fail!

Congress, in its infinite wisdom, is allowing Big Banks to steal from ‘the people’ while regional and community banks fail at an accelerated rate.

Four more banks were closed by the FDIC last Friday bringing the total lost in the first two weeks of May to 8 and the 2010 total has increased to 72 bank failures.

As bank foreclosures edge closer to costing the taxpayers huge amounts of money, Senators like Judd Gregg, Mark Warner, and Bob Corker help ‘Too Big to Fail’ institutions slide their hands into customer’s pockets to steal their hard-earned cash.

The Big Banks, JP Morgan Chase, Bank of America, Citigroup, and several others borrow money from the Fed at 0%, buy America’s debt from The Treasury earning the spread in interest rates, making easy money at the expense of taxpayers. In return they give their customers very little interest on their savings and charge them outrageous fees after creating bogus, thieving rules designed only to extract money from their customers.

In other times in our history these actions were unethical and even criminal.

Yet our Congressional representatives are reluctant to pass laws to keep the banksters out of our pockets.

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Posted in Banking, Economy, Too Big to Bail | Comments Off

“Surrounded by Warning Signs!”

Could the stock market still feel the pain of a double dip?

The market had a huge scare last week which left Wall Street reeling!

Traders, analysts, and everyone on Wall Street are worried that this might not just be a glitch. They’re calling it a “flash crash” but it could be one of the many warning signs that the market is just two converging economic crises from a meteoric fall to a new bottom?

The new bottom—a more realistic bottom given all the band aids that have been applied to this economy—could be the second leg of the double dip. There is compelling evidence, largely ignored, that the March low of 6,547 could be tested again.

Despite the rising markets there has been a pall over the trading floors for sometime. And rightly so. The signs are there and they are many.

But does that indicate a double dip?

Last Thursday, David Hefty, CEO of Cornerstone Wealth Management appeared on Squawk On the Street and identified several of the huge warning signs that threaten the global markets.

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Posted in Economy, Markets, Wall Street | 1 Comment »

“One Fat Finger From Disaster!”

Living in a scary over-leveraged, under-capitalized global economy!

As everyone is well aware, on Thursday afternoon, panic struck like a lightning bolt on the trading floors of the stock markets.

Twenty minutes of feverish chaos exposed the vulnerability of the markets. World markets have embraced a model that teeters on tremendous risk. So much so that it has abandoned its purpose; its reason for existence. This leaves them vulnerable to the terrifying moves that occurred globally on Thursday.

Like the Big Banks, the markets have become giant casinos putting everyone’s money and financial stability at risk. That couldn’t have been more apparent than the meteoric fall near the end of the trading day on Thursday.

Some blame a ‘fat finger,’—a trader hitting a ‘b’ for billion instead of a ‘m’ for million—for triggering the events that sent markets spiraling to investment hell. But that wasn’t the only problem the market encountered in that brief, illuminating moment in time.

Human error could conceivably be at the center of Thursday’s sell-off, but technology could prove to be the market’s nemesis rather than its friend. Orders set in motion by high speed, market gaming, computers sent the market tumbling at a record pace as each triggered event triggered another round of events. The two, individually or together, may be the nexus for the eventual destruction of global markets. For whatever reason stocks went on that wild ride, it created a lot of excitement on the trading floors.

So what do investors do after such a frightening occurrence?

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Posted in Economy, Markets, Wall Street | Comments Off

“Senate Votes for Big Banks and Against the People!”

The People vs. Big Banks! Who won the vote in the Senate last week?

Last Thursday night the Senate voted on an important amendment for ‘the people’ of this country—protecting the American people from predatory banks. The amendment (Brown (OH) amdt. No. 3733) to Restoring American Financial Stability Act of 2010, would impose leverage and liability limits on bank holding companies and financial companies. Essentially a controlled method of separating the banks and protecting depositors and investors—‘the people.’

There are many reasons to break up the Big Banks and those are discussed in greater detail in “Break ’em Up!” But mostly it’s because of what the banks continue to do to middle-class Americans with impunity.

Surely the Senate voted in favor of their constituents?

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Posted in Banking, Politics, Too Big to Bail | 2 Comments »

“Break ‘em Up!”

There are many reasons why we need to break up the behemoths of finance!

The taxpayers saved their affluent asses. The Big Banks, along with their highly compensated executives, were headed over the cliff with nothing to stop their fall, and we bailed them out!

Break ’em Up!

Congress, in a panic, saw fit to give taxpayer dollars to the self-destructive creators of the financial crisis to prevent a catastrophic meltdown of the U.S. economy, without even asking us.

We’re told over and over that TARP was successful, that Congress’ decisive actions saved the economy and that we should be eternally grateful. We’re reminded that the Big Banks are again stable. They’re back to making billions of dollars—and the economy is improving.

For whom?

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Posted in Banking, Economy, Too Big to Bail | Comments Off

“For FDIC: April Showers Become Torrential Downpour”

Twenty-three Banks Seized in April

March went out like a lion, April came in like a lamb for the FDIC. But after the first two weeks of April…

All Hell broke loose,

In March, 19 banks were closed by the Federal Deposit Insurance Corporation. In the first two weeks of April the FDIC had to take over only 1 bank, a sign that things might be improving. But there were three more weeks in the month and they were disastrous for the FDIC and for their Deposit Insurance Fund. What started out so quietly ended with 23 bank foreclosures by the end of the month bringing this year’s total to 64.

Yesterday the 7 closures included 3 large banks in Puerto Rico. The week before all 7 banks taken over were in Illinois and the previous week 3 Florida and 2 more California banks were among the 8 banks seized.

Since the beginning of 2008, just over two years, 229 banks, young and old, large and small, urban and rural have been lost. No financial institution has been immune to the virility of this crisis

How much damage did April do to the banking system?

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Posted in Banking, Economy, FDIC Foreclosures | 3 Comments »