Headlines...
- Thread starter effenheimer_IHB
- Start date
NEW -> Contingent Buyer Assistance Program
I swiped this from a link in the comments on CalculatedRisk. It's from another blog post that can be found at The Collection Agency.
Essentially, the Federal Reserve estimates that 150% of Depository Instutions reserves are borrowed from the Fed itself... making them technically insolvent. IR, awgee, graphrix... anyone really... can you check out the link and confirm this so I can make the call on the cash in my accounts?
Edited to add the following from the Wall Street Journal site (subscription needed so here's the text):
"FDIC Readies for a Rise in Bank Failures
By DAMIAN PALETTA
February 26, 2008
WASHINGTON -- The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen.
The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis.
• Out of Retirement: The FDIC is recruiting 25 of its retirees experienced in handling insolvent financial institutions.
• The Reasoning: The agency is preparing for an increase in failed financial institutions as the housing and credit markets worsen.
• What's Next: The FDIC will give an update today on the number of "problem" institutions that regulators are watching most closely.FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas.
The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement.
Behind the Scenes
In public, policy makers are debating what role the government should play in trying to stabilize the housing market and minimize foreclosures. Meanwhile, regulators have worked discreetly behind the scenes to closely monitor the growing number of troubled banks and thrifts considered at risk.
"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group.
In job postings on its Web site, the FDIC said it is looking for people with "skill in performing duties associated with a financial-institution closing, such as receivership management, resolutions and/or asset disposition; knowledge of the resolutions process as it relates to complex financial institutions." Such positions would require "very frequent overnight travel," the posting said, and would pay up to $180,770.
"The notion of bringing back some people who have been through it before is very smart," said William Isaac, who was FDIC chairman from 1981 until 1985. All told, the FDIC has roughly 4,600 employees, far fewer than the about 15,000 it had as recently as 1992.
On Sunday, the FDIC ran a newspaper ad seeking companies that could service commercial loans, mortgages and student loans in the event of a bank failure. It didn't say how much a company could earn in this area.
The FDIC rated 65 banks and thrifts as "problem" institutions at the end of the third quarter of 2007, up from 47 institutions a year earlier. Both figures are low by historical standards. At the end of 1993, there were 572 "problem" banks and thrifts. The FDIC is expected to update its data on "problem" institutions today.
Before the housing market soured, the banking industry was enjoying one of its most profitable stretches in U.S. history. There wasn't a single bank failure from July 2005 through January 2007, an unprecedented span.
There have only been four bank failures in the past 12 months, a rate the FDIC has easily been able to handle.
Weakening Performance
In many parts of the country, the housing-market decline has hamstrung banks, and regulators have reported weakening performance of commercial real estate, small business and credit-card loans. Exacerbating the situation is a cash-flow crunch, which makes it harder for banks to obtain funding to originate new loans.
FDIC Chairman Sheila Bair, Comptroller of the Currency John Dugan and Office of Thrift Supervision Director John Reich have warned of a pickup in bank failures. Last week, Mr. Reich reported that the thrift industry lost a record $5.2 billion in the fourth quarter.
The FDIC was created by Congress in the 1930s after a series of bank runs during the Great Depression. At the end of 2007, it had $52.4 billion in its fund that backstops the nation's insured deposits.
One major difference between now and the savings-and-loan crisis is that most banks today are well-capitalized, giving them a cushion against unexpected losses. Still, banks could burn through their capital if they ran into trouble.
Write to Damian Paletta at damian.paletta@dowjones.com"
According to the FDIC website, the job posting went up last week, with a window of 2/20 to 2/28 for application submission.
Daedalus_IHB
New member
effenheimer_IHB
New member
profette_IHB
New member
Top economists see signs of recession
"Because of all the bad news, more and more economists foresee the country falling into a recession, according to the latest survey by the National Association for Business Economics.
The group said in a report being released Monday that 45 percent of the economists on its forecasting panel expect a recession this year. In September, only one in four economists was pessimistic enough to put the chance of a recession at 35 percent or higher..."
Existing Home Sales Hit 9-Year Low
WASHINGTON (AP) -- Sales of existing homes fell to the lowest level in nearly a decade in January while the median price for a home dropped for the fifth straight month.
The National Association of Realtors said Monday that sales of single-family homes and condominiums dropped by 0.4 percent last month to a seasonally adjusted annual rate of 4.89 million units, the slowest sales pace on records going back to 1999...
But, wait, there's more...
More bad newsfor the financial sector came when Goldman Sachs (GS: 176.27, -1.44, -0.81%) downgraded Fannie Mae (FNM: 28.58, -0.14, -0.48%), Freddie Mac (FRE: 26.55, -0.06, -0.22%) and Washington Mutual (WM: 16.44, -0.46, -2.72%) to “sell” today. The downgrades come as Goldman says the housing slump is only half over and punitive industry legislation could be on its way from Congress.
"Because of all the bad news, more and more economists foresee the country falling into a recession, according to the latest survey by the National Association for Business Economics.
The group said in a report being released Monday that 45 percent of the economists on its forecasting panel expect a recession this year. In September, only one in four economists was pessimistic enough to put the chance of a recession at 35 percent or higher..."
Existing Home Sales Hit 9-Year Low
WASHINGTON (AP) -- Sales of existing homes fell to the lowest level in nearly a decade in January while the median price for a home dropped for the fifth straight month.
The National Association of Realtors said Monday that sales of single-family homes and condominiums dropped by 0.4 percent last month to a seasonally adjusted annual rate of 4.89 million units, the slowest sales pace on records going back to 1999...
But, wait, there's more...
More bad newsfor the financial sector came when Goldman Sachs (GS: 176.27, -1.44, -0.81%) downgraded Fannie Mae (FNM: 28.58, -0.14, -0.48%), Freddie Mac (FRE: 26.55, -0.06, -0.22%) and Washington Mutual (WM: 16.44, -0.46, -2.72%) to “sell” today. The downgrades come as Goldman says the housing slump is only half over and punitive industry legislation could be on its way from Congress.
lawyerliz_IHB
New member
Wait a minute, GS sells securitized mtges, shorts them, and also issues recommendations on whether to buy or sell the institutional numbskulls who bought them Or, in the case of Fannie and Freddie, buy and pool mtges. This is conflict of interest cubed.
Why would anyone take anything they say or do seriously, except to try to avoid being stomped on?
Why would anyone take anything they say or do seriously, except to try to avoid being stomped on?
Anonymous_IHB
New member
lawerliz - "All your base are belong to us"
http://money.cnn.com/2006/05/30/news/economy/snow_replacement/
"President Bush on Tuesday named Goldman Sachs CEO Henry Paulson to be the next Treasury Secretary..."
http://www.bloomberg.com/apps/news?pid=20601109&refer=news&sid=a.y.CZN21MOY
"Goldman Sachs Group Inc., the investment bank that has groomed executives for top government jobs around the world, just added Canada to the list. "
(Timewaster for those wonder what the "All your base are belong to us" thing is - http://www.newgrounds.com/collection/allyourbase.html)
http://money.cnn.com/2006/05/30/news/economy/snow_replacement/
"President Bush on Tuesday named Goldman Sachs CEO Henry Paulson to be the next Treasury Secretary..."
http://www.bloomberg.com/apps/news?pid=20601109&refer=news&sid=a.y.CZN21MOY
"Goldman Sachs Group Inc., the investment bank that has groomed executives for top government jobs around the world, just added Canada to the list. "
(Timewaster for those wonder what the "All your base are belong to us" thing is - http://www.newgrounds.com/collection/allyourbase.html)
Anonymous_IHB
New member
From the New Deal, a Way Out of a Mess
http://www.nytimes.com/2008/02/24/business/24view.html?_r=1&scp=1&sq=alan+blinder&st=nyt&oref=slogin
http://www.nytimes.com/2008/02/24/business/24view.html?_r=1&scp=1&sq=alan+blinder&st=nyt&oref=slogin
Anonymous_IHB
New member
Distressed homes 31.6% of O.C. supply
http://mortgage.freedomblogging.com/2008/02/25/foreclosure-supply-225/
http://mortgage.freedomblogging.com/2008/02/25/foreclosure-supply-225/
Anonymous_IHB
New member
Kind of an interesting snapshot of public awareness/mood, here are housing related headlines on msn.com amonst the Oscar links and such. The third headline is interesting - save a million? What save?! No hot stock or housing tip to do that for me?
Today's pics - "Lenders cutting off cash to homeowners"
MSNBC News - "Home sales, prices fall again"
Money - "Retiring rich: Save a million at any age"
Today's pics - "Lenders cutting off cash to homeowners"
MSNBC News - "Home sales, prices fall again"
Money - "Retiring rich: Save a million at any age"
Anonymous_IHB
New member
Ha ha - the saving headling only lasted 1 minute, it's now "Bond insurer's big news triggers rally" with a glowing, positive looking up arrow next to it. Saving's not the man yet....
southoctracker_IHB
New member
CNBC video talking housing...they don't buy the NAR saying a bottom is here/near
Nude_IHB
New member
I swiped this from a link in the comments on CalculatedRisk. It's from another blog post that can be found at The Collection Agency.
Essentially, the Federal Reserve estimates that 150% of Depository Instutions reserves are borrowed from the Fed itself... making them technically insolvent. IR, awgee, graphrix... anyone really... can you check out the link and confirm this so I can make the call on the cash in my accounts?
Edited to add the following from the Wall Street Journal site (subscription needed so here's the text):
"FDIC Readies for a Rise in Bank Failures
By DAMIAN PALETTA
February 26, 2008
WASHINGTON -- The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen.
The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis.
• Out of Retirement: The FDIC is recruiting 25 of its retirees experienced in handling insolvent financial institutions.
• The Reasoning: The agency is preparing for an increase in failed financial institutions as the housing and credit markets worsen.
• What's Next: The FDIC will give an update today on the number of "problem" institutions that regulators are watching most closely.FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas.
The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement.
Behind the Scenes
In public, policy makers are debating what role the government should play in trying to stabilize the housing market and minimize foreclosures. Meanwhile, regulators have worked discreetly behind the scenes to closely monitor the growing number of troubled banks and thrifts considered at risk.
"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group.
In job postings on its Web site, the FDIC said it is looking for people with "skill in performing duties associated with a financial-institution closing, such as receivership management, resolutions and/or asset disposition; knowledge of the resolutions process as it relates to complex financial institutions." Such positions would require "very frequent overnight travel," the posting said, and would pay up to $180,770.
"The notion of bringing back some people who have been through it before is very smart," said William Isaac, who was FDIC chairman from 1981 until 1985. All told, the FDIC has roughly 4,600 employees, far fewer than the about 15,000 it had as recently as 1992.
On Sunday, the FDIC ran a newspaper ad seeking companies that could service commercial loans, mortgages and student loans in the event of a bank failure. It didn't say how much a company could earn in this area.
The FDIC rated 65 banks and thrifts as "problem" institutions at the end of the third quarter of 2007, up from 47 institutions a year earlier. Both figures are low by historical standards. At the end of 1993, there were 572 "problem" banks and thrifts. The FDIC is expected to update its data on "problem" institutions today.
Before the housing market soured, the banking industry was enjoying one of its most profitable stretches in U.S. history. There wasn't a single bank failure from July 2005 through January 2007, an unprecedented span.
There have only been four bank failures in the past 12 months, a rate the FDIC has easily been able to handle.
Weakening Performance
In many parts of the country, the housing-market decline has hamstrung banks, and regulators have reported weakening performance of commercial real estate, small business and credit-card loans. Exacerbating the situation is a cash-flow crunch, which makes it harder for banks to obtain funding to originate new loans.
FDIC Chairman Sheila Bair, Comptroller of the Currency John Dugan and Office of Thrift Supervision Director John Reich have warned of a pickup in bank failures. Last week, Mr. Reich reported that the thrift industry lost a record $5.2 billion in the fourth quarter.
The FDIC was created by Congress in the 1930s after a series of bank runs during the Great Depression. At the end of 2007, it had $52.4 billion in its fund that backstops the nation's insured deposits.
One major difference between now and the savings-and-loan crisis is that most banks today are well-capitalized, giving them a cushion against unexpected losses. Still, banks could burn through their capital if they ran into trouble.
Write to Damian Paletta at damian.paletta@dowjones.com"
According to the FDIC website, the job posting went up last week, with a window of 2/20 to 2/28 for application submission.
lendingmaestro_IHB
New member
awgee_IHB
New member
Nude - I posted a different version of this info a couple days ago. If I can find it, I will post the link again. I don't think this makes them "technically" insolvent. It makes them insolvent. I am not trying to be argumentative, but I think the distinction is important.
Aww, found it on the "I wanna be a bond vigilante thread". All the best info goes there first.
http://financialsense.com/fsu/editorials/andros/2008/0215.html
Aww, found it on the "I wanna be a bond vigilante thread". All the best info goes there first.
http://financialsense.com/fsu/editorials/andros/2008/0215.html
IrvineRenter_IHB
New member
awgee,
Since banks create money from nothing, when banks become insolvent, what is the difference when the FED creates money from nothing and loans it to them? Isn't bank solvency in our system just an illusion anyway? If there was a run on a bank, wouldn't the Federal Reserve just print more money and loan it to the afflicted bank, even if it was every bank?
I am no trying to be argumentative, but it seems to me Ben and his printing press can create money to solve any insolvency problem, unless there is some limitation to the FEDs ability to create money I am not aware of. With the deflationary pressures we are seeing, even Ben's printing press is probably not going to make us need wheelbarrows full of money to go buy bread.
Am I missing something?
Since banks create money from nothing, when banks become insolvent, what is the difference when the FED creates money from nothing and loans it to them? Isn't bank solvency in our system just an illusion anyway? If there was a run on a bank, wouldn't the Federal Reserve just print more money and loan it to the afflicted bank, even if it was every bank?
I am no trying to be argumentative, but it seems to me Ben and his printing press can create money to solve any insolvency problem, unless there is some limitation to the FEDs ability to create money I am not aware of. With the deflationary pressures we are seeing, even Ben's printing press is probably not going to make us need wheelbarrows full of money to go buy bread.
Am I missing something?
awgee_IHB
New member
I do not see your points as argumentative, nor do I think you are missing anything. My read is pretty much the same.
There is no difference between the Fed creating money electronically or the member banks creating money through the fractional reserve system. There are no legal limits as to how much money Bernanke can create, nor is the Federal Reserve accountable to anybody. The Federal Reserve is not accountable to Congress or the president or the member banks. It is accountable to nobody and can print as much as it sees fit.
I would tend to think that bank solvency in a fractional reserve system using fiat currency is an illusion. And an intentional illusion foisted upon the American citizenry. If there are runs on the banks, the FDIC will payout, and when the FDIC runs out of currency, the Fed can "loan" the FDIC more. Isn't the FDIC a division of the Federal reserve? But, runs on banks do not have to look like people lined up outside the door. 99.9% of all funds are now transfered electronically.
There is no law saying that our economic system can not experience monetary deflation while experiencing price inflation. I would argue that is exactly what we are experiencing right now. And price inflation does not necessitate wage inflation. Why do folks assume that anyone would have a wheelbarrow full of money? Giving money to the member banks does not mean that money will flow to wages or consumers. It does not even mean that the banks can retain the funds.
Please know that I do not intend to be argumentative either. I am just giving my two cents worth. What will that buy?
There is no difference between the Fed creating money electronically or the member banks creating money through the fractional reserve system. There are no legal limits as to how much money Bernanke can create, nor is the Federal Reserve accountable to anybody. The Federal Reserve is not accountable to Congress or the president or the member banks. It is accountable to nobody and can print as much as it sees fit.
I would tend to think that bank solvency in a fractional reserve system using fiat currency is an illusion. And an intentional illusion foisted upon the American citizenry. If there are runs on the banks, the FDIC will payout, and when the FDIC runs out of currency, the Fed can "loan" the FDIC more. Isn't the FDIC a division of the Federal reserve? But, runs on banks do not have to look like people lined up outside the door. 99.9% of all funds are now transfered electronically.
There is no law saying that our economic system can not experience monetary deflation while experiencing price inflation. I would argue that is exactly what we are experiencing right now. And price inflation does not necessitate wage inflation. Why do folks assume that anyone would have a wheelbarrow full of money? Giving money to the member banks does not mean that money will flow to wages or consumers. It does not even mean that the banks can retain the funds.
Please know that I do not intend to be argumentative either. I am just giving my two cents worth. What will that buy?