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Senator Dodd has suggested that the Consumer Financial Protection Agency be housed with the Federal Reserve Board… yet, despite having all the power needed to stop the mortgage debacle, it was never able stop that train wreck. Why trust it to do more in the future?
The muttering over regulation sounds like putting the cart before the horse.
(more...)How close are we to being back to square one with impending mortgage meltdowns? According to SNL Financial, much closer than anyone would like to think. It has gotten a hold of an updated version of the original 2007 Credit Suisse chart that such caused a stir at that time. It’s reprinted below along with a few of SNL’s thoughts on the matter.
(more...)It’s been declared countless times in the mainstream media that the economy has recovered. The US is out of recession and good times are back again. Yet, there is plenty of data to support that this is not the case. Seven of the top warning signs that the US economy may be hitting a wall are highlighted below.
(more...)The non-recovery seems to be gathering momentum. Almost every day we receive fresh evidence of economic non-growth and non-vitality.
It’s true; the economy does manage to get out of bed every morning. Some folks applaud this fact and declare, “Aha! A recovery!” Other folks, like your California editor, observe that the economy usually crawls right back into bed after brushing its teeth. Your editor sees no recovery. He sees a coach potato with a very bright smile. He sees an economy that still lacks essential qualities like jobs, corporate revenue growth and credit.
(more...)A new projection is now showing that roughly 1,000 US banks may fail because of the financial crisis that uncovered the toxic assets hidden on bank balance sheets.
According to Reuters:
“James Dunne, senior managing principal of Sandler O’Neill, said 300 to 400 banks could be seized this year, especially as institutions start to deal with deteriorating commercial real estate loans.
(more...)FICO, the outfit that computes your vaunted “credit score,” has just noticed that consumers with high scores are more likely to default on their mortgages than their credit cards.
Last year, the firm says, folks with FICO scores of 760 or higher defaulted on real estate loans at three times the pace they defaulted on plastic.
(more...)Matt Taibbi of the Rolling Stone has released his latest rant against Wall Street’s dirty dealing, and it’s a doozy. The pummeling of financial markets as a result of the crisis has done little to stave off Wall Street’s insatiable greed… and has instead done a great deal to amplify the creativity of banks to find new ways to extract profit from easy prey like the bumbling or complicit US government and the blindsided US taxpayer.
(more...)Over 700 banks in the US are distressed according to the FDIC, the largest number since 1993. The latest additions to the “problem list” are largely resulting from commercial real estate loans gone sour. The FDIC anticipates bank difficulties continuing to worsen in 2010 before there’s any chance of the situation beginning to improve.
(more...)So many explanations have been offered for the financial crisis, then reheated and reexamined, that it’s nearly impossible to imagine a new theory worth considering. However, Jeffrey Friedman of the Cato Institute has found one. He looks at a little-discussed regulatory mechanism that incentivized banks to put a disproportionate share of capital into what turned out to be some very toxic assets.
(more...)This was a surprising concept to come across in the Wall Street Journal… the “shadow government, the financial industrial complex.” Yet, what sounds at first like conspiracy theorizing is actually a sound criticism of the fact that the US government has basically ignored the lessons of the financial crisis and is more or less gearing up for a round two.
(more...)Right now there are an awful lot of banks that do an awful lot of commercial real estate lending, and for about a year now you’ve been telling me that you saw the first and second quarter of 2010 as being particularly risky for commercial real estate. Why this year, and what do you see happening with these loans and the banks holding them?
(more...)Right now there are an awful lot of banks that do an awful lot of commercial real estate lending, and for about a year now you’ve been telling me that you saw the first and second quarter of 2010 as being particularly risky for commercial real estate. Why this year, and what do you see happening with these loans and the banks holding them?
(more...)