Archive for the ‘bank bailouts’ Category
This should be good for Confidence, especially after Monti (Hall?) was running around telling everyone that Italy was “just fine” and “didn’t need help.”
LOS CABOS, Mexico, June 19 (Reuters) – Italy put forward a proposal at a G20 summit in Mexico on Tuesday for the euro zone’s rescue funds to start buying the debt of distressed European countries, and the idea is expected to be discussed at a meeting of leaders in Rome on Friday.
The Italian proposal foresees using the EU’s rescue funds, known as the EFSF and the ESM, to buy bonds of countries such as Spain and Italy in the secondary market to help bring down bond yields and lower refinancing costs.
So we’ve gone beyond “liar liar pants on fire!” to “and behind Door #1 we have….”
You know the jackass is back there too.
I’m well beyond the point where I register surprise — say much less shock — when “leaders” get caught lying like this by their own hand. We’re into this odd Kafkaesque realm where the bigger the lie the more it is believed, where Presidents of drunk nations prescribe cases of whiskey for the pounding headache and puke-fest taking place the next morning and where the citizens wave multi-colored flags pretending that John and Steve’s public expression of intent to screw each other in the ass or Jeff’s desire to smoke a joint on the courthouse steps is the most-important issue in the upcoming election.
Pass that whiskey please, it will make me forget that I’m broke and the only calories down my pie hole in the last 72 hours have been ethanol-based — and liquid! Oh, it will also make me forget the hemorrhoids from last night’s boffing too – and where did I put that joint?
Yeah. This is what passes for “political discourse” on the issues of the day. Blatantly unconstitutional usurpations of power by the President (under the guise of “prosecutorial discretion”) either garners no comment (from Romney) or worse, a plan to do even more unconstitutional things (by Wayne Root) in response. Nobody raises the quite-simple point that a person who’s first act upon entry to the United States was to break the law should not be rewarded, as whatever behavior you reward in the law you will get more of!
Never mind that the nation’s economy has collapsed (not “is about to collapse”) and is being propped up by explicit debasement of everyone’s wealth through government deficit spending — a path that will eventually lead to the collapse of the government itself if it continues for too long, and for every day it goes on it increases the economic damage that must be recognized to “detox” from our credit-induced craze.
As such the morning news flow, including this little tidbit from the G-20, no longer elicits even a wry smile from me. I do, however, take some solace in the fact that yesterday Bloomberg finally came around to the idea of sound(er) banking and had the audacity to publish it — a drum I’ve been beating on since The Ticker began publication.
It’s been a lonely five years, but this morning, as I sip my coffee in expectation of the heroin dealerextraordinaire, Ben Buttafackie himself, pontificating on how we shall all be fine if we just take another slug of that case of whiskey, I will ponder whether that tiny second drumbeat from Bloomberg yesterday might — just might — turn into a cacophony of sufficient volume to halt that which, at this point, appears inevitable.
Incidentally, if you are in the Orlando area I am speaking this evening at The 2012 Business Convention and Expo of The Deaf at 7:30 PM.
This is truly amazing. It appears that at least some of the Irish people are starting to wake up to the reality of just what these ‘bailouts’ are accomplishing. Watch as this journalist is demanding an answer to a simple, straightforward question and the banker basically looks down his nose and smirks at him and the rest of the peasants. Make no mistake, this is how they look at all of us. They don’t believe they owe us any answers and they believe they are entitled to bailouts funded on the backs of taxpayers. It truly is the biggest welfare program in the history of mankind.
This won’t stop until the people demand:
STOP THE LOOTING & START PROSECUTING!
Or it stops when we finally all have no jobs, no homes and no food – which ever comes first. Choose carefully.
If one is wondering why Greece Finance Minister Venizelos is scrambling to pass the proposed bill which enacts Greek Bailout #2, without any debate or details, very much like the US Attorneys General passed the robosigning settlement without a robosigning settlement even having been inked, the following excerpt from Section E of the MoU between Greece and the Troika should explain it. Because heaven forbid someone actually ask for details as to just what ‘€[xxx]‘ of future funding needs over and above the €320 billion in committed funding means in practical terms, i.e., just how lower the minimum wage is going, how many million more jobs will be lost (in a population of just 11 million), and how soon until pension and retirement benefits go negative. Also, our German friends may be interested to know that funding 136% of Greek GDP in the form of endless “bailouts” (of which 81% goes to shore up bank balance sheets), is just the beginning. We are confident our German PM friend is more than aware of this exit clause which gives her the loophole to opt out of everything all over again.
Look folks, it’s simple — what the IMF wants, what the banksters want, here, there, everywhere, is the same thing: Your money, as much as they can get, and they don’t care what happens to you.
Austerity policies are now widely regarded as having failed, and this failure is increasingly obvious in the country elected to act as Austerity’s Child. The banking collapse, and the legacy bequeathed by the Irish state’s extraordinary September 2008 bank guarantee, has seen society in Ireland reshaped as a petri dish for IMF, European commission and ECB experimentation. Successive waves of cuts have been stipulated by the Troika in return for its loans, but implemented without resistance, and arguably, a degree of enthusiasm, by the two governments of the “post-sovereign” era.
Yep. I said originally that Ireland should give the finger to the banksters, and if the government refused then the people should give the finger to the government, ejecting and replacing it.
What is “give the finger”?
Simple; you tell them this: You made a bad loan, you’re going to eat it. Period.
Yes, I know, pension funds and others bought the paper. Guess what — they did no diligence (or insufficient diligence) and they’re going to lose money as a result. That’s what’s supposed to happen when you do something stupid!
In point of fact it is the only way by which the market works. When you do smart things you make money. When you do dumb things you lose money. When you do really stupid things you go bankrupt.
There’s still time Ireland. Tell the banksters to get stuffed. Right here, right now.
As for Europe, same deal among their governments — including Greece. Tell the banksters to go to Hell.
As for here? Same deal. Got a loan out and are you tired of the “ethics” of these firms? Consult a tax and legal advisor, find out what can be done to you (if anything) if you tell them to go to Hell, and if that’s the correct business decision then tell them to blow their alleged debt out their ass.
Note carefully folks: American Airlines — a big corporation — just did exactly that.
They filed a preemptive bankruptcy to avoid paying for things they had agreed to pay for because they determined it was no longer to their advantage to do so.
WAKE UP IRELAND. WAKE UP GREECE.
And wake up AMERICA and AMERICANS.
There is NO moral obligation to pay. There is only the ability (or not) to enforce a contract.
The First National Bank of Florida, Milton, Florida, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with CharterBank, West Point, Georgia, to assume all of the deposits of The First National Bank of Florida.
All fine, right? All insured depositors are protected, we’re all ok.
Yes, from that point of view – so far.
So what’s the problem, you ask? Right here:
As of June 30, 2011, The First National Bank of Florida had approximately $296.8 million in total assets and $280.1 million in total deposits. In addition to assuming all of the deposits of the failed bank, CharterBank agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $46.9 million. Compared to other alternatives, CharterBank’s acquisition was the least costly resolution for the FDIC’s DIF.
Let’s “do the math.”
As of June 30th, less than three months ago, if you believe this bank’s balance sheet the institution had an excess capital position (that is, assets .vs. liabilities) of 5.96%. That is, it had 6% more assets than liabilities and thus was (almost) within regulatory capital minimums.
Today, we are told that the FDIC is going to lose $46.9 million on this transaction.
In order for the reported balance sheet to be true the bank had to lose $16.7 million (its entire surplus) plus the $46.9 million the FDIC is now going to lose in less than three months.
That is, it had to lose $63.6 million in asset valuation in three months or about 22% of it’s asset value.
Note that this institution has been claimed to be “troubled” for quite some time with non-performing loans.
If you believe that the alleged balance sheet presented on June 30th of this year was materially accurate in all respects as to the valuation of those assets, and that in less than three months time the bank lost 22% of its asset value and thus placed the FDIC in the position of losing $46.9 million on this transaction you’re dumber than a box-o-rocks.
If you want to know why bank stocks are collapsing around the world and why credit markets are at risk of another seizure, you need only look right here for the reason. 12 USC Sec 1831o requires:
Each appropriate Federal banking agency and the Corporation (acting in the Corporation’s capacity as the insurer of depository institutions under this chapter) shall carry out the purpose of this section by taking prompt corrective action to resolve the problems of insured depository institutions.
We have a nearly-unbroken chain of bank failures going back to 2008 in which (c)(3) critical capital levels have been massively invaded without FDIC response and which in turn have led to these failures.
Incidentally the word shall appears in that statute 47 separate times. The word “may” appears only 13 times. The word shall has, quite simply, been repeatedly and intentionally ignored for the last four years and continues to be ignored today.
It is therefore only reasonable for the market to assume that all large financial institutions are similarly underwater on any sort of honest accounting basis and thus the only thing preventing them from blowing up is the ability to continue to roll over indebtedness and pick up dropped pieces of crack from between carpet fibers with which they can claim all is ok as they take another hit from the pipe.
This is where the confidence problem is rooted in the current market volatility and neither political party in the United States Congress nor either of the other two branches of government has done a damned thing about the wanton and outrageous violation of this section of law — law that was put into place after the S&L crisis which arose due to the precise same willful and intentional aversion of regulatory eyes.
If this crap is not stopped the market will continue to press this bet on insolvency whenever it sees an opening to do so and eventually one or more large financial institutions will collapse exactly as occurred with Creditanstalt. Since the governments of the world have “blown their wads” with lower interest rates, balance sheet expansion and outrageous deficit spending trying to cover up their own internal corruption and willful refusal to enforce the law that led to the 2008 market collapse when, not if, the market manages to tip one or more of these institutions “over the edge of the cliff” there will be no ability to stop the cascade of defaults and bank failures.
This is the legacy of our government on both sides of the aisle and will be written in the history books as the root cause capital market implosion that appears at this time to be utterly inevitable – not because we can’t stop it but because our government refuses to hold the responsible parties accountable for both their actions and intentional inactions.