Category: Credit Crisis BailoutsThe analysis published under this category are as follows.
Tuesday, December 02, 2014
New Banking Rules: Cyprus-style Bail-ins to Take Deposits and Pensions / Politics / Credit Crisis Bailouts
On the weekend of November 16th, the G20 leaders whisked into Brisbane, posed for their photo ops, approved some proposals, made a show of roundly disapproving of Russian President Vladimir Putin, and whisked out again. It was all so fast, they may not have known what they were endorsing when they rubber-stamped the Financial Stability Board's "Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution," which completely changes the rules of banking.Read full article... Read full article...
Friday, August 22, 2014
Tom Naysburn writes: Accepted thought acknowledges the financial crisis of 2008 was a near apocalyptic event which needed the citizens of the Anglo American dominated financial world to bailout the banking system to the conservative tune of $10 trillion in the US, and at least £1 trillion by UK taxpayers. For perspective, the entire cumulative national government debt in the UK stood at £350bn at the turn of the century.Read full article... Read full article...
Friday, April 18, 2014
Bank Depositor Bail-Ins and Real Assets vs Liability-Based Assets / Stock-Markets / Credit Crisis Bailouts
Bail-ins are a new way of "rescuing" banks and other financial organizations that have been sweeping around the world, even as they rewrite the rules for investors and depositors.
Bail-ins have already occurred in Cyprus with their banking system, as well as with the retirement system in Poland. The European Union is on board in rapidly implementing bail-in standards, and they are under intensive scrutiny by regulators in the United States, with ratings on some major US bank securities already being changed in anticipation of the potential for bail-ins. Canada has announced its intentions in this area as well, and Japan is moving rapidly.Read full article... Read full article...
Wednesday, December 18, 2013
They're Planning the First Legal "Bank Robbery" in U.S. History / Stock-Markets / Credit Crisis Bailouts
Peter Krauth writes: So-called "bail-ins," which give banks the right to dip into your savings to pay for their lousy financial decisions, have been on the table for years, ever since Cyprus tested the idea.
But they're moving beyond the "testing phase" now.
The latest clue came from a seemingly benign banking conference on December 2, when one man revealed some frightening central government intentions.Read full article... Read full article...
Wednesday, November 27, 2013
Zombie Government Armed with Accounting Tricks Bailed out Zombie Banking Industry / Politics / Credit Crisis Bailouts
By Doug French, Contributing Editor
On March 16, 2009, the Financial Accounting Standards Board (FASB), a private-sector organization that establishes financial accounting and reporting standards in the US, turned the stock market around and at the same time motivated banks to become the worst slumlords and neighbors imaginable.
Most people believe accounting is conservative, the rules cut and dried. Accountants make economists look frivolous. But accountants are people too, and FASB succumbed to pressure from Capitol Hill in the wake of the 2008 financial crash.
Tuesday, September 17, 2013
On August 13, 2007, more than a year before the AIG meltdown, I publicly challenged AIG’s phony accounting for credit default swaps linked to over $19 billion in “super senior” exposure to subprime and other dodgy loans. These were meant to be super safe, but any competent CDO specialist should have been able to perform the same analysis I did. Instead of super safe, AIG had several billion dollars worth of principal risk due to exposure to mezzanine tranches backed by a significant percentage of poorly underwritten loans, and losses were eating through all of the so-called protection. Yet, despite market prices already eroding on the underlying collateral, AIG took no accounting losses at all. That was far from AIG’s only problem.Read full article... Read full article...
Sunday, September 08, 2013
Mises Institute: In the book, you oppose Bernanke’s view of the Great Depression, which you point out relies heavily on the views of Milton Friedman.
David Stockman: Bernanke has cultivated this idea that he is a brilliant scholar of The Great Depression, but that’s not true at all. What Bernanke did was basically copy Milton Friedman’s misguided and very damaging theory that the Federal Reserve didn’t expand its balance sheet fast enough by massive open market purchases of government debt during the Great Depression. Bernanke therefore claimed that monetary stringency deepened and lengthened the depression, but in fact interest rates plummeted during the crucial 1930-1933 period: credit contracted due to genuine and widespread insolvencies in the agricultural districts and industrial boom towns, causing bank deposits to shrink as a passive consequence. So Bernanke had cause and effect upside down — a historical error that he replicated with reckless abandon in response to the bursting of the housing and credit bubble in 2008.
Friday, May 17, 2013
The financial news is getting boring. The Dow goes only one way – up. But gold fell below $1,400 per ounce yesterday.
Rather than trying to figure it out, yesterday evening we drove down to Zombietown. A friend in Washington had promised to introduce us to Neil Barofsky, inspector general of the TARP program.Read full article... Read full article...
Friday, April 12, 2013
In his first TV interview since the company reported record profits, Fannie Mae CEO Tim Mayopoulos told Bloomberg TV's Peter Cook today that U.S. taxpayers could see a net gain from their bailout as the housing market rebounds. Mayopoulos said, "I do think, given the strength of our future profitability, that it is possible that we will be able to pay dividends that would be equal to or greater than the amount of money that we've received from the Treasury Department."Read full article... Read full article...
Thursday, April 04, 2013
Former Treasury Secretary Hank Paulson spoke with Judy Woodruff in an interview airing on Bloomberg Television at 9:30 pm/ET this Friday. Paulson said that he "had to pinch himself" in reaction to the news that Fannie Mae generated record profits last year. "I could hardly believe what I was reading."
Paulson also said that the U.S. needs to slow the growth of entitlement programs and raise more tax revenue by closing loopholes: "We may need more revenues...This should be part of doing something with entitlements, because I think to just keep postponing entitlement reform is a big mistake."Read full article... Read full article...
Saturday, March 02, 2013Mandeep Chadha writes: Cross Border Economic-Political Relations & Risk to International Banks
Global economy is witnessing an integrated banking system is emerging with a small group of large across developed countries' banks the spanning respective national banking markets: As Garrett, Mahadeva and Sviridzenka noted. This raises the issue of the appropriate international level of body to monitor and manage financial stability. Financial stability is currently managed at respective national levels. In particular, the fiscal competence to deal with banking crises is a responsibility of national governments. However, the recent wave of recession starting in the western economy, as travelled and affected the global economy at large. The risk management is required to manage the recession and make the global economy turn back to the growth path.
Read full article... Read full article...
Thursday, January 17, 2013
Sasha Cekerevac writes: What does it take to create and sustain long-term gross domestic product (GDP) growth in an economy?
One of the most important factors is a high level of investor confidence.
Investor confidence throughout the economy can help support the formation and expansion of businesses and the development of new technologies and ideas.Read full article... Read full article...
Wednesday, January 09, 2013
AIG Considering Suing Government Over Bankruptcy Saving Bailout / Companies / Credit Crisis Bailouts
David Zeiler writes: Just one month after American International Group Inc. (NYSE: AIG) paid back the last of its huge $182.3 billion U.S. taxpayer-funded rescue, the insurance giant is pondering whether to join a shareholder lawsuit charging the bailout terms were unfair.
Former AIG CEO Maurice Greenberg initially filed the lawsuit in 2011, claiming the 14% interest rate that the government charged, as well as the large size of its stake - 92% - were harmful to AIG shareholders.Read full article... Read full article...
Monday, December 31, 2012
Another Genius Mortgage Idea From Washington That Is Going to Cost You / Politics / Credit Crisis Bailouts
Shah Gilani writes: Now here's another good idea from the geniuses that ruin, I mean run, our country.
The Obamarama administration really wants to help homeowners whose homes aren't worth what they borrowed to buy them. In other words, they are "underwater."
A lot of the loans to homeowners that are underwater are owned outright or, at a minimum, insured (more often both) by Fannie Mae and Freddie Mac, the government-sponsored (which means taxpayer saddled) enterprises that the government had to take over when in 2008 they lost on their trillion-dollar bets that home prices would go up forever. Geniuses!Read full article... Read full article...
Tuesday, December 18, 2012
Basel’s Capital Curse, Beating the Drums of Bank Recapitalization / Interest-Rates / Credit Crisis Bailouts
In the aftermath of the financial crisis, the oracles of money and banking have been beating the drums for “recapitalization” — telling us that, to avoid future crises, banks must be made stronger. To accomplish this, governments across the developed world are compelling banks to raise fresh capital and strengthen their balance sheets. And, if banks can’t raise more capital, they are told to shrink the amount of risk assets (loans) on their books. In any case, we are told that one way or another, banks’ capital-asset ratios must be increased — the higher, the better.Read full article... Read full article...