Fitz919

Congress Made the Bank Bailouts Work for Taxpayers

Banks can go to the Discount Window and borrow at .5%. TARP forced them to pay 5%. Did this 5% money help them lend? No. Would .5% money help them lend? Of course. What are banks doing with the .5% money they are borrowing from the Discount Window? They are buying Treasuries. The 10 year Bond pays 3.5%. This means the banks are borrowing from the Fed and lending to the Treasury. There was never a more perfect money making machine, and all they do is put up their junk mortgage backed securities as collateral, and they get to claim they are lending to boot.

Tier 1 Capital Ratios of Large U.S. Banks

I'll stand by the word "require", just as the Government required the banks to take the first round of TARP funds (TRAP funds is more like it), and just as Ken Lewis was required to take on Merrill Lynch, when he said he wanted to get out of the deal.


On Jun 21 03:34 PM InnocentsAbroad wrote:

> Rather, allowing banks to report numbers which they know are false,
> and thus allowing the pillaging of the public purse.

Tier 1 Capital Ratios of Large U.S. Banks

Who in their right mind would trust a bank to accurately report a Tier 1 number? It's pure nonsense, it will never happen. Notice how many are clustered around the 10% figure, it's a number they want us all to believe.

If a regulator didn't have a clue that 10.5% of IndyMac's loans were producing no income, then a bank can hide anything they want to from anyone they want to. It was months before B of A knew how bad things really were at Merrill Lynch.

What we have right now is the Government requiring banks to report numbers which they know are false, in order to maintain confidence in their badly broken system.

Stress Testing: What's Your Bank's AQ?

That was a very gutsy move Ranking the Banks like you did, I applaud you for doing so.

Why This Rally Is Unsustainable

I'm glad to see someone pointing out the obvious. I would like to take one point further though. The public/private partnership plan to buy up toxic assets is now DOA. You see the relaxation of mark to market rules have made it possible for banks to value those assets as high as they like. Now they have no reason to sell any of it. It produces income for them, and now it lets them inflate their books. They show up as paper gains, which of course they claim as profits. The formerly toxic assets are now the geese laying golden eggs...there is no way they are going to sell any of it.

Toxic Assets: Facts, Lies and Hype

The report about Citi being profitable during Jan and Feb was from an office memo. It was probably an answer to a question about how well they would have done if they didn't have to comply with mark to market accounting rules. It wouldn't surprise me a bit if this quarter they had another big fat loss under m2m.

Just watch...when earnings season comes around again, the market will be heading lower.


On Mar 13 12:43 PM Plumber 250 wrote:

> I don't know about google hits because I am basically electronicly
> challenged. But I do know that just because sentiment changes doesn't
> mean reality changes. A week ago these banks (Wells Fargo, Citi,
> BofA, etc) were totally in the crapper and this week they are soaring.
> This looks like a bear trap to me. Galbreath's book about the crash
> has numerous accounts of Wall Street leaders issuing statements about
> how the carnage was over and everyone could jump back in. That's
> all baloney. The tsunami of credit card defaults and student loan
> defaults is going to drive the banks further down and anyone that
> thinks otherwise should come see me about a bridge I have for sale
> in Brooklyn. What else is Buffet and Dimon going to say....oh! by
> the way our banks are technically insolvent and we are going to have
> to have a new round of capital raising at fire sale prices. Come
> on people, one Bernie Madoff may be on his way to jail, but there
> are still many others out there. Anyone who even thinks of buying
> bank stocks at this time needs to be fitted for a sleeveless white
> jacket. There is an old saying in retail....the butcher that has
> no lamb chops can afford to advertise them at the lowest price in
> town. What does it matter what the spread is on bank loans if people
> cannot afford, or are afraid to, make purchases of the products the
> money would be loaned for? In one breath the wizard of Omaha is saying
> he has never seen the consumer's wallet sewn so tightly shut and
> in the next breath he is telling us the banks are making loans at
> record spreads. Cars aren't selling, RVs aren't selling, the universities
> are scalling back because student loans have plummeted. Six months
> ago we were hearing how corporate balance sheets are bloated with
> debt, all of a sudden they all got well. What happened? Did they
> all hit the lottery? We have a debt problem in this country. Families
> and corporations are leveraged to the hilt. Consumers cannot spend
> their way out of that problem and corporations cannot borrow their
> way out of their problem. As long as the housing market remains a
> zombie the banks have junk for assets. When the million plus empty
> houses that are on the market are sold to families who can afford
> them, and when the houses that should be foreclosed on are foreclosed
> on and subsequently sold to families who can afford them (and that
> means having a job) then the banks will be out of the woods. Until
> that time, watch out for the bear traps.

Toxic Assets: Facts, Lies and Hype

Don't waste our time with your google hit nonsense.

Stress Tests and Distressed Assets

No one in their right mind wants to have anything to do with Securitized Mortgage Backed Securities. They were designed as a scam. Now we have the Govt's brand new plan to rescue mortgages. And guess what... those new mortgages will reset in 5 years. That's right, Obama's "best and brightest" couldn't come up with anything better than the same scam.

We don't need resets or Variable Rate Mortgages. We need 4% Fixed...available to everyone and anyone...end of story.