Seen All It Before

Citigroup Float May Experience Dramatic Upside Velocity

Citi is significantly reducing the credit limits on the Sears credit cards that it services. While that resolves Citi's credit exposure, it will kill Sears and CEO Eddie Lampert will own a whole lot of inventory.

Volcker's Capital Idea: Getting Back to Real Banking

The old man has it right. The question is will Geithner and Summers listen. They also need to bring back Glass-Steagall to show exactly whose capital is at risk.

Nationalization, By Any Other Name

I would call it an unofficial conservatorship. The regulators are definately calling the shots. Which would explain Citi's break with the other "financial Institutions" about Mortgage Loan Modifications.

How Stressed Are U.S. Banks?

Nationalize is not a recognized legal term in banking law. The closest term is conservatorship, where the government operates the bank until a buyer is found. Receivership is analagous to the term bankruptcy when the primary regulator determines that there is insufficient capital and then hands it over to the FDIC to liquidate. Both Conservatorship and Recievership wipe out any shareholder interest or rights.

Dennis Gartman: Next Great Trade Is Canadian Banks

You may want to consider these factors:
1. Canadian Bank systems are not as sophisticated at US Banks ie: RBC uses Dexia's systems for institutional and wealthy clients. Bank Systems located in US are separate from Canada operations.
2. Canada taxes all the revenue earned by its citizens no matter where the source, unlike US tax laws. Canadian banks pay taxes on income earned in the US to the Canadian Revenue Agency.
3. Canada does not require US GAAP accounting. Are you comparing apples to apples? US regulators require Canadian Banks to follow it for banks operated in the US. (How well do the US banks follow GAAP accounting?)
4. Canadian Tax Law is changing concerning the treatement of Unit Trusts, which typically hold natural resource assets and make up a material portion of the TSX and PKA.

Market's Collapse Determining Status of World's Largest Fund of Funds, New York State

This is what happens with big money and politics hook up. Sounds like a rehash of the Ohio Workmen's Compensation Bureau scandal. Is it incompetence or is it fraud? So how much D&O insurance do the Trustees carry?

Slow Down Mr. Roubini

The Feds have figured out that there is more value in a going concern selling off its assets, parts and pieces than if the FDIC does it at a firesale. Citi and BAC will be around long enough to dispose of their viable assets and get downsized so they are no longer "too big to fail".

Foreclosure Moratorium List Grows

So if the banks are serious about amending the mortgages and helping people in foreclosure why does the sole position of Loan Modification Clerk only require a high school diploma and has not been filled since it was posted in Oct 2008? While the jobs for Bankruptcy Analyst, Default Settlement Specialist, Collectors, Asset Recovery Specialist, Foreclosure Specialist, Field Agent (REO), Foreclosure Analyst, Default Settlement Specialist, Default Reporting Specialist and Loss Mitigation Specialist make two times what they are offering for the Loan Modification Clerk's job? Not seeing a lot of resources dedicated to this objective.

Starting the Geithner Resignation Pool

So can we start an office pool similar to the football and NBA playoff pools so at least someone can make some money off Geithner leaving once Obama figures out that he is just more of the same. There is no way legally for the Treasury to buy the bad assets at inflated prices. That is why there is no plan, no one found the right loophole yet. Now the Fed Reserve can buy these assets at any price, but then who will bail them out?

America's Insolvent Banks

There were many S&L's that were not declared insolvent until Congress approved the funds for the FDIC to take them over. Besides the bank accounting and the regulatory reporting process is a lot like making sausage. It ain't pretty and you cannot recognize what you started with based on the end product. Product sales are double counted so the fair haired guys can get their incentive bonuses. Losses are not recognized until the regulators force the bank to write the asset down. Then there is the mysterious black hole called off balance sheet. To my recollection, the large banks have already exchanged their derivatives, swaps, SIV's and structured notes with each other. Like Lehmann's structured note for $1M that was based on an index that they created by picking the stocks and they kept the records of to determine the profit at settlement. The market-maker was another large bank that earned a 1% fee for selling it to their charitable trust or pension fund. These are the toxic assets that cannot be valued (because the time to settle the trade has not yet expired) and are not even included in the banks financials, yet. And then its the customer who takes the loss while the bank keeps its selling commission. No breach of fiduciary duty here.

Five Laws That Government Should Pass

You are absolutely correct that the damage done by Gramm-Leach-Bliley must be reversed and Glass Steagall functional separations be reinstated. Lets also eliminate the off-balance sheet smoke and mirror accounting and require the investment banks to have a capital reserve requirement for all the derivatives and SIV's that they issue. The payment systems are supposed to be regulated by the Fed Reserve, but the credit cards and debit cards are processed by VISA and MasterCard in this country. The EU tried to put some parameters and requirements on VISA and MC before they could transact business in Europe, but there are no such controls here in the US. Credit and Debit cards are very scary stuff should not replace the US currency. The Fed Reserve made lots of money when it processed all the checks written on US banks. Since the interest rate they charge at the discount window to banks is non-existent, where are they getting all the money to fund their bank bailout programs? The FHLB's are pretty much bankrupt, will the Fed be next?

Geithner's False Assumption - Rebuilding Securitization Market Is Good for Economy

Amen

Stress Test: It's Time for Transparency

That will happen only if the regulators are allowed to actually do their jobs. Paulson did not want to hear this kind of bad news and the regulators turned a blind eye to the problems. The guys on Wall Street made a fortune shorting the financial companies that had operating problems. So why can't the regulators see this?

Proposed Solution for Toxic Assets Plaguing Banks

The mortgage mess is capable of being resolved. The government has approved sufficient funds to fix that problem. Now they need to vote to let the Bankruptcy Courts have authority to properly value these over-inflated mortgages. The MBS's, CBO's and other debt related securities are capable of being valued, but the timing is the issue. As long as they are "Held for Investment", the banks are not required to "Mark them to Market". The bankers are praying that the US government fixes the mortgage mess they created and property values will stabilize or maybe state appreciating again. Then they will not have to take a hit to their precious salary or bonus or commission or however they are compensated. The truly Toxic Assets are the Off-Balance sheet items that are highly leveraged promises with no collateral or asset to value. This is what will render our banks insolvent when they are forced by the regulators to value and recognize these derivative transactions.

A Company Is Too Big to Fail? Make It Smaller

Finally, someone gets it. Lets roll back some of the legislation passed by the banking lobbyists. Undo Graham Leach Bliley and separate the Investment Banks from the banking and credit system. Put a mandatory reserve requirement on the Investment Banks and make sure that the principals, owners and employees have their personal wealth at risk for the losses of the Investment Bank. The Bailout and the Stimulus bills have enough money to resolve the banking crisis but not the Investment Bank's derivative off-balance sheet overhang. Stop the incestuous relationship of letting Wall Street manage the Federal Regulatory systems. Give the Federal Trade Commission some authority to limit the mega-mergers that destroy competition. I even endorse repealing the Interstate Banking Act of 1994 and require a separate bank charter for each state with a separate accounting requirement for transparency. The problems and losses are buried so deep in the consolidated annual reports, they are a useless disclosure.