The Reasoned Review

Just another WordPress.com weblog

Posts Tagged ‘Financial

Eye of the Fiscal Hurricane

with one comment

If predictors are accurate, we’re going to be in a world of hurt in the coming years. Sub-prime loans were not the only “funny paper” passing through our banks this decade. They also issued bonds on “Option ARM” (Adjustable-rate mortgage), Alt-A (alternate “A” credit rating) as well as plain ol’ prime mortgage loans (“Prime” = Credit Score > 650). Once these begin to default we could once again see trillions of dollars erased from the economy. Only this time the US will be unable to beg China for the money.

We’re not out of the woods yet.

Written by pavanvan

January 23, 2010 at 10:39 am

Dow Overvalued

leave a comment »

Zero Hedge gives us yet more evidence that the Dow is overvalued: industry insiders are selling stock 82 times faster than they’re buying it.

In the most recent data set, $11.6 million in stock was purchased by insiders, while a whopping $957 million was sold. And somehow pundits are still spinning this mass orchestrated sell into the bid by those in the know as a bull market.

For significant holders of stock, now might be the time to unload.

Written by pavanvan

December 9, 2009 at 9:32 pm

Too big

leave a comment »

I know I’m somewhat late to this party, but I wanted to point out to all who are still unaware that the ‘too big to fail’ banks which caused our late crisis are even bigger.

JP Morgan, AIG, Citigroup, Goldman, and Bank of America were the winners of Geithner-Paulson’s free money giveaway (with Lehman a bad loser), and together they have swallowed the hundreds of small and medium banks that have failed since. They now present an even bigger and more systemic risk, should they choose to gamble away their money once again.

Despite repeated calls from almost every respected economist (notably Joseph Stiglitz) that these banks are a menace, Lords Geithner and Bernanke have done nothing to restrict their size – indeed, they have made them impossibly more dangerous and lucrative.

Furthermore, none of the incentives which led to such reckless gambling (ludicrous bonus packages, easy credit, low intrest, short-term rewards) have been addressed, and instead have been reinforced.

The next bailout will have to be 700 trillion instead of a mere 700 billion.

Written by pavanvan

November 30, 2009 at 10:06 pm

Failed Bank Fridays!

leave a comment »

I missed the last three failed bank Fridays, so here are all seventeen that failed in the past three weeks in a row. As always, from the FDIC:

Pacific Coast National Bank San Clemente CA 57914 November 13, 2009 November 18, 2009
Orion Bank Naples FL 22427 November 13, 2009 November 17, 2009
Century Bank, F.S.B. Sarasota FL 32267 November 13, 2009 November 18, 2009
United Commercial Bank San Francisco CA 32469 November 6, 2009 November 9, 2009
Gateway Bank of St. Louis St. Louis MO 19450 November 6, 2009 November 9, 2009
Prosperan Bank Oakdale MN 35074 November 6, 2009 November 9, 2009
Home Federal Savings Bank Detroit MI 30329 November 6, 2009 November 9, 2009
United Security Bank Sparta GA 22286 November 6, 2009 November 9, 2009
North Houston Bank Houston TX 18776 October 30, 2009 November 3, 2009
Madisonville State Bank Madisonville TX 33782 October 30, 2009 November 3, 2009
Citizens National Bank Teague TX 25222 October 30, 2009 November 3, 2009
Park National Bank Chicago IL 11677 October 30, 2009 November 3, 2009
Pacific National Bank San Francisco CA 30006 October 30, 2009 November 3, 2009
California National Bank Los Angeles CA 34659 October 30, 2009 November 3, 2009
San Diego National Bank San Diego CA 23594 October 30, 2009 November 3, 2009
Community Bank of Lemont Lemont IL 35291 October 30, 2009 November 3, 2009
Bank USA, N.A. Phoenix AZ 32218 October 30, 2009

Written by pavanvan

November 21, 2009 at 4:16 am

The 9/12 Protests As They Should Have Been

with one comment

ABA6

The Huffington Post has got the scoop on the recent protests that erupted outside the American Banker’s Association in Chicago yesterday. Unlike the “9/12 Tea Party” protests last month, however, these outraged citizens saw very little mainstream coverage. CNN merely reprinted a Reuters dispatch which quoted none of the protesters but plenty of the meeting’s attendees, all of whom professed their unequivocal innocence. Fox News, unsurprisingly, had very little to say on the matter. Even the New York Times could not be bothered to toss the story a brief. In all, the mainstream reaction to these demonstrations stands in pitiful contrast to the 24-hour live feed which blared into millions of homes on September 12th.

When one gets a sense of who these protesters are and what drove them into the street, the reason for a lack of discussion becomes clear. This demonstration did not occur within controlled paramters; its organizer, National People’s Action, has made no direct campaign contributions, and their stated aims, in contrast to the Fox News 9/12 Movement, are antithetical to the aims of our corporate industry.

Instead of agitating against a health-care public option (opposition to which has benefited our insurance industry enormously), this group seeks strong regulation of the financial instruments which threw them into poverty – CDOs, CDSs, etc. The current proposal to achieve this end creates a “Consumer Finance Protection Agency” (or CPFA) in a highly-contentious bill which is now on the senate floor and is being vigorously opposed by the financial establishment.

As Esther Kaplan reports in The Nation:

“‘We had this image of big bankers sipping martinis and saying, ‘Did we really get away with this?'” said lead organizer George Goehl, director of National People’s Action. “Then two months ago we found out the American Bankers Association was having its annual meeting here in Chicago.” The ABA, not so incidentally, has fiercely fought against new regulations on the banking industry, and is lobbying hard now against the CFPA.

This is something to watch for, much more so than the protests last month, as yesterday’s demonstration reflects, so far as one can tell, a genuine outrage over the status quo. Yesterday’s protest was small (estimates of just under 1,000 people), but one would like to think a small demonstration against a real grievance would carry more weight than a large, manufactured demonstration over a non-existent one. It will be interesting to see whether similar demonstrations crop up, or, starved for lack of media attention, this CPFA movement dies down. We know which option our bankers prefer!

Goldman and The Government: Strange Bedfellows

leave a comment »

The Huffington Post gives us a nice preview of an insider report in the upcoming issue of Vanity Fair, detailing the secret meetings between Goldman Sachs and the US Treasury at the height of last year’s stock market crash.

Here is a nice little Q&A with the author, Andy Sorkin, to get you warmed up. Look out for this article.

Written by pavanvan

September 30, 2009 at 10:23 pm

This Week in Failed Banks

with one comment

From the FDIC:


Bank Name

City

State

CERT #

Closing Date

Updated Date

Irwin Union Bank, F.S.B. Louisville KY 57068 September 18, 2009 September 18, 2009
Irwin Union Bank and Trust Company Columbus IN 10100 September 18, 2009 September 18, 2009

Written by pavanvan

September 18, 2009 at 9:31 pm