Fed says banks eased loan terms as demand increased in 1st Quarter
Well you already should know what I would, I’ll say it anyways.
Not sure that EASING, lending standards is the best course of action when demand increases. That is close to what got us in our last crisis. When we lower lending standards on home loans, guess what, demand increase for the cheaper credit. Now I do have faith in the banks that this easing in the lending standard probably was not anywhere as drastic then the 2001-2007 time-frame but I am just saying, this logic they laid out in the article is at least different enough, that is got me to read it and write on here.
Please, bankers and risk officers everywhere, lets not repeat the same trap again. Our recovery will be long and slow and this is a good sign of a healthy, real and sustainable recovery. We don’t need cheap money right now. What we need is more good ideas and businesses to invest in so we can create the jobs that we need in America. Ok, all done.
Bloomberg: U.S. banks saw increased demand for lending in the first quarter and made loans easier to get, according to a Federal Reserve survey.
“Domestic banks generally reported having eased their lending standards and having experienced stronger demand over the past three months,” the Fed said today in Washington in its quarterly survey of senior loan officers. It said the number of banks reporting eased standards and improved demand, rather than the reverse, was “modest.”
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Bank of America swings To profit amid heavy one-time items
This may be a turn-around story in the making. The faster they write-off the bad loans and give more disclosure on any contractual and legal liabilities, the better. It looks like they are getting serious about reforming the BofA bank and brand so lets hope so.
WSJ - Bank of America Corp. (BAC) closed out the turbulent 2011 year with better-than-expected revenue in the final three months, driving the bank to a fourth-quarter profit compared with the prior year’s loss.
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JPMorgan joins Goldman Sachs keeping Italy derivatives risk murky
$5 trillion is quite a bit of debt insurance to have exposure on. This could be of concern, both banks should clear up where a majority of this exposure originates before this rumor-mill gets out of control. I would assume that debt insurance is purchased in places where there was enough risk to bring that type of protection into the picture. I would think that the emerging portion of the Eurozone would be of higher risk. Banks need to set this straight soon, they already still haven’t fully disclosed and written down all they liabilities they still have from the U.S. real estate bubble of 2007.
Bloomberg (Christine Harper) – JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally. Just don’t ask them how much of that was issued by Greece, Italy, Ireland, Portugal and Spain, known as the GIIPS.
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Merrill Lynch moving derivatives to BofA FDIC insured bank unit
Utter garbage. How can we sit back and let a bank move a massive load of liabilities to a banking unit that has deposits and is backed by the U.S. taxpayers via the FDIC? No surprise the Federal Reserve didn’t see a problem because they would not be first in line to make that banking unit whole again if something went wrong and trigger the CDS and whatever, other exotic contracts Merrill Lynch may have. We are just increasing the risk on this massive institution.
We need to quit using this line of global uncompetitiveness as a reason why our deposit institutions need to act like investment banks and take those type of risks. If it is that important to Bank of America or any other bank (not to single them out), they just need to make BofA Investments or whatever so they can run that operation off their own capital and investors so they can take that risk so try and increase profits. Our banks just need to be competitive in our home market, America.
If other countries allow their “safest” banks jump off a cliff, should we compete to let ours? Even William K. Black is mentioned in the article and he thinks we should have tight runs against this type of practice. Just so people know, I am not against banks or banking, personally I find them fascinating companies and I love their history, but what we have these days is nothing like the old days. When I say that, I mean the sense of duty and prudence is not their and that is a loss for the industry as a whole.
Bloomberg (Bob Ivry, Hugh Son and Christine Harper): Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.
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Boise County Idaho files for bankruptcy
This is a good sign if you really think about it. If Boise County has unsustainable debt levels then having them file for protection and re-negotiate with their creditors is the proper and legal remedy. What we don’t want to see is the federal government coming in and bailing these municipalities out and basically trying to have them support large budgets without the tax revenues to back it up. There are quite a few more on the east coast that are getting close to this point so we should hear something to this effect in the future. As a nation as a whole, we need to get all our spending back to a sustainable level so we honestly get our house in order and start reducing this historic public debt we have.
Idaho Statesman - In a move rare in the United States and perhaps unprecedented in Idaho, Boise County is filing for federal protection against a multimillion dollar judgment. “This was not our first option. This was our last option,” said Jamie Anderson, chairwoman of the three-member Boise County Board of Commissioners. “This protects us so we can continue to operate.” Chapter 9 protection, from a section of federal code expressly for financially distressed municipalities, means that creditors can’t collect while the county is developing a plan for reorganizing its debts.
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Ambac says JPMorgan refused mortgage repurchases
Very interesting that JP will not buy-back the paper is purchased as part of the Bear Sterns acquisition. Not surprising though. If I had a bunch of known bad or even worst, fraudulent, I would not want to buy it back either. It would be a instant loss when you write it off. The article mentions there is over $90 billion dollars of the paper running around like the boogeyman. If the official number is $90 billion, I am going to assume at least twice that is actually out there.
JP Morgan is digging in, they have set aside a whooping $1.5 billion dollars in legal fees to use to litigate other financial institutions that are going force the issue and make them purchase the paper back. In closing, a conference call was quoted and I am going to quote it here, “”It’s going to be a long ugly mess”.
Bloomberg - Ambac Assurance Corp., the debt guarantor partly seized last year by Wisconsin’s insurance commissioner, made the claim in a proposed amended complaint in its lawsuit against Bear Stearns’s EMC Mortgage unit, now owned by JPMorgan. Ambac, seeking to add a fraud claim to the case, referenced depositions, e-mail and letters in the filing, which was unsealed Jan. 14 in Manhattan federal court.
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Wikileaks next document drop may target Bank of America
This could spell bad news for Bank of America. Confidence in the bank is waning over the “foreclosure-gate”, Merrill Lynch and all the toxic assets. If there is really damning evidence in those files that knocks the already tattered reputation, investors could pull their money from the company and force it into a very uncomfortable position. I am looking forward to getting my hands on this once it becomes available and do some of my own analysis and write some articles for you to digest.
Business Insider - Is the target of the Wikileaks “Big Bank” exposé going to be Bank of America?
As the Huffington Post points out, Julian Assange talked about BofA last year in an interview with Computer World, claiming “he had acquired a large cache of information from Bank of America.”
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