The Independent

Government won't prosecute Goldman Sachs in probe – USATODAY.com

WOW! My previous futures broker (PFGBest)... thank God I am no longer with them... and those that think "Obamacare", run by our government, is going to turn out swell this is what you can expect... AS USUAL OUR REGULATORS ARE ASLEEP AT THE WHEEL! WHEN ARE AMERICANS GOING TO WAKE AND DEMAND CHANGE! OH, THAT'S RIGHT, YOU DID IN THE LAST PRESIDENTIAL ELECTION! THE CORRUPTION AND ROT RUN TO THE CORE NOW... LEHMAN BROS BERNIE MADOFF MF GLOBAL (Corzine) GOLDMAN SACHS (Lloyd Blankfien) JP MORGAN/CHASE (Jamie Dimon) PFGBest (Russell Wasendorf Sr.) WHERE IS THE JUSTICE DEPARTMENT ~ OH, THATS RIGHT ~ THEY TOO ARE ABOVE THE LAW NOW! SAD TO SAY... I SMELL A SYSTEMIC FAILURE AND THEN REVOLUTION IN OUR FUTURE... http://online.wsj.com/article/SB10001424052702304022004577518680956762826.html

by Money Morning Americans could be in for a rude awakening in coming months when they discover the true scope of the massive national debt racked up by the U.S. government. In fact, the $1.6 trillion deficit expected for 2010, which is above 10% of gross domestic product (GDP), is only the beginning. Since the current economic crisis began in late 2007, the U.S. Federal Reserve has tripled the size of its balance sheet, creating enormous amounts of new money by lending to hundreds of ailing banks and buying up more than $1 trillion of questionable asset-backed securities. But that’s only a small part of the story. Since the beginning of the crisis, the Fed has lent, spent, or guaranteed $11.6 trillion, including underwriting the entire system of mortgage finance in the United States, a system that currently shows a nearly $1 trillion loss. And none of these figures include any of U.S. President Barack Obama’s stimulus packages, which means the actual deficit next y...

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Posted: 16 Dec 2009 02:49 PM PST From Eric Dash at the NY Times: U.S. Said to Reconsider Quick Sale of Citigroup Stake Two days after Citigroup moved to untangle itself from Washington, the Treasury reversed course Wednesday and backed away from plans to immediately sell a portion of its stake in the banking giant ... The decision came after Citigroup badly misread the financial markets on Wednesday and struggled to sell new shares to pay back its bailout funds. Oops.

“Has there been one financial leader to say this is really excessive? Wake up, gentlemen. Your response, I can only say, has been inadequate.” Paul Volcker, former Fed Chairman, Dec 8, 2009From The Times: ‘Wake up, gentlemen’, world’s top bankers warned by former Fed chairman Volcker “I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth — one shred of evidence,” said Mr Volcker ... He said that financial services in the United States had increased its share of value added from 2 per cent to 6.5 per cent, but he asked: “Is that a reflection of your financial innovation, or just a reflection of what you’re paid?” And from the Telegraph: Ex-Fed chief Paul Volcker's 'telling' words on derivatives industry    "You can innovate as much as you like, but do it within a structure that doesn't put the whole economy at risk." ... Mr Volcker argued that banks did have a vital role to play as holders of ...

by CalculatedRisk on 11/26/2009 05:55:00 PM From Jon Lansner at the O.C. Register: How banks may lose $430 billion more Banks are projected to lose $430 billion on commercial real estate loans in the next two to three years [said] Stan Mullin, an associate with California Real Estate Receiverships in Newport Beach ... Highlight’s of Mullin’s talk: •$1.4 trillion in commercial loans are coming due in the next five years. •That’s equal to the same amount that came due in the last 15 years. •Lenders could take massive losses on their real estate portfolios from 2010-2013. This is similar to the recent presentation by Dr. Randall Zisler, CEO of Zisler Capital Partners: A crisis of unprecedented proportions is approaching. Of the $3 trillion of outstanding mortgage debt, $1.4 trillion is scheduled to mature in four years. We estimate another $500 billion to $750 billion of unscheduled maturities (i.e., defaults). And from the WSJ in October: Comme...

The MBA reports a record 14.4 percent of mortgage loans were either one payment delinquent or in the foreclosure process in Q3 2009. This is an increase from 13.2% in Q2 2009.

The Commerce Department reported Wednesday that Housing Starts dropped a whopping 10.6 percent in the one month period October 2009 versus September 2009, and fell 30.7 percennt below an already awful number last October 2008. This is in spite of the $8,000 first time home buyers credit the Central Planners decided was a key stimulus tactic. New Building Permits fell 24.3 percent from last year's lousy October number. Mortgage Applications fell 2.5 percent last week. Clearly the Central Planners' stimulus plan is not working. The reason is simple, they have targeted a small minority to get the trillions of dollars of government spending, and have failed miserably in conducting a strategy that would get cash into the hands of all American Households. If you have a clunker and are willing to buy a tiny car with a certain gas mileage performance, if you are buying a new home for the first time, or if you are one of the largest financial companies on earth, you get the money, and...

Nov. 16 (Bloomberg) -- The Federal Reserve Bank of New York “severely limited” its ability to save taxpayer money on American International Group Inc.’s rescue by refusing to compel banks to take concessions, said a Treasury Department watchdog. The Fed didn’t use its “considerable leverage” as regulator of several of AIG’s counterparties to force them to accept so-called haircuts on credit-default swaps, Neil Barofsky, special inspector for the Troubled Asset Relief Program, said today in a report. The regulator gave up efforts to negotiate discounts from the banks after two days and opted to pay them in full for $62.1 billion in swaps, Barofsky said. “These policy decisions came with a cost -- they led directly to a negotiating strategy with the counterparties that even then-New York Fed President Geithner acknowledged had little likelihood of success,” Barofsky said. Timothy Geithner, now Treasury secretary, was among officials who took over negotiations with the banks from AIG in N...

by CalculatedRisk on 11/11/2009 08:47:00 AM Matt Padilla at the O.C. Register writes: Foreclosure notices hit record 8,800 Graph from O.C. Register. ForeclosureRadar.com reports that outstanding foreclosure auction notices in Orange County rose to 8,895 at the end of September, the highest in this housing downturn and probably the highest ever. September’s total was up 5% from August and 90% from a year ago. Padilla provides a second graph (see his article) of 90 day delinquencies, foreclosures and REOs. He writes: [The second] chart shows that the ratio of borrowers having missed at least three monthly payments is at nearly 7% and has risen every month for more than three years. It’s incredible that while so many mortgages are delinquent, banks are only holding 0.26% of first mortgages as REOs. Loans in the trial modification period are still considered delinquent, so that might explain some of the increase in 90+ day delinquencies. But that doesn't explain the ...

Three banks failed on Friday, bringing the annual headcount to 123. Two in Florida and one in California will cost the FDIC roughly a billion dollars… money they haven’t had for months.

From Floyd Norris This year, a subcommittee of the House Financial Services Committee held a hearing at which legislators sought no facts but instead threatened dire action if the chairman of the financial accounting board did not promptly make it easier for banks to ignore market values of the toxic securities they owned. The board caved in, which may be one reason why banks are reporting fewer losses these days. But the board’s retreat was not enough to satisfy the banks. The American Bankers Association is now pushing Congress to give a new systemic risk regulator — either the Federal Reserve or some panel of regulators — the power to override accounting standards. The view of the bankers is that the financial crisis did not stem from the fact that the banks made lots of bad loans and invested in dubious securities; it was caused by accounting rules that required disclosure when the losses began to mount. The superciliousness continues.

16 Oct 2009 09:21 AM PDT From MarketWatch: Summers: 'Time has come' for deep change for banks White House senior economic adviser Lawrence Summers challenged U.S. financial institutions Friday to think about what they can do for their country by stepping up and accepting the regulations imposed upon them in the wake of the largest financial crisis since the Great Depression. "Financial institutions that have benefited from government support can, should and must use this moment to think about what they can do for their country -- by accepting the necessary regulation to protect the American people," Summers said in remarks prepared for delivery at the Economist's Buttonwood Gathering in New York. "There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system." ... "The time has come for fundamental change in the financial sector of our economy...