Hume must have been state chartered, as the state regulator locked the doors, and handed the keys to FDIC. $13.6 million in deposits is pretty small these days.
rc- I think any further rate cuts at this point, with inflation as it is, is the height or irresponsible behavior.
yes, I realize the importance of "saving" our financial system . . . but we all know damn well this is also yet another transfer of wealth up the chain.
It sickens me.
Now, back to that Bloomberg article . . . what the hell happened in those stocks at the end of the day? There is a story here.
Well, I don't know what will happen now. We've got some difficult days ahead. But it really doesn't matter with me now, because I've been to the mountaintop.
This is a small potato. I've been looking at about a dozen banks that I think will be in receivership via the FDIC within the next 6 months, the largest of which is Fremont (with about $8 billion in assets) and the smallest of which is Integrity (yeah, ironic huh?) in Atlanta (with about $700 million in assets). Once some of these medium-sized banks start getting taken over by the FDIC we're going to see some additional fireworks in the banking sector.
Somewhat OT. I have a newbie question about monetary policy if there are any economists out there:
In general, how many basis points does the Fed have to cut rates to turn a fundamentally dishonest and irresponsible person into a reliable borrower?
I'm concerned seeing how the credit markets are breaking down because nobody can trust each other anymore. I think it's imperative that the Fed cut rates as agressively as possible to make our population more trustworthy so lending becomes something other than financial suicide. How else can we unfreeze the credit markets?
Texas Attorney proposes Mortgage Adjustment Proceeding as stand-alone filing in US Bankruptcy Court where home is located:
"Henry Simon is a graduate of Yale University and the University of Texas Law School and has practiced law, with emphasis on areas involving insolvency, in Fort Worth for many years. Simon is a partner in the firm of Barlow Garsek & Simon."
The Git-Er-Done (and Hire-Me-A-Par-A-Legals and Bill-Me-Sum-Hours) quote:
"In a sense, stopping a foreclosure by initiating and fully prosecuting a Chapter 13 case to conclusion is firing an elephant gun at a badger. Let’s accomplish the same goal quickly and fairly. Let us create a single purpose Mortgage Adjustment Proceeding, a “MAP” if you will, to be filed in the bankruptcy court where the house is located. The homeowner will file three years federal income tax returns with his MAP petition, along with his real estate ad valorem tax value for the last tax year. The lender must respond by filing a copy of the Note Mortgage or Deed of Trust, the present pay-off amount and a statement identifying an individual who will participate in a mediation session holding full authority to settle all issues. Mediation, but not arbitration, will be mandatory. That is, an agreement must be voluntary.
If mediation is not successful, the bankruptcy judge will determine the fair market value of the property, following which the mortgage will be adjusted to a principal amount equal to fair market value, with standardized terms – say a 25-year amortization – to a five year call, i.e. maturity, at a favorable, but still market rate, without pre-payment or “due on sale” penalties. Obviously, if the borrower has pledged other assets, the lender shall continue to have the values of the additional collateral. Other special circumstances will be adjusted by the bankruptcy court."
The bank failure was not related to home-loan defaults and did not reflect weakness in Missouri's banking system, officials said.
On the wires:
"The demise of the bank is a direct result of alleged improprieties by former bank management, which resulted in past-due loans not being reported and the true condition of the bank being misrepresented," Eric McClure, Missouri's commissioner of finance, said in a statement. "Most of these loans were poorly conceived and inadequately serviced, resulting in losses which exhausted the bank's capital and ultimately resulted in its failure."
Sorry for the cross-post - I dropped it in the "Judge Bohm" thread by mistake so I copied it here.
I happened to be watching the ticker in the Google "NYSE ABK News" section at the close. Just hanging around to see if they had any more 'Friday tricks' up their sleeve - talk about a 'zombie stock'..these folks just won't die. Anyway there had been a couple of 1.5M share buys during the day and was trying to figure out if they were shorts covering or 'pops' by 'Manipulators' trying to squeeze the shorts into panic mode. And at the very closing tick there was a 10.5M volume spike and the share value jumped from $7.25 to $9.50. It looked like a single transaction to me. WTF!! Maybe some kinda ticker glitch.. Nope. I've been looking for an answer ever since and when I saw mention here I couldn't resist chiming in with a me to.
Anyone have a logical opinion (or facts) concerning this move? Rich says classic P&D but I don't know - this thing was huge (10.M shares) relative to ABK volume.
well i can tell u that on my software program for TMA i can see AH trading all the way to the end and despite the pump at around 6pm to 1.70 it closed at 1.35 down 18.18%.
2x Capital leveraged. Not 32x like Carlyle. Just 2x.
The Citi Never Sleeps and They Ain't in the Storage Business Either Quote:
"Making matters worse: Unlike other lenders making margin calls, Citigroup [prime broker] was willing to liquidate inventory below loan values - the value it had assigned the bond when they initially provided the fund its margin - and recognize losses just to get the bonds off its books. A Citigroup spokeswoman declined comment.
In one case, Citigroup seized collateral from Tequesta and put it up for sale in a bid-list auction. According to a trader at another firm, however, Citigroup's mortgage trading desk offered to sell Tequesta's bonds to regional brokerage firms at prices even lower than listed prices. In another instance, Tequesta's portfolio managers were told by Citigroup rivals that its seized bonds had been offered to other hedge funds for more than $25 below where they had been trading in the previous days."
TulipsAllOverAgain writes:
Could the trades be short-covering?
Thanks Tulips That was why I was watching ABK earlier. A friend and I were kickin' this around last nite... I said Ya know..if I was short ABK (and I suspect some of the hedgies are - not to mention Ackman) I would cover @$6.75 and load up again on shorts tomorrow on the pop. But a 10.M share @$7.90 'pop' bid on the close. I don't see the rationale but something smells fishy here. There has gotta be a story here...
Couldn't find the link, but there are more casino projects under construction on the Strip (in dollar terms) than currently exist. Tremendous new capacity coming on line in the next 3 years. Should be interesting.
OT: While looking to see how I could buy some corporate default protection I found CBOT had added an exchange based credit default contract that traded off an index of 50 liquid CDXs (credit default swaps on 50 large companies).
The time-worn saying among surgeons, bankers, chemists and perhaps investors is: The solution to the pollution is dilution.
I have to say, I'm sorry, but for anyone that wants a bailout, Ben and I can't help you, regardless if you are a global bank with trillions of losses, poor negros, white trash or some other grey or off yellow -- we just don't fuc-ing care!
Some of you that may lost your asses in The Dotcom debacle may remember the happy times, when you had an opportunity to file your IRS return and take advantage of the time honored tradition of a carry forward on a loss; many of you may recall, carry losses for six God damn years, but it worked out pretty damn good while your fuc-ing home value vaulted to the top of the pie chart....yah know!
Well, now we separate the wheat from the chaff ( inedible, dry, scaly protective casings of the seeds of cereal grain) and those of you that made the same JDSU-like dotcom speculative bet on a house (not a home) or going to be fuc-ed i the a*% hole fairly hard I'm told!
Nonetheless, one should feel a sense of brotherhood, sisterhood, unclehood, auntihood in the fact that many banks and financially related enterprises that took the sme types of JDSU over-leveraged retarded speculative casino bets on synthetic derivatives brought to by the fine folks @ SIFMA, will also be fuc-ed as if the sun will never rise!
I feel that is fair, that is honest that is equal and it sets an example forlittle kids that want to play around bonfires around camping time in the woods. You have to teach these little fellas, little ladies that it is not smart or even wise to add heavy amounts of lighter fluid which you are standing in front of and sometimes, too close to be safe! Those fires can burn, and it just does not make sense to place your little uns right in the path of that potential explosion. Many of you from school will remember some things related to gases and vapors and think in terms of combustion, but often, many people are not educated and even those with Phds and jobs at ratings agencies, and government positions like the Fed (see Warsh) have no practical experiences from which to draw from.
These are the people that often cause accidents, so we all need to be on our toes and make sure where they are and what they are doing. These people are what we call, retarded, and that is not a bad word, just a condition which may cause a person to do something reckless, which may not be their fault, it may the fault of a genetic sequence which results in: low or limited in intellectual or emotional development or academic progress.
Be that as it may be, please do not play with fire, or let people like Warsh bet your money on something stupid. Please watch these people and make sure you know which meetings they go to, what they say, how much they are payed, what it costs you as a taxpayer and above all, make sure you do your homework so that you dont get burned by someone that is retarded!
C!t!bank, Noo Ywok, NY was closed today by the Commissioner of Noo Ywok's Division of Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect depositors, the FDIC Board of Directors approved the assumption of C!t!bank's insured deposits by ChinaHappy Bank, Rich Hill, Missouri.
The failed bank's sole remaining office will reopen Monday as a branch of ChinaHappy Bank. Depositors of C!t!bank will automatically become depositors of the assuming bank.
As of December 31, 2008, C!t!bank had total assets of $18.70 and total deposits of $13.60. ChinaHappy Bank has agreed to assume $12.50 of the failed bank's insured deposits for a premium of 4.26 percent.
At the time of closing, C!t!bank had approximately $1.10 in 33 deposit accounts that exceeded the federal deposit insurance limit. These customers will have immediate access to their insured deposits, and they will become creditors of the receivership for the amount of their uninsured funds.
This is just another previously large, now small bank (PLNSB).
March 7 (Bloomberg) MBIA Inc., under threat of a downgrade, asked Fitch Ratings to stop issuing credit rankings on its insurance units, saying the grades have become less valuable to investors, of little use to the company and too expensive to maintain.
I listened to Bloomberg today and they had Congress hearings on exec comp. Very funny show, guy crying about tax on corp jet travel for his wife, another justifying 10M of bonus when biz is in trouble, another crying about principles rather than amount, another stating talent needs. Pathetic.
Presently reading "Panic of 1907" and chapter 4 is entitled "Credit Anorexia".
Recently was reading "Crisis of the Old Order" by Schlesinger - first of 3 vol history of GD and Roosvelt. Really taken to find over 7 comparables between 1928/9 and today. Actually went through with pen and checked them off.
Milton and Conyers, who both sit on the pension board, agreed to drop their reports, according to Conyers former chief of staff Sam Riddle and Detroit Spokesman James Canning.
Last month, Milton filed a police report saying Conyers threatened him with a gun and had to be restrained after the two got into a heated argument at a board meeting.
The U.S. Securities and Exchange Commission warned public pension funds on Thursday that they risk running afoul of anti-fraud laws if they do not have proper procedures in place to prevent wrongdoing.
The SEC issued a report reminding public pension funds of their legal responsibilities after an agency investigation involving questions of insider trading at the Retirement Systems of Alabama (RSA).
Fortunately have alot of farm produce/orchards in area and will utilize them a lot more this summer. Had dropped off due to dealing with 3 kids.
Actually am going to take some of my IRA contribution and use it instead for some stocking up of non-perishable items this weekend. Talked about it with spouse and the return on that investment is actually superior to putting it into some instrument and watch it get torched.
Each small bank failure saps the minimal human and financial resources of the FDIC leaving it less prepared to handle the next often bigger bank failure. It is like water on a stone and a canary in a coal mine.
Here is additional FDIC information about this latest insignificant 'small' bank failure. FDIC: Failed Bank Information - Hume Bank, Hume, MO
Why are interest rates on 30-year fixed-rate mortgages rising even as the Federal Reserve slashes interest rates and yields on Treasury bonds fall?
The answer is that the mortgage market is short of roughly $1 trillion in capital, according to Paul Miller, an analyst at Friedman, Billings, Ramsey.
The modern mortgage market works with lots of leverage, or borrowed money. Investors, including hedge funds and mortgage real estate investment trusts, buy mortgage securities, but finance a lot of their purchases with this leverage.
FBR's Miller estimates that $11 trillion of outstanding U.S. mortgage debt is supported with roughly $587 billion of equity. That's a leverage ratio of 19 to one.
Total money market mutual fund assets rose by $22.64 billion to $3.451 trillion for the week, the Investment Company Institute said Thursday.
Assets of the nation's retail money market mutual funds rose by $3.66 billion in the latest week to $1.240 trillion.
Assets of taxable money market funds in the retail category rose by $1.30 billion to $948.19 billion for the week ended Wednesday, the Washington-based mutual fund trade group said. Tax-exempt fund assets rose by $2.37 billion to $292.29 billion.
Assets of institutional money market funds rose by $18.98 billion to $2.210 trillion for the same period. Among institutional funds, taxable money market fund assets rose by $16.34 billion to $2.032 trillion; assets of tax-exempt funds rose by $2.63 billion to $178.10 billion.
The seven-day average yield on money market mutual funds fell in the week ended Tuesday to 2.78 percent from 2.89 percent the previous week, said Money Fund Report, a service of iMoneyNet Inc. in Westboro, Mass. The 30-day average yield fell to 2.96 percent from 3.07 percent, according to Money Fund Report.
There is a flight to cash and the build-up has been massive and unprecedented, said Peter Crane, publisher of the monthly Money Fund Intelligence newsletter.
When you get rate cuts stacked on each other, institutions ride the lag, said Mr Crane. Money market funds have a reputation for safety, because they promise to maintain the value of every dollar invested.
Treasury bills, the safest and most liquid short-term government debt instruments, have been in rampant demand, pushing implied yields on one-month Treasury bills to 2.08 per cent from 2.31 per cent in the space of a week.
This is in spite of a surge in the supply of bills as the government funds its growing deficit.
The extent of the move in the Treasury bill markets, where there has been so much new supply, is an indication of how large the month-end settlement date pressure is for the banks, said Lou Crandall, economist at Wrightson ICAP.
It is also a foretaste of how serious funding pressures could become at the end of March, which is a real live quarter-end.
Traders in the money markets are also displaying signs of fear. One key example can be seen in what is known as the TED spread the difference between the three-month Treasury bill and three-month interbank lending rate, or Libor. It has grown to 120 basis points.
After all the manoeuvres by the Fed since the summer, the TED spread is still five times normal levels, said David Rosenberg, chief economist at Merrill Lynch.
The Federal Reserve said today it plans to increase loans to banks this month to offset ``heightened liquidity pressures'' and a deepening credit crisis. Money-market rates are rising...
The odds of the Fed cutting the target rate for overnight lending between banks by 100 basis points on March 18 rose as high as 34 percent today, from zero yesterday, fed funds futures on the Chicago Board of Trade showed. The balance of the bets was for a 75 basis-point reduction.
The difference between what banks and the government pay for three-month loans has also indicated an increased reluctance to lend. The so-called TED spread has risen 22 basis points to 1.44 percentage point this week.
The three-month money-market rate for pounds rose 1 basis point to 5.78 percent, the highest since Jan. 5, the British Bankers' Association said. The rate for dollars fell 5 basis points to 2.94 percent, the lowest since March 2005.
There's also a large spectrum from AAA to D, but that doesn't stop Moody's or Standard and Poor's from crashing straight through the entire spectrum in one wave of the pen...
Virginia's Tom Davis, the top Republican on the House oversight panel, questioned the utility of attacking CEO pay, saying lower compensation packages aren't likely to help the U.S. economy or consumers who have lost their homes.
Punishing individual corporate executives with public floggings like this may be a politically satisfying ritual,'' he said.In the end, it won't answer the questions that need to be answered about corporate responsibility and economic stability.''
I imagine Davis is not behind The FBI or DOJ, or SEC, FRB, FASB, FTC and those other American institutions which he fails to support, along with The Flag, The Constitution, The Citizens, but if yahs gots friends in high places, help the mafia!
"The global credit crisis plunged to new depths yesterday as persistent fears over the collapse of a large financial institution caused funding markets to dry up and forced the US Federal Reserve to make available up to $200 billion (£99.3 billion) of emergency financing."
"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
Art Cashin had a great analogy in his commentary yesterday:
"Traders felt a bit like the men at the Alamo yesterday. No, not showing courage in battle. Rather they empathized with the Alamo heroes as they must have felt in the weeks before battle began. There was a boring tediousness, a sense of the nearness of conflict and the normal tensions of daily pressures and more than a few false alarms."
v writes:
I listened to Bloomberg today and they had Congress hearings on exec comp...
I was wondering if anyone else watched this 'hearing'. What a sad state of affairs when a Congressional Hearing (Executive Compensation II: Mortgage CEO Severance Packages) focused on uncovering unethical behavior in the business world is conducted in such an unethical manner. The whole thing was clearly biased in favor of the executives in attendance (the Tanman, Stan O'Neal, et al). Darrell I would like to see a smoking gun but I'm not seeing it Issa came on like a criminal defense attorney and laid the ground work by setting up a defensive position for the execs. He then reigned them in if they strayed from the script and thereby risked weakening their defense. It was a travesty.
The only voice of reason was that of Baltimore congressman, Elijah Cummings. I 'bout choked when he likened them as having golden parachutes and drifting off to the golf course while the economy was in shambles and the home owners worried about where they would sleep at night. Of course they politely listened and then pretended that he had said nothing and went right back to back slappin'. Unfrigginbelievable! It was the biggest public display of self-serving, sanctimonious, disingenuous bull$h!t I've ever witnessed.
"Hume Bank had approximately $1.1 million in 33 deposit accounts that exceeded the federal deposit insurance limit."
I share the bafflement of some previous posters. 33 accounts over $100,000 each has to be at least 3.3 million. Maybe the idea is that the total account value was 4.4 million, of which the first 3.3 was covered.
Billy Hill,
Uninsured depositors often include local churches, city tax accounts, hospitals and other large institutional depositors in small towns. Usually word gets out in time for some of this uninsured money to be moved but not always.
Billy Hill
Your account had 101,000 leaving one dollar uninsured and $100,000 insured. The bank had 33 accounts with deposits above $100,000 or $250,000 for certain retirment accounts. The amounts exceeding insurance coverage may have been relative small amounts in some accounts and larger amounts in other accounts.
Bonzai, I also watched the hearing live, and you are 100% correct.
According to his testimony today, Mozilo is a great American hero and civil rights leader.
Who could've possibly known that giving 100% no-doc pay-option ARM loans with inflated appraisals that had a snowball's chance in hell of being paid back might be a bad idea???? That's just crazy talk.
By the way, the pay packages these jokers today got were apparently well deserved, and in fact Mozilo actually gave up millions, so what's with all the Communist questioning, anyway? Isn't capitalism about socialism for the rich? What is this, Cuba??
My favorite was Daniel Issa, dirtbag congressman from San Diego area, who, and I'm paraphrasing, but you can check the transcript and see I'm not far off, said:
"Hey, in defense of Mozilo, we've all sent our wives around the world on Boeing 737's while we [allegedly] were meeting with world leaders, and we've all stuck the taxpayers for the bill, so don't just pick on Angelo. And you know what? Thank God we do because it's very important. When I'm meeting with a Prince in Saudi Arabia arguing about whether there were 15 Saudi hijackers on 9/11 or 16 the first thing he says is 'hey, can I talk to your wife?'"
Eckalectic, Wheew..I'm relieved to have a 2nd opinion that jived with what I saw. I was beginning to suspect that I had been hanging around here for too long and was gettin' jaded lafin.
You were correct about the travel incident. It sounded as though Mozillo threatened CFC with quitting if they didn't pay the taxes on his wife's air fair... Daniel Issa allowed some trivial discussion regarding minor 'ethical infractions' (such as the aforementioned incident) and accepted their apologies while minimizing the implications of such behavior. On the other hand he deftly sidestepped any meaningful discussion that might have prolonged the hearing and thereby uncovered truly unethical/illegal activity. All in all it was a sham.
The way I see it is that Daniel Issa was assigned the task of disarming a potential political bombshell before it could harm the current administration. Move along folks - there is nothing here to see...
Re: ABK 'final tick' trade(s) today... FYI: The answer to where the buy order for 10+M shares of Ambac at the market closing tick today: Banks buy $500m of Ambac shares
The new shares were priced late at $6.75 a share. In trading in New York, Ambac shares were down more than 6 per cent at $6.95.
Other investors in the deal include existing Ambac shareholders such as Fidelity Investments and Legg Mason. Ambac said Cerberus, the private equity group, bought $50m of shares.
Isn't it ironic that one of the first banks to fail is the Hume Bank. David Hume would be rolling over in his grave if he could see our financial system today. His classical theory of monetary neutrality whereby money is only a representation of value, having an affect on aggregate output just sounds so refreshing-- in light of all this "Wall Street Alchemy!"
I've actually been to Hume. That is a one tiny berg. Had my car keys stolen at a bar on the outskirts one night after dancing with one of the patrons. Seems she was spoken for. 1986. The Green Parrot.
The behavior you are talking about is exactly what the Fed cannot allow to happen.
If savings are yielding 1-2 percent/year and staples(especially coffee, liqour and cigarettes) are increasing 1-2 percent/month, the common man could start hoarding to beat inflation since there is essentially no incentive to save.
With the new TAF facility features, Fed has essentially started the privatization of the US banking system: Covert Nationalism
An interesting argument. Since the Fed won't ever "force" repayment, the TAF capital is essentially equity (not debt). If you agree with that, then the TAF has already replaced about 10% of the banking system's capital in exchange for dodgy collateral.
The FDIc is very efficent at squashing problem ants, while ignoring the rogue elephants that are ruining the economy.
It seems that the shareholders of smaller and mid-sized banks would have a good case for a discriminatory lawsuit against the FDIC, as troubled banks of this size get closed immediately, while the troubled mega banks are allowed to continue wreaking havoc.
Remember, don't ever keep more than $100k in a single bank for this reason! All the insured funds are safe, but all uninsured funds may be lost in this bank!
FYI: The answer to where the buy order for 10+M shares of Ambac at the market closing tick today:
Banks buy $500m of Ambac shares
So what happens when everyone piles in shorting ABK and drives the price of the shares down? How long do the banks watch their much-needed capital go down the drain? If one sells its shares, doesn't the whole house of cards come down?
Kid Cku - FDIC's legal department and outside counsel for FDIC often invoke sovereign immunity case law to defend itself against various law suits of that nature. It almost always wins. See Wiki below for the definition: Sovereign immunity - Wikipedia, the free encyclopedia
Big E writes:
So what happens when everyone piles in shorting ABK and drives the price of the shares down?
That's the way I think it would play out assuming it was simply a matter of investors acquiring the new shares. The mystery, at least to me, is why enter a block buy of this size at the closing tick? I was looking for the price rise in the morning as the new stock/buyers entered positions figuring that the shorts would have covered the prior evening and would be looking to reestablish new short positions on the rise. Not much going on considering...
I noted a couple of ABK 1.5M share 'pops' during the day which I saw as moves by someone attempting to provoke a short squeeze and hopefully push the price up a bit. I figured them for manipulative pops designed to take out the stops and drive the shorts to cover. I surmised that most investors with 'long' positions would want to get the best price possible as they enter a position and keep a low profile. Therefore they would feed the order into the dips. Everything looked fine until the close - ABK was setting on the daily high of $7.48 and 'some fool' places a block buy for 10.5M shares @bid $7.90/ask $7.95!!
My best WAG on this is that some sort of manipulation is at hand. A classic, but risky, P&D ploy in a situation like this is hitting something way above the bid. That should tale out a lot of shorts and produce a rally pushing beyond the bid. Then ya sell everything ya got into that rally... The only folks I am aware of that have that kinda muscle are the IBs holding the ABK stock. Just my WAG - YMMV
Well write downs started small. $1M here $1M there, and FDIC has a problem on it's hands.
First?
Cheers,
Always on Friday, eh?
Interesting last minute action on ABK and TMA today:
Ambac, Thornburg Last-Moment Stock Trades Spur Gains (Update1) - Bloomberg.com
ABK: Basic Chart for AMBAC FINL GRP INC - Yahoo! Finance
TMA: Basic Chart for THORNBURG MTG INC - Yahoo! Finance
There's a large spectrum from Hume to Citigroup.
Will we get to see the full spectrum in this crisis?
Too Bad Too Small To Save
Meanwhile, a little behind the scenes view of the expanded TAF.
http://thumbsnap.com/v/MMWgOxGZ.jpg
"Hume Bank had approximately $1.1 million in 33 deposit accounts that exceeded the federal deposit insurance limit."
It really is amazing that individuals do not really keep the FDIC limits in mind.
I told all the family and friends visiting from up north this year to please keep this in mind...
Chris
Hume must have been state chartered, as the state regulator locked the doors, and handed the keys to FDIC. $13.6 million in deposits is pretty small these days.
RayOnTheFarm,
Unless you're a depositer.
Cheers,
More subslime..credit bubble po...stuff:
Stand by for new subprime crisis | News
Cheers,
A little rock blogging.
Rolling what?
YouTube - Rolling Stones - Satisfaction - 1969
Cheers,
It's strange that late Friday always has this type of action. Must have something to do the moon and planets.
Anonymous
Thanks straightening me out on the Billion problem of mine. I feel so much better know.
jo6pac
The race to the bottom continues.
This makes the second small bank in Missouri to fail.
This is just a small thing . . . but more and more, the parallels between today and 1929-30 are astounding me.
If any of you glodbugs and bubbleheads have a literary bone in your body, pick up You Can't Go Home Again.
Fantastic book. Frighteningly familiar.
What do you make of these shady ABK and Thornburg trades?
Ambac, Thornburg Last-Moment Stock Trades Spur Gains (Update1) - Bloomberg.com
Duh. Guest was waaay ahead of me on that. Still, what the hell gives?
Something stinks.
"As of December 31, 2007, Hume Bank had total assets of $18.7 million and total deposits of $13.6 million."
So it reported a 27% capital ratio and failed? Someone was sleeping on the job.
Can I get a Doc Holliday 4 in a row?
Gary, Misean-
Econbrowser: Commodity prices and the Fed
could be interesting.
rc-
"transient haircuts"
Better have a 4-gal bucket of Barbicide in that market.
Back to reading.
rc- I think any further rate cuts at this point, with inflation as it is, is the height or irresponsible behavior.
yes, I realize the importance of "saving" our financial system . . . but we all know damn well this is also yet another transfer of wealth up the chain.
It sickens me.
Now, back to that Bloomberg article . . . what the hell happened in those stocks at the end of the day? There is a story here.
Hume Bank had approximately $1.1 million in 33 deposit accounts that exceeded the federal deposit insurance limit."
How does the math work there????
Classic p&d.
INO Equities Stocks Indexes - CONTINUOUS COMMODITY INDEX (NYBOT:CI) Price Chart and Quote
Well, I don't know what will happen now. We've got some difficult days ahead. But it really doesn't matter with me now, because I've been to the mountaintop.
A million here...a million there...pretty soon, you're talking about real money...and a real problem.
Gary I'm interested! As a pure gamble I bought twenty 2010 calls on TMA. I thought it was worth the $50.
This is a small potato. I've been looking at about a dozen banks that I think will be in receivership via the FDIC within the next 6 months, the largest of which is Fremont (with about $8 billion in assets) and the smallest of which is Integrity (yeah, ironic huh?) in Atlanta (with about $700 million in assets). Once some of these medium-sized banks start getting taken over by the FDIC we're going to see some additional fireworks in the banking sector.
Somewhat OT. I have a newbie question about monetary policy if there are any economists out there:
In general, how many basis points does the Fed have to cut rates to turn a fundamentally dishonest and irresponsible person into a reliable borrower?
I'm concerned seeing how the credit markets are breaking down because nobody can trust each other anymore. I think it's imperative that the Fed cut rates as agressively as possible to make our population more trustworthy so lending becomes something other than financial suicide. How else can we unfreeze the credit markets?
because nobody can trust each other anymore.
ac, I think its more of a function of "no one has anything worth anything any more...."
Texas Attorney proposes Mortgage Adjustment Proceeding as stand-alone filing in US Bankruptcy Court where home is located:
"Henry Simon is a graduate of Yale University and the University of Texas Law School and has practiced law, with emphasis on areas involving insolvency, in Fort Worth for many years. Simon is a partner in the firm of Barlow Garsek & Simon."
http://www.fwbusinesspress.com/display.php?id=7161
The Git-Er-Done (and Hire-Me-A-Par-A-Legals and Bill-Me-Sum-Hours) quote:
"In a sense, stopping a foreclosure by initiating and fully prosecuting a Chapter 13 case to conclusion is firing an elephant gun at a badger. Let’s accomplish the same goal quickly and fairly. Let us create a single purpose Mortgage Adjustment Proceeding, a “MAP” if you will, to be filed in the bankruptcy court where the house is located. The homeowner will file three years federal income tax returns with his MAP petition, along with his real estate ad valorem tax value for the last tax year. The lender must respond by filing a copy of the Note Mortgage or Deed of Trust, the present pay-off amount and a statement identifying an individual who will participate in a mediation session holding full authority to settle all issues. Mediation, but not arbitration, will be mandatory. That is, an agreement must be voluntary.
If mediation is not successful, the bankruptcy judge will determine the fair market value of the property, following which the mortgage will be adjusted to a principal amount equal to fair market value, with standardized terms – say a 25-year amortization – to a five year call, i.e. maturity, at a favorable, but still market rate, without pre-payment or “due on sale” penalties. Obviously, if the borrower has pledged other assets, the lender shall continue to have the values of the additional collateral. Other special circumstances will be adjusted by the bankruptcy court."
How does the math work there????
fcuktard | 03.07.08 - 9:41 pm | #
Just a guess but I would say 33 accounts were over the 100k limit by a average of about 35-40k each. Some maybe more,others less.
Chris
I don't feel the love CR.
The bank failure was not related to home-loan defaults and did not reflect weakness in Missouri's banking system, officials said.
On the wires:
"The demise of the bank is a direct result of alleged improprieties by former bank management, which resulted in past-due loans not being reported and the true condition of the bank being misrepresented," Eric McClure, Missouri's commissioner of finance, said in a statement. "Most of these loans were poorly conceived and inadequately serviced, resulting in losses which exhausted the bank's capital and ultimately resulted in its failure."
blowncue, not sure if you noticed but last night someone referred to you as "browncue" . . . nearly fell out of my chair.
Yeah, I saw that, but what really made me disappointed was that she turned out to be married.
It's a tough market.
Re: ABK 'final tick' trade(s) today...
Sorry for the cross-post - I dropped it in the "Judge Bohm" thread by mistake so I copied it here.
I happened to be watching the ticker in the Google "NYSE ABK News" section at the close. Just hanging around to see if they had any more 'Friday tricks' up their sleeve - talk about a 'zombie stock'..these folks just won't die. Anyway there had been a couple of 1.5M share buys during the day and was trying to figure out if they were shorts covering or 'pops' by 'Manipulators' trying to squeeze the shorts into panic mode. And at the very closing tick there was a 10.5M volume spike and the share value jumped from $7.25 to $9.50. It looked like a single transaction to me. WTF!! Maybe some kinda ticker glitch.. Nope. I've been looking for an answer ever since and when I saw mention here I couldn't resist chiming in with a me to.
Anyone have a logical opinion (or facts) concerning this move? Rich says classic P&D but I don't know - this thing was huge (10.M shares) relative to ABK volume.
From the call report:
- $1.4 million of intangibles, primarily goodwill.
- $1.4 million Tier 1 capital.
- $2.2 million FHLB advances.
bonzai, the bloomberg article describes it as block trades . . . which does not sound like pump and dump to me.
Manipulation, on the other hand . . .
risk capital,
I'm absolutely aghast at MBIA's unmitigated gall. I hope Fitch fries those **ckers.
Could the trades be short-covering?
FDIC: Hume Bank Fails
how humeiliating.
(rimshot)
well i can tell u that on my software program for TMA i can see AH trading all the way to the end and despite the pump at around 6pm to 1.70 it closed at 1.35 down 18.18%.
how do u like that NLY huh? dropped further AH from 15 down to 14.30 or -9.55% on the day.
Anatomy of a hedge fund collapse:
Tequesta: The death of a hedge fund - Mar. 7, 2008
Tequesta Mortgage:
AAA Jumbo Prime Mortgages.
2x Capital leveraged. Not 32x like Carlyle. Just 2x.
The Citi Never Sleeps and They Ain't in the Storage Business Either Quote:
"Making matters worse: Unlike other lenders making margin calls, Citigroup [prime broker] was willing to liquidate inventory below loan values - the value it had assigned the bond when they initially provided the fund its margin - and recognize losses just to get the bonds off its books. A Citigroup spokeswoman declined comment.
In one case, Citigroup seized collateral from Tequesta and put it up for sale in a bid-list auction. According to a trader at another firm, however, Citigroup's mortgage trading desk offered to sell Tequesta's bonds to regional brokerage firms at prices even lower than listed prices. In another instance, Tequesta's portfolio managers were told by Citigroup rivals that its seized bonds had been offered to other hedge funds for more than $25 below where they had been trading in the previous days."
Worth a read...
TulipsAllOverAgain writes:
Could the trades be short-covering?
Thanks Tulips
That was why I was watching ABK earlier. A friend and I were kickin' this around last nite... I said Ya know..if I was short ABK (and I suspect some of the hedgies are - not to mention Ackman) I would cover @$6.75 and load up again on shorts tomorrow on the pop. But a 10.M share @$7.90 'pop' bid on the close. I don't see the rationale but something smells fishy here. There has gotta be a story here...
"Lacking bidders, Tequesta's bonds fell in value."
IB's-"whats good for me is not good for you."
Paul Krugman is scared: What is to be done? - Paul Krugman Blog - NYTimes.com
He is usually very level-headed.
OT, the next big bubble, casinos, gets ready to burst:
Nevada's January gambling revenue falls 4.8 pct
| Reuters
Couldn't find the link, but there are more casino projects under construction on the Strip (in dollar terms) than currently exist. Tremendous new capacity coming on line in the next 3 years. Should be interesting.
Nuke
I hope that Sheldon Adelson is ruined, if so. One of the worst people in the world.
Missed Information
Being scared, right now, is pretty level-headed.
Rising costs move down the food chain
Cheese, up 14.1%
Yogurt, up 8.3%
Ground coffee, up 7.1%
Frozen pizza, up 5.5%
Rising costs move down the food chain - MarketWatch
OT: While looking to see how I could buy some corporate default protection I found CBOT had added an exchange based credit default contract that traded off an index of 50 liquid CDXs (credit default swaps on 50 large companies).
It seems this graph:
Sorry. Page not found.
might make a good reverse cliff diving post on the blog.
and .. has anyone had experience buying these things? if you're a doom and gloomer it seems like a nice hedge.
The time-worn saying among surgeons, bankers, chemists and perhaps investors is: The solution to the pollution is dilution.
I have to say, I'm sorry, but for anyone that wants a bailout, Ben and I can't help you, regardless if you are a global bank with trillions of losses, poor negros, white trash or some other grey or off yellow -- we just don't fuc-ing care!
Some of you that may lost your asses in The Dotcom debacle may remember the happy times, when you had an opportunity to file your IRS return and take advantage of the time honored tradition of a carry forward on a loss; many of you may recall, carry losses for six God damn years, but it worked out pretty damn good while your fuc-ing home value vaulted to the top of the pie chart....yah know!
Well, now we separate the wheat from the chaff ( inedible, dry, scaly protective casings of the seeds of cereal grain) and those of you that made the same JDSU-like dotcom speculative bet on a house (not a home) or going to be fuc-ed i the a*% hole fairly hard I'm told!
Nonetheless, one should feel a sense of brotherhood, sisterhood, unclehood, auntihood in the fact that many banks and financially related enterprises that took the sme types of JDSU over-leveraged retarded speculative casino bets on synthetic derivatives brought to by the fine folks @ SIFMA, will also be fuc-ed as if the sun will never rise!
I feel that is fair, that is honest that is equal and it sets an example forlittle kids that want to play around bonfires around camping time in the woods. You have to teach these little fellas, little ladies that it is not smart or even wise to add heavy amounts of lighter fluid which you are standing in front of and sometimes, too close to be safe! Those fires can burn, and it just does not make sense to place your little uns right in the path of that potential explosion. Many of you from school will remember some things related to gases and vapors and think in terms of combustion, but often, many people are not educated and even those with Phds and jobs at ratings agencies, and government positions like the Fed (see Warsh) have no practical experiences from which to draw from.
These are the people that often cause accidents, so we all need to be on our toes and make sure where they are and what they are doing. These people are what we call, retarded, and that is not a bad word, just a condition which may cause a person to do something reckless, which may not be their fault, it may the fault of a genetic sequence which results in: low or limited in intellectual or emotional development or academic progress.
Be that as it may be, please do not play with fire, or let people like Warsh bet your money on something stupid. Please watch these people and make sure you know which meetings they go to, what they say, how much they are payed, what it costs you as a taxpayer and above all, make sure you do your homework so that you dont get burned by someone that is retarded!
C!t!bank, Noo Ywok, NY was closed today by the Commissioner of Noo Ywok's Division of Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect depositors, the FDIC Board of Directors approved the assumption of C!t!bank's insured deposits by ChinaHappy Bank, Rich Hill, Missouri.
The failed bank's sole remaining office will reopen Monday as a branch of ChinaHappy Bank. Depositors of C!t!bank will automatically become depositors of the assuming bank.
As of December 31, 2008, C!t!bank had total assets of $18.70 and total deposits of $13.60. ChinaHappy Bank has agreed to assume $12.50 of the failed bank's insured deposits for a premium of 4.26 percent.
At the time of closing, C!t!bank had approximately $1.10 in 33 deposit accounts that exceeded the federal deposit insurance limit. These customers will have immediate access to their insured deposits, and they will become creditors of the receivership for the amount of their uninsured funds.
This is just another previously large, now small bank (PLNSB).
Casino news expected; just another body blow to Vegas which is already quite bloody and stumbling. Should help my LVS PUTs.
One can't make up stuff this good.
MBIA, Facing Downgrade, Asks Fitch to Stop Rating
March 7 (Bloomberg) MBIA Inc., under threat of a downgrade, asked Fitch Ratings to stop issuing credit rankings on its insurance units, saying the grades have become less valuable to investors, of little use to the company and too expensive to maintain.
I listened to Bloomberg today and they had Congress hearings on exec comp. Very funny show, guy crying about tax on corp jet travel for his wife, another justifying 10M of bonus when biz is in trouble, another crying about principles rather than amount, another stating talent needs. Pathetic.
Gary writes:
This is just a small thing . . . but more and more, the parallels between today and 1929-30 are astounding me.
If any of you glodbugs and bubbleheads have a literary bone in your body, pick up You Can't Go Home Again.
Fantastic book. Frighteningly familiar.
Gary | Homepage | 03.07.08 - 9:21 pm
Presently reading "Panic of 1907" and chapter 4 is entitled "Credit Anorexia".
Recently was reading "Crisis of the Old Order" by Schlesinger - first of 3 vol history of GD and Roosvelt. Really taken to find over 7 comparables between 1928/9 and today. Actually went through with pen and checked them off.
Uff Da
Milton and Conyers, who both sit on the pension board, agreed to drop their reports, according to Conyers former chief of staff Sam Riddle and Detroit Spokesman James Canning.
Last month, Milton filed a police report saying Conyers threatened him with a gun and had to be restrained after the two got into a heated argument at a board meeting.
freep.com | | Detroit Free Press
sorry about the last one
The U.S. Securities and Exchange Commission warned public pension funds on Thursday that they risk running afoul of anti-fraud laws if they do not have proper procedures in place to prevent wrongdoing.
The SEC issued a report reminding public pension funds of their legal responsibilities after an agency investigation involving questions of insider trading at the Retirement Systems of Alabama (RSA).
does this get any better? encore!
what the F happened to wheat, corn and soybeans today? I guess there is a sudden glut.
i heard you can stretch an ounce of GLOD into a 1 mile long wire.
Who signs Bernanke's paycheck?
RE Bear:
Fortunately have alot of farm produce/orchards in area and will utilize them a lot more this summer. Had dropped off due to dealing with 3 kids.
Actually am going to take some of my IRA contribution and use it instead for some stocking up of non-perishable items this weekend. Talked about it with spouse and the return on that investment is actually superior to putting it into some instrument and watch it get torched.
I prefer my Roth Decaf, thank you.
"This is just another small bank."
Each small bank failure saps the minimal human and financial resources of the FDIC leaving it less prepared to handle the next often bigger bank failure. It is like water on a stone and a canary in a coal mine.
Here is additional FDIC information about this latest insignificant 'small' bank failure.
FDIC: Failed Bank Information - Hume Bank, Hume, MO
Why are interest rates on 30-year fixed-rate mortgages rising even as the Federal Reserve slashes interest rates and yields on Treasury bonds fall?
The answer is that the mortgage market is short of roughly $1 trillion in capital, according to Paul Miller, an analyst at Friedman, Billings, Ramsey.
The modern mortgage market works with lots of leverage, or borrowed money. Investors, including hedge funds and mortgage real estate investment trusts, buy mortgage securities, but finance a lot of their purchases with this leverage.
FBR's Miller estimates that $11 trillion of outstanding U.S. mortgage debt is supported with roughly $587 billion of equity. That's a leverage ratio of 19 to one.
Mortgage market needs $1 trillion to support prices, FBR says - MarketWatch
Total money market mutual fund assets rose by $22.64 billion to $3.451 trillion for the week, the Investment Company Institute said Thursday.
Assets of the nation's retail money market mutual funds rose by $3.66 billion in the latest week to $1.240 trillion.
Assets of taxable money market funds in the retail category rose by $1.30 billion to $948.19 billion for the week ended Wednesday, the Washington-based mutual fund trade group said. Tax-exempt fund assets rose by $2.37 billion to $292.29 billion.
Assets of institutional money market funds rose by $18.98 billion to $2.210 trillion for the same period. Among institutional funds, taxable money market fund assets rose by $16.34 billion to $2.032 trillion; assets of tax-exempt funds rose by $2.63 billion to $178.10 billion.
The seven-day average yield on money market mutual funds fell in the week ended Tuesday to 2.78 percent from 2.89 percent the previous week, said Money Fund Report, a service of iMoneyNet Inc. in Westboro, Mass. The 30-day average yield fell to 2.96 percent from 3.07 percent, according to Money Fund Report.
A little old, but some nice bits:
There is a flight to cash and the build-up has been massive and unprecedented, said Peter Crane, publisher of the monthly Money Fund Intelligence newsletter.
When you get rate cuts stacked on each other, institutions ride the lag, said Mr Crane. Money market funds have a reputation for safety, because they promise to maintain the value of every dollar invested.
Treasury bills, the safest and most liquid short-term government debt instruments, have been in rampant demand, pushing implied yields on one-month Treasury bills to 2.08 per cent from 2.31 per cent in the space of a week.
This is in spite of a surge in the supply of bills as the government funds its growing deficit.
The extent of the move in the Treasury bill markets, where there has been so much new supply, is an indication of how large the month-end settlement date pressure is for the banks, said Lou Crandall, economist at Wrightson ICAP.
It is also a foretaste of how serious funding pressures could become at the end of March, which is a real live quarter-end.
Traders in the money markets are also displaying signs of fear. One key example can be seen in what is known as the TED spread the difference between the three-month Treasury bill and three-month interbank lending rate, or Libor. It has grown to 120 basis points.
After all the manoeuvres by the Fed since the summer, the TED spread is still five times normal levels, said David Rosenberg, chief economist at Merrill Lynch.
FBI Investigates Countrywide
FBI Investigates Countrywide - WSJ.com
The Federal Reserve said today it plans to increase loans to banks this month to offset ``heightened liquidity pressures'' and a deepening credit crisis. Money-market rates are rising...
The odds of the Fed cutting the target rate for overnight lending between banks by 100 basis points on March 18 rose as high as 34 percent today, from zero yesterday, fed funds futures on the Chicago Board of Trade showed. The balance of the bets was for a 75 basis-point reduction.
The difference between what banks and the government pay for three-month loans has also indicated an increased reluctance to lend. The so-called TED spread has risen 22 basis points to 1.44 percentage point this week.
The three-month money-market rate for pounds rose 1 basis point to 5.78 percent, the highest since Jan. 5, the British Bankers' Association said. The rate for dollars fell 5 basis points to 2.94 percent, the lowest since March 2005.
There's a large spectrum from Hume to Citigroup.
There's also a large spectrum from AAA to D, but that doesn't stop Moody's or Standard and Poor's from crashing straight through the entire spectrum in one wave of the pen...
Re: Countrywide and that crook:
Virginia's Tom Davis, the top Republican on the House oversight panel, questioned the utility of attacking CEO pay, saying lower compensation packages aren't likely to help the U.S. economy or consumers who have lost their homes.
Punishing individual corporate executives with public floggings like this may be a politically satisfying ritual,'' he said.In the end, it won't answer the questions that need to be answered about corporate responsibility and economic stability.''
"The global credit crisis plunged to new depths yesterday as persistent fears over the collapse of a large financial institution caused funding markets to dry up and forced the US Federal Reserve to make available up to $200 billion (£99.3 billion) of emergency financing."
US Fed releases $200bn as credit crisis hits new depths - Times Online
This does sound something bigger than Hume bank
Haunted Markets
"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
[or Larry Kudlow/Dennis Kneale, CNBC, anytime]
Also,
Art Cashin had a great analogy in his commentary yesterday:
"Traders felt a bit like the men at the Alamo yesterday. No, not showing courage in battle. Rather they empathized with the Alamo heroes as they must have felt in the weeks before battle began. There was a boring tediousness, a sense of the nearness of conflict and the normal tensions of daily pressures and more than a few false alarms."
v writes:
I listened to Bloomberg today and they had Congress hearings on exec comp...
I was wondering if anyone else watched this 'hearing'. What a sad state of affairs when a Congressional Hearing (Executive Compensation II: Mortgage CEO Severance Packages) focused on uncovering unethical behavior in the business world is conducted in such an unethical manner. The whole thing was clearly biased in favor of the executives in attendance (the Tanman, Stan O'Neal, et al). Darrell I would like to see a smoking gun but I'm not seeing it Issa came on like a criminal defense attorney and laid the ground work by setting up a defensive position for the execs. He then reigned them in if they strayed from the script and thereby risked weakening their defense. It was a travesty.
The only voice of reason was that of Baltimore congressman, Elijah Cummings. I 'bout choked when he likened them as having golden parachutes and drifting off to the golf course while the economy was in shambles and the home owners worried about where they would sleep at night. Of course they politely listened and then pretended that he had said nothing and went right back to back slappin'. Unfrigginbelievable! It was the biggest public display of self-serving, sanctimonious, disingenuous bull$h!t I've ever witnessed.
WSJ - FDIC Might Set a Policy View On New Mortgage Funding - Covered Bonds
FDIC Might Set a Policy View On New Mortgage Funding - WSJ.com
"Hume Bank had approximately $1.1 million in 33 deposit accounts that exceeded the federal deposit insurance limit."
I share the bafflement of some previous posters. 33 accounts over $100,000 each has to be at least 3.3 million. Maybe the idea is that the total account value was 4.4 million, of which the first 3.3 was covered.
Billy Hill,
Uninsured depositors often include local churches, city tax accounts, hospitals and other large institutional depositors in small towns. Usually word gets out in time for some of this uninsured money to be moved but not always.
Billy Hill
Your account had 101,000 leaving one dollar uninsured and $100,000 insured. The bank had 33 accounts with deposits above $100,000 or $250,000 for certain retirment accounts. The amounts exceeding insurance coverage may have been relative small amounts in some accounts and larger amounts in other accounts.
Bonzai, I also watched the hearing live, and you are 100% correct.
According to his testimony today, Mozilo is a great American hero and civil rights leader.
Who could've possibly known that giving 100% no-doc pay-option ARM loans with inflated appraisals that had a snowball's chance in hell of being paid back might be a bad idea???? That's just crazy talk.
By the way, the pay packages these jokers today got were apparently well deserved, and in fact Mozilo actually gave up millions, so what's with all the Communist questioning, anyway? Isn't capitalism about socialism for the rich? What is this, Cuba??
My favorite was Daniel Issa, dirtbag congressman from San Diego area, who, and I'm paraphrasing, but you can check the transcript and see I'm not far off, said:
"Hey, in defense of Mozilo, we've all sent our wives around the world on Boeing 737's while we [allegedly] were meeting with world leaders, and we've all stuck the taxpayers for the bill, so don't just pick on Angelo. And you know what? Thank God we do because it's very important. When I'm meeting with a Prince in Saudi Arabia arguing about whether there were 15 Saudi hijackers on 9/11 or 16 the first thing he says is 'hey, can I talk to your wife?'"
Should be worded, "Hume Bank had approximately $1.1 million in deposits that exceeded the federal deposit insurance limit, in 33 accounts."
Eckalectic, Wheew..I'm relieved to have a 2nd opinion that jived with what I saw. I was beginning to suspect that I had been hanging around here for too long and was gettin' jaded lafin.
You were correct about the travel incident. It sounded as though Mozillo threatened CFC with quitting if they didn't pay the taxes on his wife's air fair... Daniel Issa allowed some trivial discussion regarding minor 'ethical infractions' (such as the aforementioned incident) and accepted their apologies while minimizing the implications of such behavior. On the other hand he deftly sidestepped any meaningful discussion that might have prolonged the hearing and thereby uncovered truly unethical/illegal activity. All in all it was a sham.
The way I see it is that Daniel Issa was assigned the task of disarming a potential political bombshell before it could harm the current administration. Move along folks - there is nothing here to see...
I'll vouch that your take on Issa is a mere paraphrase. The man was excreble, or whatever; it's late.
pd130, close enough for government work...
ex·e·cra·ble adjective
for example,
"...the Republican Party has had an execrable performance in allegedly running the country the past seven years."
It's a very useful word nowadays.
Eckalectic: According to his testimony today, Mozilo is a great American hero and civil rights leader.
http://thumbsnap.com/v/GJZLVsTD.gif
Re: ABK 'final tick' trade(s) today...
FYI: The answer to where the buy order for 10+M shares of Ambac at the market closing tick today:
Banks buy $500m of Ambac shares
The new shares were priced late at $6.75 a share. In trading in New York, Ambac shares were down more than 6 per cent at $6.95.
Other investors in the deal include existing Ambac shareholders such as Fidelity Investments and Legg Mason. Ambac said Cerberus, the private equity group, bought $50m of shares.
Isn't it ironic that one of the first banks to fail is the Hume Bank. David Hume would be rolling over in his grave if he could see our financial system today. His classical theory of monetary neutrality whereby money is only a representation of value, having an affect on aggregate output just sounds so refreshing-- in light of all this "Wall Street Alchemy!"
Isn;t it ironic? mv=py--RIP dear Hume
I've actually been to Hume. That is a one tiny berg. Had my car keys stolen at a bar on the outskirts one night after dancing with one of the patrons. Seems she was spoken for. 1986. The Green Parrot.
A little color for the story.
What kind of assets does a bank own worth $18 million?
homedad43-
The behavior you are talking about is exactly what the Fed cannot allow to happen.
If savings are yielding 1-2 percent/year and staples(especially coffee, liqour and cigarettes) are increasing 1-2 percent/month, the common man could start hoarding to beat inflation since there is essentially no incentive to save.
This scenario is the precursor to hyperinflation.
Eckalectic-
You are failing to take into consideration the signifigant positive analysis of Sebastian's Wright B Model.
Also, Sebastian's preliminary analysis in his new and improved Wright A Model show a DOW 20k by the end of the year.
With the new TAF facility features, Fed has essentially started the privatization of the US banking system:
Covert Nationalism
An interesting argument. Since the Fed won't ever "force" repayment, the TAF capital is essentially equity (not debt). If you agree with that, then the TAF has already replaced about 10% of the banking system's capital in exchange for dodgy collateral.
The FDIc is very efficent at squashing problem ants, while ignoring the rogue elephants that are ruining the economy.
It seems that the shareholders of smaller and mid-sized banks would have a good case for a discriminatory lawsuit against the FDIC, as troubled banks of this size get closed immediately, while the troubled mega banks are allowed to continue wreaking havoc.
Remember, don't ever keep more than $100k in a single bank for this reason! All the insured funds are safe, but all uninsured funds may be lost in this bank!
FYI: The answer to where the buy order for 10+M shares of Ambac at the market closing tick today:
Banks buy $500m of Ambac shares
So what happens when everyone piles in shorting ABK and drives the price of the shares down? How long do the banks watch their much-needed capital go down the drain? If one sells its shares, doesn't the whole house of cards come down?
Kid Cku - FDIC's legal department and outside counsel for FDIC often invoke sovereign immunity case law to defend itself against various law suits of that nature. It almost always wins. See Wiki below for the definition:
Sovereign immunity - Wikipedia, the free encyclopedia
Big E writes:
So what happens when everyone piles in shorting ABK and drives the price of the shares down?
That's the way I think it would play out assuming it was simply a matter of investors acquiring the new shares. The mystery, at least to me, is why enter a block buy of this size at the closing tick? I was looking for the price rise in the morning as the new stock/buyers entered positions figuring that the shorts would have covered the prior evening and would be looking to reestablish new short positions on the rise. Not much going on considering...
I noted a couple of ABK 1.5M share 'pops' during the day which I saw as moves by someone attempting to provoke a short squeeze and hopefully push the price up a bit. I figured them for manipulative pops designed to take out the stops and drive the shorts to cover. I surmised that most investors with 'long' positions would want to get the best price possible as they enter a position and keep a low profile. Therefore they would feed the order into the dips. Everything looked fine until the close - ABK was setting on the daily high of $7.48 and 'some fool' places a block buy for 10.5M shares @bid $7.90/ask $7.95!!
My best WAG on this is that some sort of manipulation is at hand. A classic, but risky, P&D ploy in a situation like this is hitting something way above the bid. That should tale out a lot of shorts and produce a rally pushing beyond the bid. Then ya sell everything ya got into that rally... The only folks I am aware of that have that kinda muscle are the IBs holding the ABK stock. Just my WAG - YMMV