I hate to go all off-topic here, but I wonder if Sebastian noticed that Q4 2007 was revised down to contraction? Seems that we should give CR a big pat on the back since his blue bars were right on schedule! Kudos CR, it looks like recession start will be Q4 of 2007. Bloomberg's feed this morning had it early.
Let me be the first to wish you a Good Morning, Tanta.
We got our mortgage from a Building & Loan Assoc.
The office was what appeared to be a closed candy store. The crotchety old woman who ran the place had a single bare light bulb over her desk, and yes, all the payments went into a ledger book by hand. LOL.
I have third hand knowledge that they invested in Bennigans. And they didn't want people to know, because they were in England and, well, Bennigans is/was an Irish themed restaurant.
I wish I took a screen shot of the headline on the GDP story that was on the NY Times website about 15 minutes ago... it was bizarrely upbeat. Now it's completely changed and mentions "tepid growth." Do the headline writers just not understand what is going on, or are they being ordered to put on a happy face and then someone finally said "Oh, enough of this BS..."
I should convince my investment club to become a credit union?
Are there regulatory requirements, auditing rules say, that require computers directly or indirectly at this point. I find it hard to believe that they didn't have to report some numbers to somebody that wouldn't have make it easy to notice how odd this was.
If the answer's yes, then one presumes there is a database query waiting to be run over that data set.
Ellen:
They are told to put the best face possible on it. What has CNBC said about negative Q4 growth? Anything? Or do they say it is a great time to buy stocks(Is there anytime not to buy according to CNBC)?
I always suspected Tanta had ink on her blouse sleeves and green eyeshades. I also suspect she's on at least her 3rd HP-12C and can still name the mainframes she's retired. She's probably lost track of the number of programmers she's reamed out for stupid cobol coding.
OK, not quite on topic:
New London, CT? You mean the town next to Groton, the world's largest submarine base? I find this whole story wonderfully metaphorical. I plan on recasting it and turning into a kids book.
I audited credit unions for several years. Some of the technology employed was behind the times...manual general ledgers for one thing.
Credit unions are limited in what they can invest in and the types of loans. They don't pay income taxes either.
I've seen some credit unions with 25% plus capital/texas ratios! Those make money hand over fist as their cost of funds is so low.
This failure won't be a systemic event. That's the thing about credit unions. They are limited in growth by geography and membership.
The key one to watch is the credit union's credit union, aka the corporate credit unions, and the central credit union, which is the corporate credit union's credit union, US Central.
I always suspected Tanta had ink on her blouse sleeves
I always get it on my nose.
and green eyeshades.
Nah, they interfere with my bifocals.
I also suspect she's on at least her 3rd HP-12C
Hell with that. The day I got Lotus 123 (dual floppy) was the day I pitched that stupid calculator into the wastebasket. Give me a set of number keys I can actually see and I am Queen of Finance.
and can still name the mainframes she's retired.
So I cried the day we finally unplugged the old IBM 360. Sue me.
She's probably lost track of the number of programmers she's reamed out for stupid cobol coding.
The numbers, yes. But I still remember the names. Doug? Vicky? Steve? Are you out there? You're still on my shit list.
I'm sure the limit on deposits was due to the difficulty in hand posting all the accounts and finding "suitable" investments for the money. Like somebody said, this was really an investment club - and also a sinecure for several elderly members of the community.
In my town, we had a tiny United Way funded agency that was getting a few thousand dollars a year and essentially providing zero services. Turned out the sole reason for the agency to exist was to provide a "job" for an elderly man who had worked at the agency for 50 years. I expect that's what this Credit Union amounted to. The "depositors" won't be too worried about taking some losses. They were probably just finding a discreet way to provide for some socially connected geriatrics in their community.
...Hell with that. The day I got Lotus 123 (dual floppy) was the day I pitched that stupid calculator into the wastebasket.
Hilarious! On my first week of work my boss (great guy) asked me for some FV interest calculations. I picked up my HP and he snatched it out of my hand and dropped it in the trash can. "Over here we use this" he said pointing at an Excel spreadsheet on the PC. I still have the same HP but it's one of the best work lessons I've ever had.
I'd almost prefer that this old-fashioned CU had an old-fashioned embezzler. The thought even George Bailey's uncle was investing in mortgages is just too much to bear.
Yup. NCUA will be paying up to $100K per depositor.
As soon as NCUA can figure out the passbook balances, that is.
You notice that the other weirdness of this story is that NCUA shut them down on a Tuesday. You know the FDIC only closes institutions on Friday nights, to give it the weekend to get control of the ops before the Monday lines at the teller window.
I have to assume that NCUA realized that in this case no weekend could ever be long enough to get up to speed with this little problem.
What this shows is that there are ways certain operators use to gather in money and stuff it away in holes in the wall, where nobody really knows what's there. Then, any losses can be papered over for years.
I told you about a little life insurance company in Nyack, Presidential Life (PLFE), that has more than a billion dollars worth of low-rated corporate bonds. The 89-year-old CEO has been buying these bonds and stuffing them away in holes in the wall for decades. Who knows what's really there? And there's other little life insurance companies like this.
It's only when the tide goes out that the holes in the wall become visible.
And don't think these CUs are limited by geography or membership limitations. Check out Pentagon Federal CU. Anyone (who pay the fee) anywhere can join.
Or postal coupons. love the Ponzi reference BTW. ISTR that when they were eliminating the state chartered S&Ls in Maryland there were several that were too small to comply with the FSLIC regs. One was only open 1 day a week (or was it 1 day a month?) for example.
My bet is they were investing in the equity tranches of CDO squareds! Either that or they were just taking the money. Somehow that seems more honest than what Wall Street has been doing.
I wonder if we will hear that a bunch of wall street execs are not comfortable with computers.
Jimmy Cayne: Hello Microsoft tech support?
MS tech support: Yes Mr. Cayne?
Jimmy: I keep hitting the Escape button but I'm still in the room with the Fed
MS tech support: You need to press CTL+ALT+DEL to open Golden Parachute
At the time of liquidation, the credit union, chartered in 1936, served 365 residents of the New London, Connecticut area, and had reported assets of $12.7 million.
Are we sure anyone actually stole anything? Couldn't they simply have invested in USTs or other high-quality assets, and became insolvent over time based on spread?
So - this was basically a retro investment bank! All the deposits in investment vehicle but no computers. Too bad the broker wasn't up-to-date on current personnel policies. Bankrupting your institution today means you get a multimillion-dollar golden parachute. Could you imagine Mozilla or Prince committing suicide for what they did to their institutions?
But at least one of us is pretty sure that credit unions exist to make loans to their members, not to the federal government. Using a credit union charter to run an "investment club" is hardly that much more respectable than just plain old theft.
There's a tiny little FCU about three blocks away designated for people living in my small town.
Was actually thinking of stopping by once the kids were in school, but now will actually do it. Sits in an old house on the bottom floor and the only advertising that they do is on the sign on the front porch.
Probably run a high-powered hedge fund that can crash the corn commodities market if they get into a snit. London's got nothing on us.
"Someone must have leaked the script for the pilot of "That 30s Show"."
-Nemo
LOL Now that would be interesting. I could get some interesting material from my mom. Lessee, Granpa had to get up at 4am to walk five miles down a country road to catch a bus filled with construction workers for a 2 hour ride to the dam they were building. Comes walking in the door at 9pm that night and is excited there is more to supper than the chicken eggs they've had all week.
cm writes:
RacerX: What lesson was that? Don't show off your tools?
Nope, I learned that from HR (just kidding). The lesson I learned is don't be afraid to learn something new and in the contrapositive sense I have a lot to learn.
I wonder if they didn't lend to their members because the members didn't need any money. I wouldn't be surprised if the 325 members were mostly retired wealthy people.
I hate to go all off-topic here, but I wonder if Sebastian noticed that Q4 2007 was revised down to contraction? Seems that we should give CR a big pat on the back since his blue bars were right on schedule! Kudos CR, it looks like recession start will be Q4 of 2007. Bloomberg's feed this morning had it early.
Not unfirst?
Let me be the first to wish you a Good Morning, Tanta.
We got our mortgage from a Building & Loan Assoc.
The office was what appeared to be a closed candy store. The crotchety old woman who ran the place had a single bare light bulb over her desk, and yes, all the payments went into a ledger book by hand. LOL.
ADP number yesterday was a gift, to sell into.
I have third hand knowledge that they invested in Bennigans. And they didn't want people to know, because they were in England and, well, Bennigans is/was an Irish themed restaurant.
Crotchety Old Haloscan!
Yes, CR is the Clapton of the blogosphere! He is da MAN!
Sorry for the OT Tanta
Someone must have leaked the script for the pilot of "That 30s Show".
How do you like your recession, sir? Hard boiled, or sunny side down.
I wish I took a screen shot of the headline on the GDP story that was on the NY Times website about 15 minutes ago... it was bizarrely upbeat. Now it's completely changed and mentions "tepid growth." Do the headline writers just not understand what is going on, or are they being ordered to put on a happy face and then someone finally said "Oh, enough of this BS..."
What just happened?
Now it's completely changed and mentions "tepid growth."
This is more probably the version that escaped the sensors.
I should convince my investment club to become a credit union?
Are there regulatory requirements, auditing rules say, that require computers directly or indirectly at this point. I find it hard to believe that they didn't have to report some numbers to somebody that wouldn't have make it easy to notice how odd this was.
If the answer's yes, then one presumes there is a database query waiting to be run over that data set.
Wow. Just WOW.
I think the "You Must Be Kidding" tag would have been more apropos.
Ellen:
They are told to put the best face possible on it. What has CNBC said about negative Q4 growth? Anything? Or do they say it is a great time to buy stocks(Is there anytime not to buy according to CNBC)?
..Our records indicate 10 federally insured credit unions (out of about 8,000 nationwide) currently use manual posting,
What a weird (and depressingly sad) story. I wonder how long they were in business.
I always suspected Tanta had ink on her blouse sleeves and green eyeshades. I also suspect she's on at least her 3rd HP-12C and can still name the mainframes she's retired. She's probably lost track of the number of programmers she's reamed out for stupid cobol coding.
Does this mean that the members received handwritten quarterly statements ?
Somewhere, an angel clips its wings
OK, not quite on topic:
New London, CT? You mean the town next to Groton, the world's largest submarine base? I find this whole story wonderfully metaphorical. I plan on recasting it and turning into a kids book.
The Little Submarine that Sank the Economy.
Some of the small credit unions were formed to keep members of the community out of the payday and title lenders hands.
Sometimes the desire for good exceeds the ability to do it.
Seriously, I heard some bottom calling on bubblevision. With jobless claims headed for the moon.
I audited credit unions for several years. Some of the technology employed was behind the times...manual general ledgers for one thing.
Credit unions are limited in what they can invest in and the types of loans. They don't pay income taxes either.
I've seen some credit unions with 25% plus capital/texas ratios! Those make money hand over fist as their cost of funds is so low.
This failure won't be a systemic event. That's the thing about credit unions. They are limited in growth by geography and membership.
The key one to watch is the credit union's credit union, aka the corporate credit unions, and the central credit union, which is the corporate credit union's credit union, US Central.
U.S. Central
Look, there's even a Charlie Mac!
http://www.charliemac.org/
$100 a month depo per account? Again, please explain why a CU would have such draconian limits on how much could be put in. This baffles me.
"When you "just basically sit on" money, you get warm, flattened piles of money that retain the imprint of your buttocks."
Bernanke used to teach that in his courses at Princeton.
Hank break out your check book...
GMAC has about 60 billion in liabilities tied to home mortgages and GM cars.Yay
GMAC Reports $2.5 Billion Loss on Auto, Housing Slump (Update5) - Bloomberg.com
RayOnTheFarm wondered: "Does this mean that the members received handwritten quarterly statements ?"
Probably typed. On an old Remington!
barely writes:
Seriously, I heard some bottom calling on bubblevision. With jobless claims headed for the moon.
Cramer called bottom in the market yesterday
Video - CNBC.com
Called bottom in housing in Feb/March
I always suspected Tanta had ink on her blouse sleeves
I always get it on my nose.
and green eyeshades.
Nah, they interfere with my bifocals.
I also suspect she's on at least her 3rd HP-12C
Hell with that. The day I got Lotus 123 (dual floppy) was the day I pitched that stupid calculator into the wastebasket. Give me a set of number keys I can actually see and I am Queen of Finance.
and can still name the mainframes she's retired.
So I cried the day we finally unplugged the old IBM 360. Sue me.
She's probably lost track of the number of programmers she's reamed out for stupid cobol coding.
The numbers, yes. But I still remember the names. Doug? Vicky? Steve? Are you out there? You're still on my shit list.
I'm sure the limit on deposits was due to the difficulty in hand posting all the accounts and finding "suitable" investments for the money. Like somebody said, this was really an investment club - and also a sinecure for several elderly members of the community.
In my town, we had a tiny United Way funded agency that was getting a few thousand dollars a year and essentially providing zero services. Turned out the sole reason for the agency to exist was to provide a "job" for an elderly man who had worked at the agency for 50 years. I expect that's what this Credit Union amounted to. The "depositors" won't be too worried about taking some losses. They were probably just finding a discreet way to provide for some socially connected geriatrics in their community.
Hopefully, the FCU's investment counselor, the 82-year old broker who committed suicide, stole money.
If he killed himself because of embarrassment over bad investments, it would be too sad.
...Hell with that. The day I got Lotus 123 (dual floppy) was the day I pitched that stupid calculator into the wastebasket.
Hilarious! On my first week of work my boss (great guy) asked me for some FV interest calculations. I picked up my HP and he snatched it out of my hand and dropped it in the trash can. "Over here we use this" he said pointing at an Excel spreadsheet on the PC. I still have the same HP but it's one of the best work lessons I've ever had.
Ellen, I had exactly the same thought.
I'd almost prefer that this old-fashioned CU had an old-fashioned embezzler. The thought even George Bailey's uncle was investing in mortgages is just too much to bear.
I'd almost prefer that this old-fashioned CU had an old-fashioned embezzler.
An old-fashioned embezzler with sufficient honor amonst thieves to refuse to steal more than $100 per month per member.
That would elevate this story into a classic.
Tanta,
Did they have the federal insurance?
"A former manager of the credit union, who retired last year after decades and spoke on condition of not being identified, "
I'm guessing that the credit union had so many retiring employees last year as to not narrow it down a bit from this description?
Did they have the federal insurance?
Yup. NCUA will be paying up to $100K per depositor.
As soon as NCUA can figure out the passbook balances, that is.
You notice that the other weirdness of this story is that NCUA shut them down on a Tuesday. You know the FDIC only closes institutions on Friday nights, to give it the weekend to get control of the ops before the Monday lines at the teller window.
I have to assume that NCUA realized that in this case no weekend could ever be long enough to get up to speed with this little problem.
What this shows is that there are ways certain operators use to gather in money and stuff it away in holes in the wall, where nobody really knows what's there. Then, any losses can be papered over for years.
I told you about a little life insurance company in Nyack, Presidential Life (PLFE), that has more than a billion dollars worth of low-rated corporate bonds. The 89-year-old CEO has been buying these bonds and stuffing them away in holes in the wall for decades. Who knows what's really there? And there's other little life insurance companies like this.
It's only when the tide goes out that the holes in the wall become visible.
And don't think these CUs are limited by geography or membership limitations. Check out Pentagon Federal CU. Anyone (who pay the fee) anywhere can join.
Why does the word Ponzi keep running through my head?
Or postal coupons. love the Ponzi reference BTW. ISTR that when they were eliminating the state chartered S&Ls in Maryland there were several that were too small to comply with the FSLIC regs. One was only open 1 day a week (or was it 1 day a month?) for example.
I pray that I never end up on a certain fecal roster...
My bet is they were investing in the equity tranches of CDO squareds! Either that or they were just taking the money. Somehow that seems more honest than what Wall Street has been doing.
I wonder if we will hear that a bunch of wall street execs are not comfortable with computers.
Jimmy Cayne: Hello Microsoft tech support?
MS tech support: Yes Mr. Cayne?
Jimmy: I keep hitting the Escape button but I'm still in the room with the Fed
MS tech support: You need to press CTL+ALT+DEL to open Golden Parachute
Jimmy: I don't see that butto
At the time of liquidation, the credit union, chartered in 1936, served 365 residents of the New London, Connecticut area, and had reported assets of $12.7 million.
Looks like they were around for 72 years.
And so it ends with an 82 yr. old feeling so hopeless he kills himself?
Sounds like a story about The Little Rowboat That Tried To Cross The Atlantic.
Very sad. I need a story from Jas right about now complete with Crooks, American Born and Bred Dopes, and something about the Evil of Finance.
It would be sad because he would pretty much have been the last guy left in the financial world still capable of embarassment.
Doug, Vicky and Steve? Welcome to IT in central Iowa, circa 1988
uh, let me rephrase that to "one sad thing is"... I didn't mean to sound like it was the only, or even a primary, reason that his suicide was sad....
Are we sure anyone actually stole anything? Couldn't they simply have invested in USTs or other high-quality assets, and became insolvent over time based on spread?
So - this was basically a retro investment bank! All the deposits in investment vehicle but no computers. Too bad the broker wasn't up-to-date on current personnel policies. Bankrupting your institution today means you get a multimillion-dollar golden parachute. Could you imagine Mozilla or Prince committing suicide for what they did to their institutions?
New London, ha thats where I'm from!
Always knew there was reason to get out...
.........
Are we sure anyone actually stole anything?
Of course we're not.
But at least one of us is pretty sure that credit unions exist to make loans to their members, not to the federal government. Using a credit union charter to run an "investment club" is hardly that much more respectable than just plain old theft.
I hope my credit union never invests in llama's.
What is sad is that the suicider won't be held up as a role model for other investment bankers.
Last banker with a conscience. Indeed.
Remember, you can't have moral hazard without morals.
There's a tiny little FCU about three blocks away designated for people living in my small town.
Was actually thinking of stopping by once the kids were in school, but now will actually do it. Sits in an old house on the bottom floor and the only advertising that they do is on the sign on the front porch.
Probably run a high-powered hedge fund that can crash the corn commodities market if they get into a snit. London's got nothing on us.
London's got nothing on us.
Dad, come on, it was the wailing capital of the world once....
............
haaa opps.... dyslexia (or some neurological misfire) strikes again...
Whaling that is!
....................
You were right the first time, nades. You were right the first time, nades.
Thought I might as well double-post and get the jump on Haloscan.
"Someone must have leaked the script for the pilot of "That 30s Show"."
-Nemo
LOL Now that would be interesting. I could get some interesting material from my mom. Lessee, Granpa had to get up at 4am to walk five miles down a country road to catch a bus filled with construction workers for a 2 hour ride to the dam they were building. Comes walking in the door at 9pm that night and is excited there is more to supper than the chicken eggs they've had all week.
RacerX: What lesson was that? Don't show off your tools?
Perhaps the credit union's local real estate investments went sour when the city used eminent domain
to seize the properties...
cm writes:
RacerX: What lesson was that? Don't show off your tools?
Nope, I learned that from HR (just kidding). The lesson I learned is don't be afraid to learn something new and in the contrapositive sense I have a lot to learn.
N.B. New London is also home to the U.S. Coast Guard Academy.
I wonder if they didn't lend to their members because the members didn't need any money. I wouldn't be surprised if the 325 members were mostly retired wealthy people.
I thought my CU was quaint being in a funky old house and serving kettle corn on Fridays!
That's kill #37 in Greenspan's Body Count.
This from the town responsible for setting the precedent that the government can take our property pretty much any time it feels the urge ('Kelo').
What is really a tragedy is, where was NCUA?
How could this type of behavior have gone unnoticed?