It’s only fitting in our bank monopoly system that Park Avenue Bank fails. Unfortunately we do not have a go to jail card for our banksters. They just pass go and keep collecting $200 billion dollars.

Movin' on up to da east side!

Does it really count as a bank? More like a domestic safe in those parts, no?

C

Valley National Bank(not the AZ one that is now part of Chase) is really stepping up to the plate, 2 in 2 days. I guess this is the start of the wave of consolidation.

Got my BFF vote in with about 90 seconds to spare.

...you playing Moneyopoly, lawyerliz?

Trying desperately not to.

I nearly had a heart attack.

Both banks said that there was a lot of fraud.

There's probably 1500 banks that could be closed based upon a 10% loss threshold.

Ya. Makes me wonder if someone affiliated with the bank crossed someone up.

lawyerliz wrote:

First time anything like this has ever happened.

...to you. Three out of four people in my department have had some kind of identity theft of bank fraud incident in the last 3 years. Banks don't like to talk about it, but their systems are vulnerable from many vectors.

A postmortem on Lehman Brothers: Oh, brother | The Economist

The report’s juiciest finding relates to Lehman’s use of an accounting device called Repo 105, which allowed the bank to bring down its quarter-end leverage temporarily. Repurchase (“repo”) agreements, whereby borrowers swap collateral for cash and agree to buy the collateral back later at a small premium, are a very common form of short-term financing. They normally have no effect on a firm’s overall leverage: the borrowed cash and the obligation to repurchase the collateral balance each other out.

But Repo 105 took advantage of an accounting rule called SFAS 140, which enabled Lehman to reclassify such borrowing as a sale. Lehman would give collateral to its counterparty and receive cash in return. Because the deal was being recorded as a sale, the collateral disappeared from Lehman’s balance-sheet and the bank used the cash it generated to pay down debt. To outsiders, it looked as though Lehman had reduced its leverage. In fact, the obligation to buy back the collateral remained. Once the quarter-end had come and gone, Lehman borrowed money to repay the cash and buy back the collateral, and its leverage spiked back up again.

Mr Valukas marshals plenty of evidence to back up his claim that “Lehman painted a misleading picture of its financial condition”. The effect of Repo 105 was material: the firm temporarily removed around $50 billion-worth of assets at the end of the first and second quarters of 2008, a time when market jitters about its leverage were pervasive (see table below). Mr Valukas can see no legitimate business reason to undertake the transaction, which was more expensive than a normal repo financing and had to be done through its London-based arm because Lehman was unable to get an American lawyer to agree that Repo 105 involved a true sale of assets.

Sweet, I just got my Zim$ 10,000,000,000,000,000 note.

Now to call the bank, exchange it for 'loose change' and corner the metal market!

lawyerliz wrote:

Trying desperately not to.
I nearly had a heart attack.
Both banks said that there was a lot of fraud.

Make them an offer they can't refuse. Lawyers ain't cheap. Forget the fraud, clear the title and let them walk away.

Nope

Comrade Alexei Mikhailovich wrote:

I guess this is the start of the wave of consolidation.

LOL. Talk to me about "consolidation" when Sheila actually starts closing banks faster than new ones appear on the Problem Bank List.

At this point, it's a leaky faucet of consolidation.

How many new banks have been created since the start of the year?

...it's a debt & pony show

I am told that in some cases involving state-chartered institutions, the state regulators take a more lenient approach and resist federal pressure to shut down a troubled bank.

The guy who originally called was from the fraud division of Citi.

He said they lost money.

Why did they clear the check so soon?

It's still raining here.

CP programs are one portion of the ABS market, but by no means all of it.

daddyo wrote:

ABS has been a lot of new issue.
In CMBS, there has been new issue from freddie with an agency wrap, and the FDIC deal of Corus assets that just went to market. There has been no new private label CMBS since 2008 that wasn't a repack of old junk.

So how does this quarter compare to the second half of 2009 in terms of volume?

Use positive pay Liz!

ResistanceIsFeudal wrote:

I have three of the ZIM 100 trillion notes, bought a few months ago..

I have some 1-billion-mark postage stamps from Weimar Germany in my collection...I also have some amusing covers (mailed envelopes) plastered with stamps, at a time when inflation required using an entire sheetof stamps to mail a letter.I bet you could find newer Zimbabwe stamps like that....

lawyerliz wrote:

Hey wait a minnit!

A New York minute?

I'm confident that the people that jumped back into the ABS & MBS/CMBS markets will learn their lesson on the next round.

Cinco-X wrote:
A New York minute?
Right... time runs differently in the Big Appal

LL, it was probably rampant in that bank. No one that I know of checks signatures anymore, all automation.

Somebody just tried to steal $14,750 from my trust account.

Yeah, the Swiss seem be having a problem as well ...

HSBC admits huge Swiss data theft

lawyerliz wrote:

The guy who originally called was from the fraud division of Citi.

He said they lost money.

Why did they clear the check so soon?

Interesting. I'm getting fairly regular calls from people who are selling stuff either online or in newspaper classifieds. They get a phone call or an email from a "purchaser" who sends them a "cashier's check" for more than the asking price, along with some blah blah blah about why this is necessary. The seller is then requested to deposit the check and wire the extra money back to the buyer.

Nobody here is silly enough to do that, are they? (Those who do are often surprised to discover that their bank is not sympathetic when the check turns out to be phony...)

If anyone wants the real gory details of what was in the toxic pile the NPR folks bought, here is the prosupp.

http://www.sec.gov/Archives/edgar/data/826219/000112528205004565/b408557_424b5.txt

Someone asked about doc:

Reduced Documentation............ 67.09%
Full Documentation............... 15.03
SISA............................. 13.54
Alternative Documentation........ 4.19
No Income/No Asset............... 0.14

In connection with the Standard Underwriting Guidelines, Countrywide
originates or acquires mortgage loans under the Full Documentation Program, the
Alternative Documentation Program, the Reduced Documentation Program, the CLUES
Plus Documentation Program or the Streamlined Documentation Program.

The Alternative Documentation Program permits a borrower to provide W-2

forms instead of tax returns covering the most recent two years, permits bank
statements in lieu of verification of deposits and permits alternative methods
of employment verification.

Under the Reduced Documentation Program, some underwriting

documentation concerning income, employment and asset verification is waived.
Countrywide obtains from a prospective borrower either a verification of deposit
or bank statements for the two-month period immediately before the date of the
mortgage loan application or verbal verification of employment. Since
information relating to a prospective borrower's income and employment is not
verified, the borrower's debt-to-income ratios are calculated based on the
information provided by the borrower in the mortgage loan application. The
maximum Loan-to-Value Ratio, including secondary financing, ranges up to 75%.

The CLUES Plus Documentation Program permits the verification of

employment by alternative means, if necessary, including verbal verification of
employment or reviewing paycheck stubs covering the pay period immediately prior
to the date of the mortgage loan application. To verify the borrower's assets
and the sufficiency of the borrower's funds for closing, Countrywide obtains
deposit or bank account statements from each prospective borrower for the month
immediately prior to the date of the mortgage loan application. Under the CLUES
Plus Documentation Program, the maximum Loan-to-Value Ratio is 75% and property
values may be based on appraisals comprising only interior and exterior
inspections. Cash-out refinances and investor properties are not permitted under
the CLUES Plus Documentation Program.

The Streamlined Documentation Program is available for borrowers who

are refinancing an existing mortgage loan that was originated or acquired by
Countrywide provided that, among other things, the mortgage loan has not been
more than 30 days delinquent in payment during the previous twelve-month period.
Under the Streamlined Documentation Program, appraisals are obtained only if the
loan amount of the loan being refinanced had a Loan-to-Value Ratio at the time
of origination in excess of 80% or if the loan amount of the new loan being
originated is greater than $650,000. In addition, under the Streamlined
Documentation Program, a credit report is obtained but only a limited credit
review is conducted, no income or asset verification is required, and telephonic
verification of employment is permitted. The maximum Loan-to-Value Ratio under
the Streamlined Documentation Program ranges up to 95%.

Nice sleuthing, ghost.

Hey would you like debt chaser with your drink of debt?

To fill more of those orders, Treasurer Bill Lockyer raised the size of the offering to $2.5 billion.

LATimes.

It's only OPM. Eh. What could happen?

Are they going to do a podcast about their new toxic asset? I hope more people pick up on that trend.

John Stark wrote:

Nobody here is silly enough to do that, are they?

Not me. I provided my account information to an orphan princess so that she could use it to unlock her deceased father's fortune.

Apparently there are lots of people in this situation, as I get constant requests for help.

EDIT:

The poor man, doesn't he have enough troubles back in Blighty to deal with?

Never heard of either.

We're almost all JPM now.

NYC is about to close a lot of firehouses, but JPM branches keep opening up. Not a good equation.

ResistanceIsFeudal wrote:

A New York minute?
Right... time runs differently in the Big Appall

Another expression: "Country Mile" Ya'; they measure miles different in the country....

ghostfaceinvestah wrote:

The
maximum Loan-to-Value Ratio, including secondary financing, ranges up to 75%.

Just noticed something - above is the supposed max of the Reduced Doc program - 75LTV.

Reduced Doc was 67% of all loans.

But yet 48% loans were at 80LTV.

Sheesh, they couldn't even keep their story straight in the prosupp.

You know darn well that whoever bought these didn't even look at the documents, they just bought a rating and a yield.

1 currency now -yogi wrote:

NYC is about to close a lot of firehouses, but JPM branches keep opening up. Not a good equation.

One starts F.I.R.E.S. and the other puts them out. Eh. What could happen?

One starts F.I.R.E.S. and the other puts them out. Eh. What could happen?

Fahrenheit 401k

Was it ever resolved? Did yesterday's Friday count as part of today's Friday?

Turns out I'm the new Nigerian Finance Minister! According to an email. Maybe I misread it. Something about a locker in Rotterdam too.

C

Finally saw "Capitalism: A Love Story." That movie is . . . accurate and well-done. I can't say it was actually good because it was just too depressing. But he got it right. The next drop down is going to be breathtaking.

Please God let this be true.

ResCap on the Block?

GMAC Financial Services has hired Goldman Sachs to start the process of selling the company's money-losing mortgage unit Residential Capital Corp., according to a new published report.

I'm shy. How bout you meet cousin Katherine for me...send my regards.

OT--belongs in a pigged thread, but I'm still trying to understand this numbers game.

This is dated January 9, 2010:

"AUSTIN – Four months into its new two-year budget, Texas already is nearly $1 billion behind its expected pace of sales tax collections, according to new figures released Friday.

Comptroller Susan Combs said there's no need for panic, as tax collections should start growing again in the first or second quarter of the year.

But the decline is dramatic. A year ago, Combs forecast essentially flat sales taxes receipts in the budget year that started Sept. 1; instead, they've decreased by 12.9 percent in the first four months."

Texas sales tax collections are $1 billion behind |
News for Dallas, Texas | Dallas Morning News
| Texas Legislature

And Texas is doing better than most states. So, what's with that alleged increase in sales? And how come no one is seriously challenging those numbers? CR?

Chit happens...

That article is hilarious.

Officials said it was too early to tell if businesses that receive the IOUs were feeling a financial squeeze.

Edit: I'll second that "my bad", but it's still funny...

ghostfaceinvestah wrote:

Please God let this be true.
ResCap on the Block?
GMAC Financial Services has hired Goldman Sachs to start the process of selling the company's money-losing mortgage unit Residential Capital Corp., according to a new published report.

I haven't checked the seat cushions recently so I'm in. Anybody else? I'm thinking we need postage to submit an offer that includes them paying us. A lot.

And in other news...Texas flea markets thriving, yard sales are up, and backyard bartering during the witching hour is rumored to be increasing.

Forgot to mention that the new in thing for middle class moms is shopping at Goodwill.

Ah. Ok. Park Avenue in Brooklyn. Opened in 2005. That would explain the obscurity.

steelhead wrote:

That is going to have significant impact as TX has no income tax.

Yep, sales tax and property taxes are primary revenue sources...

not sure if this has been posted yet.

Robert Reich (The Sham Recovery)

energyecon wrote:

steelhead wrote:
That is going to have significant impact as TX has no income tax.
Yep, sales tax and property taxes are primary revenue sources

Good thing they don't rely on natgas revenues.

In its biennial revenue projections, the State Comptroller’s office reported that Texas brought in 2.7 percent less revenue during fiscal year 2009 than in 2008, due in part to reduced drilling activity. The office also projects a 58 percent drop in natural gas tax revenue in fiscal year 2010, after 2009’s actual 48 percent drop

72% loss severities on subprime, ouch.

Expiring Govt. Programs to Result in Higher RMBS Losses, Fitch Says

In the couple of years prior to the recent improvement, national home prices dropped approximately 30% while loss severities on loans which incurred losses doubled to record highs of 43% for private-label Prime loans, 58% for Alt-A loans and 72% for Subprime loans.

ghostfaceinvestah wrote:

Mish's Global Economic Trend Analysis: Retail Sales Rise: Where? Let's Take a Look; Expect Nothing Less Than Panic

ghostfaceinvestah, thanks.

sm_landlord wrote:

It seems a lot of little fraud farms were opened about that time.

Was Cassano (AIGFP) head of the FDIC that year?

Park Avenue Bank. Oh my!! And Holy Shit, Batman. WTF?
As they used to say at the dog track out in Colorado, "Heeeerrreee Cooommmeee's Rusty!!!!"

Next bank please...

75% loan to value?

And they were lying anyway?

Rob Dawg wrote:

Good thing they don't rely on natgas revenues.

I read an analysis the other evening, which claimed that most of the US shale gas operations are losing money at current prices.

energyecon wrote:

Anyone read yves book yet, ECONned?

Not yet, will look into it.

Just read The Greatest Trade Ever, about Paulson and others who shorted subprime going during the bubble. I think a lot of folks here would like it, because it goes into their emotions when they first started shorting subprime, but the value of the bonds went up, and they were like, WTF, sooner or later this bubble has to burst.

A good read on how tough it is to be a contrarian.

Vonbek777 wrote:

Next bank please...

while you are waiting

YouTube - Cooking - Squirrel (Skillet)

pythia wrote:

I've officially got 10 more years on a 15 year mortgage, but if I continue paying down principle at my current rate I'll have it paid off in 4 to 5 years.

A 15 year mortgage? What are you, responsible or something?

There is no future in America for the likes of you.

Robert Reich using "Sham Recovery"! Yves using eCON title!

Love it. Now where did they get such brilliant titles?

sm_landlord wrote:

Rob Dawg wrote:
Good thing they don't rely on natgas revenues.
I read an analysis the other evening, which claimed that most of the US shale gas operations are losing money at current prices.

Yup. The oil/natgas ratio is a true conundrum. I have absolutely no idea which way it breaks. Logic says oil crashes and natgas rises slightly but logic was the first causality when Calvinomics took over two years ago.

daddyo wrote:

CP programs are one portion of the ABS market, but by no means all of it.

didn't mean to imply that, meant to suggest that the CP-ABS issuance went somewhere else
which would make sense with the lower long term interest rates, and increased liquidity premia compared to the last go around

ghostfaceinvestah wrote:

There is no future in America for the likes of you

Who died and left them money?

Arithmetic was ruled out of Calvinball in Fall 2008. Since then, numbers just are. And all changes are subject to further modification.

POTD

Two more: FL & LA
Old Southern Bank, Orlando
Statewide Bank, Covington

fudge_hend wrote:

Two more: FL & LA

No banks left standing in Atlanta?

Erin go broke?

sm_landlord wrote:

I read an analysis the other evening, which claimed that most of the US shale gas operations are losing money at current prices.

That is the understanding I have from inside the industry, the few shale players who are making money have either been carried by their hedges, have very liquids rich gas production or have the absolute lowest cost structure. And it will be interesting to see if these wells bleed gas for twenty years, or what kind of workover programs (aka additional investment) will be required to keep producing...

liz, that one is in your neighborhood ?

More minnows, under $130m on the DIF for both.

My BFF bet is looking good.

C

Irish I hadn't bought all those condos in Dublin.

Juvenal Delinquent wrote:

Irish I hadn't bought all those condos in Dublin.

Ye mistake was Dublin down.

15% and 30% DIF hits. All over the map.