Posts Tagged ‘U.S. banks’

CHRIS WHALEN DESCRIBES WHY 2011 COULD MAKE 2008 LOOK LIKE A CAKEWALK

CHRIS WHALEN DESCRIBES WHY 2011 COULD MAKE 2008 LOOK LIKE A CAKEWALK

Courtesy of The Pragmatic Capitalist 

Christopher Whalen makes a remarkably convincing case for why we’ve simply kicked the can down the road and why the banks could be in for a repeat of their 2008 nightmares in 2011.  If Mr. Whalen is right the banking sector is in for a whole new round of government intervention, takeovers, likely nationalizations and general disaster:

The U.S. banking industry is entering a new period of crisis where operating costs are rising dramatically due to foreclosures and defaults. We are less than frac14; of& the way through the foreclosure process. Laurie Goodman of Amherst Securities predicts that 1& in 5 mortgages could go into foreclosure without radical action.

Rising operating costs in banks will be more significant than in past recessions and could force the U.S. government to restructure some large lenders as expenses overwhelm revenue. BAC, JPM, GMAC foreclosure moratoriums only the start of the crisis that threatens the financial foundations of the entire U.S. political economy.

The largest U.S. banks remain insolvent and must continue to shrink. Failure by the Obama Administration to restructure the largest banks during 2007?2009 period only  means that this process is going to occur over next three to five years –whether we like it or not.  The issue is recognizing existing losses ?? not if a loss occurred.

Impending operational collapse of some of the largest U.S. banks will serve as the catalyst for re?creation of RFC?type liquidation vehicle(s) to handle the operational task of finally deflating the subprime bubble.   End of the liquidation cycle of the deflating bubble will arrive in another four to five years.

Fast forward to the 1:07 minute mark where Mr. Whalen begins.

 


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How To Run Drug Money: Be A (Large) Bank

How To Run Drug Money: Be A (Large) Bank

Courtesy of Karl Denninger of The Market Ticker 

Oh, so the banks don’t just bilk investors and rip off municipalities, they also help Mexican Gangs run drugs?

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers — including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

The admission came in an agreement that Charlotte, North Carolina-based Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.

That’s nice.  Guns and ammunition cost money – lots of it.  Getting that money requires some means of transporting it and "laundering" it.  For that, we turn to the largest financial institutions in the world, who, it turns out, have never been prosecuted for these felonious acts.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” says Jeffrey Sloman, the federal prosecutor who handled the case.

Blatant disregard?  Sounds like something you’d say at a sentencing hearing, right?  Well, no….

No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again.

‘No Capacity to Regulate’

Large banks are protected from indictments by a variant of the too-big-to-fail theory.

Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets, says Jack Blum, a U.S. Senate investigator for 14 years and a consultant to international banks and brokerage firms on money laundering.

The theory is like a get-out-of-jail-free card for big banks, Blum says.

“There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line,


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Derivatives “Reform” or “Let’s Just Pretend It Isn’t a Problem but Act Like We Fixed It” ?

Derivatives "Reform" or "Let’s Just Pretend It Isn’t a Problem but Act Like We Fixed It"?

Courtesy of Jr. Deputy Accountant 

[click on images/tables to enlarge]

 Pic credit: MTTS

A-ha! I f**king love "reform" in this country. God bless America!

Bloomberg:

Three of the five U.S. banks that dominate swaps trading already perform most transactions outside their depository institutions and would face minimal disruption from a congressional proposal to reorder the derivatives business, financial statements and banking records show.

JPMorgan Chase & Co. and Citigroup Inc. would be hit hardest by the proposal, crafted by Arkansas Senator Blanche Lincoln, to wall off swaps desks from commercial banks. JPMorgan had 98 percent of its $142 billion in current value derivatives holdings inside its bank in the first quarter of this year while Citigroup had 89 percent of $112 billion, the records show.

Morgan Stanley and Goldman Sachs Group Inc., each of which entered the commercial banking business in 2008 in the midst of the financial crisis, would be less affected. Morgan Stanley kept just over 1 percent of its $86 billion in derivatives holdings in its bank in the first quarter, and Goldman Sachs Group’s held 32 percent of its $104 billion. Bank of America Corp., which absorbed broker-dealer Merrill Lynch in 2009, had 33 percent of its $115 billion in its bank.

Now might be a good time to introduce a handy chart that shows the latest OCC data on derivatives exposure, or, more specifically, shows the concentration of said derivatives exposure among FIVE banks. You know, that would be the five banks that Blanche Lincoln might have wanted to target with this "reform" plan of hers. Just sayin, cue chart:

And let’s see, just who are those five banks?

JP Morgan, Bank of America, Goldman Sachs, Citi, and Wells Fargo eh? Well four out of five ain’t bad except that fifth is a b#*ch, how on Earth does Goldman get to weasel out of this?

From the OCC report:

The report shows that the notional amount of derivatives held by insured U.S. commercial banks increased by $8.5 trillion (or 4.2 percent) in the fourth quarter to $212.8 trillion. Interest rate contracts increased $7 trillion to $179.6 trillion, while credit derivatives increased 8 percent to $14 trillion.

The report also


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Wall Street Set to Pay a Record $140 Billion In Bonuses Topping 2007

Wall Street Set to Pay a Record $140 Billion In Bonuses Topping 2007

Courtesy of Jesse’s Café Américain

While the world suffers, Wall Street pays itself record bonuses, larger even than the peak year of 2007, by taxing the productive economy to maintain an extravagant lifestyle. These bonuses are being paid with your money, and your children’s money, if you hold US dollars.

And while this happens, the US credit card banks are raising interest rates to 20+% even on customers with excellent payment records and jobs which is certainly usury, and with an arrogant impunity. The insider trading scandals and tales of government graft yet to be told are so blatant and shocking that only a captive mainstream press keeps them from being investigated.

The rest of the world looks on in shock and amazement. What has gone wrong with America? What are they thinking? America has not only lost the high ground, it is sliding into a ditch.

While Americans are pacified by bread and circuses, the rest of the world looks at a painful reality show in the States, a country in a death spiral of corrupt leadership and public apathy. If it was Zimbabwe or Iceland there would still be sympathy for the people, but far less concern.

A deflationist friend was railing about the US slide into bankruptcy, and I could not help but ask, "What happens to the paper of a bankrupt company, or country?"

Where indeed will the dollar gain its long anticipated strength, its renaissance of value?

Or yes, from "less dollars" through debt destruction. Mutant monetarism gone mad, an argument worthy of Herr Goebbels. The dollar will rise in value by immersing itself in a pool of corruption, and by destroying its shareholders, those who hold their savings in it, while oligarchs loot the financial system. Unless the US can turn its trade balance positive overnight, while raising interest rates, and maintaining a growing domestic economy based on consumption, it is not going to happen. The US is running out of degrees of freedom.

Wall Street holds the US public and government hostage by threatening financial armageddon if they do not get what they wish. We would anticipate a similar threat to the global economy based on dollar debt at some point, asking for a global monetary regime controlled out of New York and


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The Largest U.S. Banks Have Repeatedly Gone Bankrupt Due to Wild Speculation.

Excellent post by George.

The Largest U.S. Banks Have Repeatedly Gone Bankrupt Due to Wild Speculation. The Fed Blessed the Speculation then Helped Cover Up the Bankruptcies

banks, gamblingCourtesy of George of Washington’s Blog

As I have previously pointed out, the New York Times wrote in February:

In the 1980s, during the height of the Latin American debt crisis, the total risk to the nine money-center banks in New York was estimated at more than three times the capital of those banks. The regulators, analysts say, did not force the banks to value those loans at the fire-sale prices of the moment, helping to avert a disaster in the banking system.

In other words, the nine biggest banks were all insolvent in the 1980s.

Richard C. Koo – former economist at the Federal Reserve Bank of New York and doctoral fellow with the Fed’s Board of Governors, and now chief economist for Nomura – confirmed last year in a speech to the Center for Strategic & International Studies that most of the giant money center banks were insolvent in the 1980s.

Specifically, Koo said:

  • After the Latin American crisis hit in 1982, the New York Fed concluded that 7 out of 8 money center banks were actually "underwater"
  • All the foreign banks (especially the Japanese banks) had to keep their lending facilities open to American banks so the American banking system didn’t collapse overtly and out in the open
  • The Fed knew that virtually all of the American banks were "bankrupt", but could not publicly discuss how bad the situation was. If went out and said the "American banks are bankrupt", the next day they will go overtly go bankrupt. So the Fed had to come up with a lot of stories like "its good debt on their books"
  • Then-chairman Volcker instructed the banks to keep lending to the Mexican dictator so that the Mexican economy didn’t totally collapse, because – if Mexico collapsed – it would become obvious that all of the U.S. banks were underwater, and they would immediately collapse
  • It took 13 years to manage the crisis (at another point in the talk, Koo says 15 years).
  • The way that Volcker approached the problem was that he allowed U.S. banks to keep their lending rates relatively high, while the central bank brought short-term


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ValueWalk

Rocktoberfest Sponsorships And NYC Finance Luncheon At Zuma New York

By VW Staff. Originally published at ValueWalk.

ValueWalk is a proud partner of the event and organization which raises money for a great cause. See their newest press release below.

Rocktoberfest Sponsorships and NYC Finance Luncheon at Zuma New York All to Support ALTSO’s Work With Children In Emerging Market Countries

NEW YORK – August 17, 2017 – Hedge Fund Rocktoberfest, the annual fundraiser for children’s charity A Leg To Stand On (ALTSO), will unite over 2,000 leaders from the alternative investments and finance industry for rock & roll and acoustic music, featuring over a dozen bands whose talented performers are industry leaders. New York anticipates a total of more than 15 acoustic and main stage acts with nearly 10 performances to headline in Chicago.

...



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Phil's Favorites

Fearful Investors Losing Faith in Trump?

Courtesy of Mish.

Mainstream media likes to assign a reason for every squiggle in the stock market, bond market, or commodities.

Today provides an amusing example.

Reuters says Washington’s Mounting Woes Push S&P to Biggest Loss in Three Months.

U.S. stocks sold off on Thursday, with the S&P 500 recording its biggest daily percentage drop in three months as escalating worries about the Trump administration’s ability to push through its economic agenda rattled investors.

Investors appeared to be losing faith in the Trump administration’s ability to move forward with tax cuts and the rest of its domestic economic agenda, some strategists said. Th...



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Zero Hedge

Millennials Are Using Financing To Pay For $450 Blenders

Courtesy of ZeroHedge. View original post here.

Low wages, mounting student debt and rising rents in the trendy urban centers where millennials prefer to live leave young people with little to spend on luxuries like an iPhone, or tickets to Fyre Festival pt. II. So, since millennials can’t seem to buy anything outright, payment companies are partnering with businesses to offer financing options for goods that, in the past, would’ve gone straight on the credit card, according to MarketWatch.

...

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Chart School

Volatility on the Rise

Courtesy of Declan.

Today's losses look big on current charts but in a historic context, they weren't too severe. However, big red bars are not to be ignored and 'market leading' Small Caps have felt the full brunt of the selling from July which is bad news for the broader market.  Today's losses in the Russell 2000 undercut the 200-day MA leaving 1,345 as next support (of which I would not be too confident of it holding).


If the Russell 2000 gives up 1,350s then a drop to 1,150s could be on the cards. Things could get ugly if this scenario pl...

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Insider Scoop

10 Stocks To Watch For August 17, 2017

Courtesy of Benzinga.

Related SMRT Earnings Scheduled For August 16, 2017 The Factors That Could Be Moving Short- And Long-Term Buyers ...

http://www.insidercow.com/ more from Insider

Digital Currencies

Ukrainian Lawmakers Disclose $45 Million In Bitcoin Holdings

Courtesy of ZeroHedge. View original post here.

As Ukraine's crackdown on corruption continues, three lawmakers from Ukraine’s ruling party revealed this week that they own a combined $45 million in bitcoin, according to a report by RIA Novosti, a Russian foreign news service.

Their holdings came to light during mandatory financial disclosures by members of the Ukrainian parliament, part of an IMF-approved strategy to tamp down corruption in Ukraine. The country's democratic institutions, which were never very robust to begin with, have been further destabilized by...



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OpTrader

Swing trading portfolio - week of August 14th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Biotech

Editing human embryos with CRISPR is moving ahead - now's the time to work out the ethics

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Editing human embryos with CRISPR is moving ahead – now's the time to work out the ethics

Courtesy of Jessica BergCase Western Reserve University

There’s still a way to go from editing single-cell embryos to a full-term ‘designer baby.’ ZEISS Microscopy, CC BY-SA

The announcement by researchers in Portland, Oregon that they’ve successfully modified the genetic m...



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Members' Corner

Why we need to act on climate change now

 

Why we need to act on climate change now

Interview with Jan Dash PhD, by Ilene Carrie, Editor at Phil’s Stock World

Jan Dash PhD is a physicist, an expert at quantitative finance and risk management, and a consultant at Bloomberg LP. In his thought-provoking book, Quantitative Finance and Risk Management, A Physicist's Approach, Jan devotes a chapter to climate change and its long-term systemic risk. In this article, Ilene interviews Jan regarding his thoughts on climate change and the way it can affect our futu...



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Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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