Posts Tagged ‘Congressional Oversight Panel’

Report: Bailout Money Ended Up in Foreign Hands

Report: Bailout Money Ended Up in Foreign Hands

Courtesy of Jr. Deputy Accountant 

The Congressional Oversight Panel has found (!) some disturbing new information surrounding 2008′s most not excellent bailout programs, among them, details on where exactly AIG’s cash infusions went. Here’s a hint: it wasn’t back into the system.

WaPo:

Members of the Congressional Oversight Panel, in a report due out Thursday, note that America’s broad financial rescues had more impact internationally than the narrower bailout programs of other countries had on U.S. firms.

They cite as a case study the bailout of insurance giant American International Group. While the Treasury committed up to $70 billion to AIG through its Troubled Assets Relief Program, the report states, much of that money ended up in the coffers of foreign trading partners in France, Germany and other countries. The cash that the United States poured into AIG alone equaled twice what France spent on its total capital injection program, and half what Germany spent.

"The point we make forcefully in this report is that there were no data about where this money was going, no information about where this money was going," said panel chair Elizabeth Warren, a Harvard law professor. "Without that information, no one could make a deliberate policy choice" about whether to ask foreign governments to contribute to the financial rescues.

Isn’t that why Warren has a job? To figure that out?

And yet for all her pristine carrying on over who got what, it appears as though someone forgot to turn off the spigot. But now instead of the banks and the auto companies, the bailouts are being pumped out to homedebtors, college students, whoever the hell is stupid enough to have a stake in Fannie and Freddie and of course broke ass state and local governments who can’t pay their bills.

The outrage over the bailouts of late 2008 and most of 2009 is obvious but where is the oversight committee to say enough is e-f*&king-nough already and cut it off?!

Reports. Meh. 


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THE CONTINUING RISK OF TROUBLED ASSETS

THE CONTINUING RISK OF TROUBLED ASSETS

troubled assetsCourtesy of The Pragmatic Capitalist

The Congressional Oversight Panel is out with a very thorough report on the continuing risks of troubled assets.  I’ve included the full report with some highlights below.  In a nutshell, we’re a long way from being out of the woods with regards to toxic assets.  This is a must read for anyone still trying to wrap their head around these issues:

If the economy worsens, especially if unemployment remains elevated or if the
commercial real estate market collapses, then defaults will rise and the troubled assets will continue to deteriorate in value. Banks will incur further losses on their troubled assets. The financial system will remain vulnerable to the crisis conditions that TARP was meant to fix.

The problem of troubled assets is especially serious for the balance sheets of small
banks. Small banks‘ troubled assets are generally whole loans, but Treasury‘s main
program for removing troubled assets from banks‘ balance sheets, the PPIP will at present address only troubled mortgage securities and not whole loans. The problem is compounded by the fact that banks smaller than those subjected to stress tests also hold
greater concentrations of commercial real estate loans, which pose a potential threat of high defaults. Moreover, small banks have more difficulty accessing the capital markets than larger banks. Despite these difficulties, the adequacy of small banks‘ capital buffers has not been evaluated under the stress tests.

This crisis was years in the making, and it won‘t be resolved overnight. But we are now ten months into TARP, and troubled assets remain a substantial danger to the financial system. Treasury has taken aggressive action to stabilize the banks, and the steps it has taken to address the problem of troubled assets, including capital infusions, stress-testing, continued monitoring of financial institutions‘ capital, and PPIP, have provided substantial protections against a repeat of 2008. These steps have also allowed the banks to take significant losses while building reserves. Nonetheless, financial stability remains at risk if the underlying problem of troubled assets remains unresolved.

cop-081109-report

 


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Friday Commercial Real Estate — the Economy’s Anvil

Commercial real estate may soon bulldoze the green shoots.

A coming wave of defaults on loans to developers of condominiums, office buildings and malls could do significant damage to the already deflating economy. That was the overwhelming concern expressed at a public hearing of the Congressional Oversight Panel (COP) on Thursday that focused on corporate and commercial real estate lending.

The COP was set up last fall as part of legislation that gave the Treasury Department permission to spend $700 billion to rescue the nation’s ailing financial system. The panel, which is headed by Harvard Law professor Elizabeth Warren, has no legislative or official regulatory powers. It is supposed to monitor the Treasury’s spending and report back to Congress as to whether it is being effective in boosting lending and shoring up the financial sector.

Thursday’s hearing was one of a number of public forums the COP is hosting on different segments of the lending market. Warren is often criticized for being too critical of banks and their lending practices. But at the hearing on commercial real estate, Warren focused on how big a problem future loan defaults will be and what should be done about them.

She got an earful. Richard Parkus, an analyst at Deutsche Bank, said he thought two-thirds of all commercial real estate loans due in the next few years — hundreds of billions of dollars’ worth — could go bust. Jeffrey DeBoer, president of trade group the Real Estate Roundtable, fretted that problems in the lending business could cost the nation thousands more construction and real estate jobs. Next up, Congressman Jerrold Nadler of New York expressed worry that the country was headed for a lost decade of economic stagnation.

There were not many solutions offered. Nadler said he thought the government should create new banks, which, unencumbered by souring loans, would boost lending. Nadler said he thought private investors would be interested in helping fund the new banks. A number of the panelists thought the government’s TALF and PPIP programs meant to boost lending were helpful but not the answer. Parkus said he thought extending the terms of commercial loans set to default would only delay the problem and make it worse. As more and more bad loans pile up, he predicted, it will…
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Phil's Favorites

What China wants: 3 things motivating China's position in trade negotiations with the US

 

What China wants: 3 things motivating China's position in trade negotiations with the US

Courtesy of Penelope B. Prime, Georgia State University

Relations between the U.S. and China have deteriorated sharply in recent days after trade negotiations broke down, leading some to suggest we are on the cusp of a new “cold war.”

President Donald Trump blames the resumption of hostilities on China. Specifically, he and his negotiators say their Chinese counterparts backtracked on an agreement to change laws aimed at enforcing the ...



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Zero Hedge

White House Planned To Use Huawei As Trade 'Bargaining Chip'

Courtesy of ZeroHedge

If there was any lingering doubt that President Trump has treated Huawei like a 'bargaining chip' during trade talks with the Chinese, Bloomberg just put the issue to rest.

In a report sourced to administration insiders, BBG reported that the Trump administration waited to blacklist Huawei until talks with the Chinese had hit an impasse, because they were concerned that targeting Huawei would disrupt the talks.

...



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Kimble Charting Solutions

Commodities; Long-Term Bottom Being Created This Month?

Courtesy of Chris Kimble.

Is the Thomson Reuters Equal Weight Commodities creating a long-term bottom? What the index does at (3) over the next few weeks, will go a long way to answering this important question!

Commodities don’t have much to brag about over the past 8-years, as lower highs have taken place since the peak back in 2011. After the peak in 2011, they have created falling channel (1).

The index hit the top of this channel the prior two months at (2), creating back to back bearish reversal patterns.

Softness this month has the index testing 2017 lows and rising support at (3). While ...



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Insider Scoop

Off-Roaders Are In Buying Mood, BMO Says In Polaris Upgrade

Courtesy of Benzinga.

A long winter and the worst of the U.S.-China trade war may both be in the rearview mirror for off-road vehicle maker Polaris Industries Inc. (NYSE: PII), BMO Capital Markets said Tuesday.

The Analyst

Gerrick Johnson upgraded Polaris from Mark...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 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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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

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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