Posts Tagged ‘small banks’

91 Banks Miss May TARP Payment, 68 Banks Miss Multiple Payments; Top 10 Sovereign Debt Default Risks; New “Merle Hazard” Song – “Legal Tender”

91 Banks Miss May TARP Payment, 68 Banks Miss Multiple Payments; Top 10 Sovereign Debt Default Risks; New "Merle Hazard" Song – "Legal Tender"

Courtesy of Mish 

Six hundred small banks still hold $130 billion in unpaid TARP payments with taxpayers on the hook. Records show Over 90 Banks Miss their May TARP Payment.

Statistics, compiled by SNL Financial from U.S. Treasury data, showed 91 banks and thrifts skipped the May dividend payment under the Troubled Asset Relief Program, or TARP. It was the first missed payment for 23 of the banks; for the others, it was at least their second miss.

The number of banks missing their TARP payments rose for the third straight quarter. In February, 74 banks deferred their payments; 55 deferred last November. SNL Financial’s analysis found 20 banks have missed four or more payments since the program began in 2008, while eight banks have missed five payments.

While many of the largest U.S. banks easily repaid billions in TARP aid, more than 600 smaller banks still hold $130 billion from the program, created at the height of the financial crisis.

Most of the banks failing to make TARP payments are bankruptcy candidates.

Top 10 Sovereign Debt Default Risks

Inquiring minds might also be interested in a slideshow of Government Debt Issuers Most Likely to Default.

Minus the slide images here are the results.

1. Argentina – CPD: 50.14% – Mid Spread: 1081.14
2. Venezuela – CPD: 49.76% – Mid Spread: 1013.78
3. Ukraine – CPD: 44.12% – Mid Spread: 884.91
4. Pakistan – CPD: 42.17% – Mid Spread: 803.20
5. Dubai, UAE – CPD: 32.46% – Mid Spread: 572.92
6. Republic of Latvia – CPD: 29.13% – Mid Spread: 513.31
7. Iraq – CPD: 28.25% – Mid Spread: 475.97
8. Iceland – CPD: 27.03% – Mid Spread: 476.34
9. Greece – CPD: 24.92% – Mid Spread: 341.54
10. Dominican Republic – CPD: 23.37% – Mid Spread: 375.00

From the article: "The countries are ranked by their cumulative probability of default (CPD), which gives the market’s assessment of an issuer’s likelihood of default over the life of a CDS contract."

Those numbers are from March as ranked by CMA. Greece is certainly higher now.

New "Merle Hazard" Song – "Legal Tender"

“Legal Tender” is an original lyric by Merle Hazard and…
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The small bank – big bank dichotomy

The small bank – big bank dichotomy

Courtesy of Edward Harrison at Credit Writedowns

After a huge fall off in credit consistent with the fall in nominal GDP, we are seeing credit stabilise at a lower level. Debt to GDP ratios may not be lower, but as GDP is lower, so too is credit in the system.  Yet there is a large difference between the haves and the have-nots, largely due to a difference in which banks received government largesse and which did not.

Bank analyst Don Coxe puts this in perspective for us:

A sustained U.S. economic recovery is unlikely until all banks, and not just the big institutions bailed out with government funds, start to recover from the effects of the financial crisis, according to longtime investment strategist Don Coxe.

Many banks that got funding from the government have seen their shares soar, while smaller, regional banks have not.

That’s a sign that investors believe the smaller banks are less well placed to participate in, and contribute to, the economic recovery, said the chairman of Coxe Advisors LLC in Chicago, who advises clients of the BMO Financial Group.

Think big banks – big business, small banks-smaller business.  In effect, the credit flow for large multinationals is now back to normal.  However, like consumers, small and medium-sized enterprises (SMEs) are finding a tougher reception. Revolving credit lines are being cut and loans are harder to come by (one reason Warren Buffett and Goldman Sachs are stepping into this space in this crucial holiday season).

This is a case of supply and demand constraints. One the one hand, credit supply is constrained because regional financials are loaded down with bad debts and have not received the same measure of bailout money that big banks have.  On the other hand, SMEs are having to downsize and are demanding less credit.

"The thousands of regional U.S. banks on which an economic recovery depends have not participated in the sudden explosion of trading profits" of the biggest five U.S. banks, he said.

The state aid granted to large banks during the financial crisis has convinced investors the government will step in again in future to save the behemoths if needed. That has helped pull share prices back up from the 12-year lows hit in March.

By


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Zombie Community Banks

Zombie Community Banks

zombie banks, dead banks walkingCourtesy of Tom Lindmark at BUT THEN WHAT

With all the hoopla this week about the big banks repaying their TARP loans you would tend to think that the program is, if not winding down, then in a collect the interest and wait for repayment mode. If that’s the case, they you’re thinking if wrong.

The WSJ reports that the Treasury is busier than ever dolling out money to banks. This time they aren’t shoveling it out the door in chunks of billions of dollars, rather they’re spooning it out to the nation’s community banks.

In contrast to Wall Street firms like J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and American Express Co. that returned $68.25 billion in one day this month to escape TARP and all the strings that were attached, a steady stream of small banks still is lining up for government money.

Since May 31, 20 small banks have received a total of $164.1 million in taxpayer-funded capital, according to the Treasury’s latest available figures. Half of those banks got the money in the same week that 10 big financial institutions gave theirs back.

Analysts see no end in sight to the trend. The recession and borrowers are squeezing most of the 8,200 federally insured commercial banks and savings institutions in the U.S., so even a dollop of TARP funds could make a difference. Some banks are turning to the government to fill a void left by investors who are leery about pouring money into the sector, despite the rebound by bank stocks since early March.

Meanwhile, the rules and stigma of TARP that turned some executives such as J.P. Morgan Chairman and CEO James Dimon against the program are irrelevant to small institutions.

Their employees usually don’t fly on corporate jets or collect hefty bonuses that trigger outrage from taxpayers, customers and Congress. And curbs on dividend payments are a modest price to pay for greater assurance that the banks can plow ahead with their core mission to gather local deposits, lend them nearby and support local charities, some recent TARP recipients said.

Maybe I’m missing the point, but TARP always seemed to me to have evolved into a program to recapitalize big banks, in essence to create the fiction that they were properly capitalized and hope that the banks would be able to repay the funds through earnings and a benevolent…
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Phil's Favorites

What's wrong with Huawei, and why are countries banning the Chinese telecommunications firm?

 

What's wrong with Huawei, and why are countries banning the Chinese telecommunications firm?

A major Chinese technology firm is under international scrutiny for its potential role in spying. AP Photo/Andy Wong

Courtesy of Frank J. Cilluffo, Auburn University and Sharon L. Cardash, Auburn University

The Chinese telecommunications company Huawei is under scrutiny around the globe over concerns that its close ties wi...



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Zero Hedge

Equity Markets Spoke - Did The Fed Listen?

Courtesy of ZeroHedge. View original post here.

While market commentators seem convinced The Fed will hike rates today, the market is less convinced - assigning a two-thirds chance to it, the lowest for an FOMC Day in years.

The bigger question is just how 'dovish'-ly can Powell hike? And, more importantly for world harmony, can he avoid the appearance of kow-towing to the President (because god forbid, establishment elitists would be forced to agree with the current White House resident's views).

His dovishness bar is set extremely high alr...



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Kimble Charting Solutions

Connect Series Webinar December 2018

Courtesy of Chris Kimble.

We cover dominating patterns in major global Indices, sectors, commodities and the metals markets.  We produce chart pattern analysis and empower people to improve entry and exit points.

To become a member of Kimble Charting Solutions, click here.

...

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Biotech

China's win-at-all-costs approach suggests it will follow its own dangerous path in biomedicine

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

 

China's win-at-all-costs approach suggests it will follow its own dangerous path in biomedicine

Megacity Shenzhen, as seen from Hong Kong, is a center for Chinese finance and tech. AP Photo/Kin Cheung

Courtesy of Hallam Stevens, Nanyang Technological University

The world was shocked by ...



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Insider Scoop

Wells Fargo Is Bullish On Shopify

Courtesy of Benzinga.

Related SHOP Benzinga's Top Upgrades, Downgrades For December 18, 2018 41 Biggest Movers From Friday ...

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Chart School

Weekly Market Recap Dec 16, 2018

Courtesy of Blain.

A significant selloff Friday had bears continuing to enjoy December and calls for the bulls for the Federal Reserve to save them.  It’s been a very long time since bears have had the upper hand for such an extended period.  Volatility continues to be very high and the charts continue to say “remain in safety”.  The Russell 2000 – the laggard of 2018 – broke a yearly low set in February and the S&P 500 broke October lows to create a “lower low”.

Karyn Cavanaugh, senior market strategist with Voya Investment Management, said that disappointing economic data out of China was the biggest driver of Friday’s losses. “The Chinese data was a dirt sandwich, not because it showed deceleration in the Chinese economy, but because it’s showing...



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Digital Currencies

Crypto Bull Tom Lee: Bitcoin's 'Fair Value' Closer To $15,000, But He's Sick Of People Asking About It

Courtesy of ZeroHedge. View original post here.

Listening to the crypto bulls of yesteryear continue to defend their case for new new all-time highs, despite a growing mountain of evidence to suggest that last year's rally was spurred by the blind greed of gullible marginal buyers (not to mention outright manipulation), one can't help but feel a twinge of pity for Mike Novogratz and Wall Street's original crypto uber-bull, Fundstrat's Tom Lee.

Lee achieved rock star status thanks to ...



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Members' Corner

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shares her thoughts on the political landscape with us in a follow up to our August interview.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow continued into June 2016?

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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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.

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