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

Utilities are starting to invest in big batteries instead of building new power plants

 

Utilities are starting to invest in big batteries instead of building new power plants

This is what a 5-megawatt, lithium-ion energy storage system looks like. Pacific Northwest National Laboratory

Coutesy of Jeremiah Johnson, North Carolina State University and Joseph F. DeCarolis, North Carolina State University

Due to their decreasing costs, ...



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Zero Hedge

Elon Musk Takes Out $50 Million in New Loans, Mortgaging Five Homes

Courtesy of Zero Hedge

We were one of the very first to speculate that Elon Musk had mortgaged 5 of his homes in late January, when we highlighted research by an internet sleuth on Musk's personal financial situation. According to public records cited by Tesla skeptic EVent Horizon and laid out in a timeline on Sutori in late January, Elon Musk looked as though he had leveraged some of his personal real estate.

A follow up report from Bloomberg ha...



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ValueWalk

KHC To Be Bought Out By Berkshire: Here Is Why Its A Possibility

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email to investors discussing buyer beware of consumer staples sellers; Stamps.com Inc. (NASDAQ:STMP) and The Kraft Heinz Company (NASDAQ:KHC) blowups; Will Buffett buy KHC?; Is the #3G model flawed?; Asia Wealth Summit; Theranos.

I’m sending out today’s email early because there’s so much juicy/timely stuff…

Q4 hedge fund letters, conference, scoops etc...



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Kimble Charting Solutions

Giant Topping Pattern Could Be Forming, Says Joe Friday

Courtesy of Chris Kimble.

The first fact of the day; The long-term trend for tech remains up and the decline into the lows on Christmas Eve DID NOT break this trend!

This chart looks at NDX 100 ETF (QQQ) on a weekly basis over the past 14-years. For the past decade, since the lows in late 2009, QQQ has remained inside of rising channel (1). As you can see the decline into the end of the year lows, did nothing more than test support, which held and a strong rally has followed!

Over the past few months, QQQ could be forming a “Head & Shoulders&...



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Insider Scoop

Salesforce.com's Q4 Report Should Trigger Higher Valuation, Says Bullish Oppenheimer

Courtesy of Benzinga.

Related CRM Oppenheimer Praises HubSpot's Execution, Downgrades On Valuation Benzinga's Top Upgrade...

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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Thursday, 02 August 2018, 07:48:20 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: $600 BN interest payments for US gov, print baby print



Date Found: Sunday, 05 August 2018, 09:22:26 PM

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Comment: Hire FED interest rates always brings double trouble



Date Found: Monday, 06 August ...

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Digital Currencies

Cryptos Are Surging: Bitcoin, Ethereum Hit One-Month Highs As Institutions Dip Toes

Courtesy of Zero Hedge

Cryptocurrencies are surging while the US equity markets take the day off. Ethereum is up over 18% from Friday's 'close' and the rest of the crypto space is a sea of green. While no immediate catalyst (headline or technical level) is clear, increasing chatter over institutional investors dipping their toes in the space have prompted an extension of the positive trend.

A sea of green...

Source: Coin360

Ethereum is leading the charge follow...



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Biotech

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

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

 

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

Illustration of acute lymphoblastic leukaemia, showing lymphoblasts in blood. Kateryna Kon/Shutterstock

Courtesy of Alba Rodriguez-Meira, University of Oxford and Adam Mead, University of Oxford

...

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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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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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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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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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