Take a look at the comments which show up here regarding the self inflicted wounds of the US financial sector, and housing sector: http://disqus.com/telegraph-36d487f3-f39d-482d-8f39-cc6bdc2d044f/
Plus, take a look at what Ireland is doing with banks that frankly have atomized, or vaporized, balance sheets.
The most recent part is this: Concerning Spain. Here’s a few points I noticed on the following website. The article also gives an update on Ireland now that the butchers bill has finally arrived.The base as well as worst case scenarios. Grim reading for Ireland but the 20 billion euros cash held for future pensions is insurance. To give you a scale of how big that fund is for Ireland (pop 4.5 million) it would be the similar to the US (66 times bigger) having 1.320 trillion euros in a wealth fund for future pensions. Ireland is not Greece and will not run out of money. Nor will Ireland return to the markets before early 2011. By the end of Feb 2011 the NAMA process is scheduled to be completed, purging bad debt from the banking system. Incidentally, jobless figures fell in August by just over 5,000 in Ireland. We shall see if this continues. http://notayesmanseconomics.wordpress.com/ From the article: ‘I have written previous articles on here about Spain and some misrepresentation in her fiscal statistics. The debate on Spanish statistics has moved on this morning as according to the Financial Times an email has been doing the rounds suggesting that Spanish GDP has been overstated by some 14.2%.’ It further stated ‘In the FT this: ‘We’ve contacted the INE to discuss.While we’re still waiting to speak to their economists — since they too were on austerity strike on Wednesday…’ Rumour or does it remind you of a country brought to my attention by your previous posts regarding Vanity Fair? Spain are already using their social fund for consumption according to a previous AEP article. If true, the implications are IMHO a potential game changer for the Eurozone. I am not alone. Apparently some months ago it was discussed and options examined at the highest level. A plan B. http://www.telegraph.co.uk/news/worldnews/europe/7837874/Germany-and-France-examine-two-tier-euro.html
The second most recent part is this: Not at all. Things have progressed since that posting. There will be no new lending for Anglo Irish. Instead Anglo Irish will be split into two between a bank holding the deposits and a separate unit to run down and manage those loans not passed to NAMA. This will allow the Anglo Irish liability to be quantified and ‘bounded’ with greater precision for Irish taxpayers. Many people in Ireland and no doubt abroad feel the actions of the previous management led by the now bankrupted Sean Fitzpatrick to have tarnished the Anglo Irish brand. So the bank in time will cease. On moral hazard for banker’s, former Anglo Irish Bank chairman Sean FitzPatrick now has an income of €188 per month, according to documents filed in the High Court as part of his bankruptcy proceedings. Furthermore the Garda is still investigating various dealings concerning Anglo Irish and the actions of Directors but that case is according to a Garda representative a ’slow burner’. We will see if criminal proceedings will be brought. It would appear many months before this investigation will be completed.
The second oldest part is this: Assets passed to NAMA are discounted when they are transfered from the banks. So 25 billion euros transfered to NAMA has already been discounted in two batches, written off as bad debt at 55% and 62% I believe in the various Irish Banks company accounts, a large proportion of which is Anglo Irish. The remaining batches projected for NAMA transfer, 19 billion Euros in total value is scheduled to be completed by February.The discount applied for the outstanding 19 billion euros NAMA loans to be transferred will be determined at a later date. Note loan assets acquired by NAMA are from all the Irish Banks not just Anglo Irish.Taoiseach Brian Cowen said today it should take no more than 15 years to wind down Anglo’s bad bank. Then it will cease. Brian Lenihan, Finance Minister declined to disclose the cost of the plan, estimates of which have been assessed by the National Treasury Management Agency.It has been reported The Financial Regulator at the Central Bank would determine the capital required by both the savings or funding bank and the asset recovery bank, and these figures will be known by October.So by February, perhaps sooner it appears markets should have a clearer projected total cost as they are demanding.As for my confidence in bank stress tests worldwide, many are clearly little more than stress free PR exercises. Perhaps the sarcasm in my comment did not come across clearly enough. Sorry for any misunderstanding. I’m a little tired and like many in Ireland, more than a little angry about what has transpired.
The oldest part is this: Think of 3 institutions in the future involvement for Anglo Irish Bank.Firstly NAMA, the National Asset Management Agency. They purchase loans, including those considered toxic, from the Irish banks, including Anglo Irish at a discount. The last batch for example averaged a 62% discount. Ireland is I believe over half way through the projected process (NAMA has a projected limit) to clear up Ireland’s banking system. This discount is written off in Anglo’s balance sheet as a bad debt, hence the record loss just announced for Anglo Irish. NAMA who purchase these loans, can recover the full loan amount from the lender(s) if its possible. NAMA also have oversight and can run these assets themselves if needed. Hotels are a prime example. Whether the State will break even or make a profit or loss, time will tell. Paying 38 cents on the euro for the last batch does allow some leeway. These loans are further backed by assets. For example, around 25% of the last batch consisted of property (shops, hotels, etc) around London I believe. Indeed many of the loans purchased by NAMA are outside Ireland. Obviously not worthless despite what rating agencies might say.Second , Anglo Irish new ‘Bad Bank’. This will run down the existing poorer performing loans at the bank. Possibly, I imagine including those prior to any sale to NAMA. The reason, avoiding incurring a bad debt crystalized immediately for the Bad Bank. This process might be a slower asset recovery process but will save Anglo Irish the discount to the State and bad write-off from its balance sheet. Again backed by assets.Third, the better performing loans & assets. The projected future of Anglo Irish ‘Good’ bank. The balance sheet shrunk to about 20% of its current size in initial reports.The whole process will in time (the next year or so I would imagine) ensure better ‘mark to market’ valuations in Ireland’s banking system as assets are accurately reflected.Tell how many other countries will be implementing fair value accounting , FASB 157 to the same degree? Or are many assets in banks valued at the original valuations from years ago? No doubt the various bank stress tests address this problem.According to Eurostat in Quarter 1 2010, Ireland’s GDP rose 2.7%. Yes this is undoubtably a bad time for the Irish State and its banking system. However the problems are being addressed. In the next year or so, Ireland might indeed surprise many.
Do you like a good crime novel – a corporate crime novel? If so The Monster: How a gang of predatory lenders and Wall Street bankers fleeced America – and spawned a global crisis by Michael W. Hudson is for you. Unfortunately it’s not a fictional novel but the history of the mortgage crisis that may yet bring down the US and world economy.
This book is not directly about the foreclosure crisis but about the seeds of that crisis – deceptive and fraudulent mortgages that left desperate people worse off than before and without a chance of meeting the obligations of the contracts they had signed.
The seeds were initially planted over 30 years ago in the form of deregulation of the financial industry. The seeds sprouted in the late 80s and blossomed into the S&L crisis. Little if anything was learned and the deregulation continued – still more seeds were planted. By the early and mid 90’s the players that had escaped the S&L crisis and even some who didn’t were back at it writing predatory sub prime loans. The deception and outright fraud was becoming even more prevalent easily circumventing the few new consumer protections. At about the same time mortgage backed securities were a hot commodity. The Wall Street investment banks had stayed clear but a familiar name in the most recent crisis, Lehman Brothers, saw an opportunity it couldn’t pass up. As the money to be made in subprime mortgages increased so did the deception and fraud as well as involvement by more and more Wall Street banks.
Like any good crime novel this story has a cast of villains and victims. Of course this is not a novel so the people are real. One of the main characters is Roland Arnall who grew a small Orange County S&L into the mortgage giant Ameriquest. The way it grew was to place sales and profit above all else. There was nothing an Ameriquest salesman would not do to close a loan.
At the downtown L.A. branch, some of Glover’s coworkers had a flair for creative documentation. They used scissors, tape, Wite-Out and a photocopier to fabricate W-2s, the tax forms that indicate how much a wage earner makes each year. It was easy: Paste the name of a low-earning borrower onto a W-2 belonging to a higher-earning borrower and, like magic, a bad loan prospect suddenly looked much better. Workers in the branch equipped the office’s break room with all the tools they needed to manufacture and manipulate official documents. They dubbed it the “Art Department.”
…………
What if a customer insisted he wanted a fixed-rate loan, but you could make more money by selling him an adjustable-rate one? No problem. Many Ameriquest salespeople learned to position a few fixed-rate loan documents at the top of the stack of paperwork to be signed by the borrower. They buried the real documents—the ones indicating the loan had an adjustable rate that would rocket upward in two or three years—near the bottom of the pile. Then, after the borrower had flipped from signature line to signature line, scribbling his consent across the entire stack, and gone home, it was easy enough to peel the fixed-rate documents off the top and throw them in the trash.
There was lots of money to be made so neither the investment banks that were packaging the loans or the investors buying them questioned the loans themselves. But the continued growth depended on a continued influx of new loans and rising home values – it was in effect a Ponzi scheme. When the housing bubble deflated in 2007 the Ponzi scheme collapsed.
I recommend The Monster: You can pretend it is fiction and have an enjoyable read or you can learn about how greed driven fraud and deception resulted in the worst economic crisis since the great depression. While Wall Street and the bankers are still quick to blame those who don’t make their mortgage payments you will who the real victims are.
Note:
I received a review copy of this book from the publisher.
Cross posted at Newshoggers
Nevada Voters Complain Of Problems At Polls - Las Vegas <b>News</b> Story <b>...</b>
LAS VEGAS -- Some voters in Boulder City complained on Monday that their ballot had been cast before they went to the polls, raising questions about Clark County's electronic voting machines. Tuesday, October 26, 2010.
Fantasy Football <b>News</b> Roundup, Week 8: Does Jon Kitna Have Value <b>...</b>
Checking in on the fantasy news of the day for Week 8.
Sad <b>news</b> for the New York baseball world
You probably didn't know Bill Shannon, but if you did, you would have liked him a lot. Bill died tragically on Tuesday morning, the victim of a fire in his New Jersey home. He was 69. Bill was the senior...
bench craft company complaints
bench craft company complaints
Nevada Voters Complain Of Problems At Polls - Las Vegas <b>News</b> Story <b>...</b>
LAS VEGAS -- Some voters in Boulder City complained on Monday that their ballot had been cast before they went to the polls, raising questions about Clark County's electronic voting machines. Tuesday, October 26, 2010.
Fantasy Football <b>News</b> Roundup, Week 8: Does Jon Kitna Have Value <b>...</b>
Checking in on the fantasy news of the day for Week 8.
Sad <b>news</b> for the New York baseball world
You probably didn't know Bill Shannon, but if you did, you would have liked him a lot. Bill died tragically on Tuesday morning, the victim of a fire in his New Jersey home. He was 69. Bill was the senior...
bench craft company complaints bench craft company complaints
Take a look at the comments which show up here regarding the self inflicted wounds of the US financial sector, and housing sector: http://disqus.com/telegraph-36d487f3-f39d-482d-8f39-cc6bdc2d044f/
Plus, take a look at what Ireland is doing with banks that frankly have atomized, or vaporized, balance sheets.
The most recent part is this: Concerning Spain. Here’s a few points I noticed on the following website. The article also gives an update on Ireland now that the butchers bill has finally arrived.The base as well as worst case scenarios. Grim reading for Ireland but the 20 billion euros cash held for future pensions is insurance. To give you a scale of how big that fund is for Ireland (pop 4.5 million) it would be the similar to the US (66 times bigger) having 1.320 trillion euros in a wealth fund for future pensions. Ireland is not Greece and will not run out of money. Nor will Ireland return to the markets before early 2011. By the end of Feb 2011 the NAMA process is scheduled to be completed, purging bad debt from the banking system. Incidentally, jobless figures fell in August by just over 5,000 in Ireland. We shall see if this continues. http://notayesmanseconomics.wordpress.com/ From the article: ‘I have written previous articles on here about Spain and some misrepresentation in her fiscal statistics. The debate on Spanish statistics has moved on this morning as according to the Financial Times an email has been doing the rounds suggesting that Spanish GDP has been overstated by some 14.2%.’ It further stated ‘In the FT this: ‘We’ve contacted the INE to discuss.While we’re still waiting to speak to their economists — since they too were on austerity strike on Wednesday…’ Rumour or does it remind you of a country brought to my attention by your previous posts regarding Vanity Fair? Spain are already using their social fund for consumption according to a previous AEP article. If true, the implications are IMHO a potential game changer for the Eurozone. I am not alone. Apparently some months ago it was discussed and options examined at the highest level. A plan B. http://www.telegraph.co.uk/news/worldnews/europe/7837874/Germany-and-France-examine-two-tier-euro.html
The second most recent part is this: Not at all. Things have progressed since that posting. There will be no new lending for Anglo Irish. Instead Anglo Irish will be split into two between a bank holding the deposits and a separate unit to run down and manage those loans not passed to NAMA. This will allow the Anglo Irish liability to be quantified and ‘bounded’ with greater precision for Irish taxpayers. Many people in Ireland and no doubt abroad feel the actions of the previous management led by the now bankrupted Sean Fitzpatrick to have tarnished the Anglo Irish brand. So the bank in time will cease. On moral hazard for banker’s, former Anglo Irish Bank chairman Sean FitzPatrick now has an income of €188 per month, according to documents filed in the High Court as part of his bankruptcy proceedings. Furthermore the Garda is still investigating various dealings concerning Anglo Irish and the actions of Directors but that case is according to a Garda representative a ’slow burner’. We will see if criminal proceedings will be brought. It would appear many months before this investigation will be completed.
The second oldest part is this: Assets passed to NAMA are discounted when they are transfered from the banks. So 25 billion euros transfered to NAMA has already been discounted in two batches, written off as bad debt at 55% and 62% I believe in the various Irish Banks company accounts, a large proportion of which is Anglo Irish. The remaining batches projected for NAMA transfer, 19 billion Euros in total value is scheduled to be completed by February.The discount applied for the outstanding 19 billion euros NAMA loans to be transferred will be determined at a later date. Note loan assets acquired by NAMA are from all the Irish Banks not just Anglo Irish.Taoiseach Brian Cowen said today it should take no more than 15 years to wind down Anglo’s bad bank. Then it will cease. Brian Lenihan, Finance Minister declined to disclose the cost of the plan, estimates of which have been assessed by the National Treasury Management Agency.It has been reported The Financial Regulator at the Central Bank would determine the capital required by both the savings or funding bank and the asset recovery bank, and these figures will be known by October.So by February, perhaps sooner it appears markets should have a clearer projected total cost as they are demanding.As for my confidence in bank stress tests worldwide, many are clearly little more than stress free PR exercises. Perhaps the sarcasm in my comment did not come across clearly enough. Sorry for any misunderstanding. I’m a little tired and like many in Ireland, more than a little angry about what has transpired.
The oldest part is this: Think of 3 institutions in the future involvement for Anglo Irish Bank.Firstly NAMA, the National Asset Management Agency. They purchase loans, including those considered toxic, from the Irish banks, including Anglo Irish at a discount. The last batch for example averaged a 62% discount. Ireland is I believe over half way through the projected process (NAMA has a projected limit) to clear up Ireland’s banking system. This discount is written off in Anglo’s balance sheet as a bad debt, hence the record loss just announced for Anglo Irish. NAMA who purchase these loans, can recover the full loan amount from the lender(s) if its possible. NAMA also have oversight and can run these assets themselves if needed. Hotels are a prime example. Whether the State will break even or make a profit or loss, time will tell. Paying 38 cents on the euro for the last batch does allow some leeway. These loans are further backed by assets. For example, around 25% of the last batch consisted of property (shops, hotels, etc) around London I believe. Indeed many of the loans purchased by NAMA are outside Ireland. Obviously not worthless despite what rating agencies might say.Second , Anglo Irish new ‘Bad Bank’. This will run down the existing poorer performing loans at the bank. Possibly, I imagine including those prior to any sale to NAMA. The reason, avoiding incurring a bad debt crystalized immediately for the Bad Bank. This process might be a slower asset recovery process but will save Anglo Irish the discount to the State and bad write-off from its balance sheet. Again backed by assets.Third, the better performing loans & assets. The projected future of Anglo Irish ‘Good’ bank. The balance sheet shrunk to about 20% of its current size in initial reports.The whole process will in time (the next year or so I would imagine) ensure better ‘mark to market’ valuations in Ireland’s banking system as assets are accurately reflected.Tell how many other countries will be implementing fair value accounting , FASB 157 to the same degree? Or are many assets in banks valued at the original valuations from years ago? No doubt the various bank stress tests address this problem.According to Eurostat in Quarter 1 2010, Ireland’s GDP rose 2.7%. Yes this is undoubtably a bad time for the Irish State and its banking system. However the problems are being addressed. In the next year or so, Ireland might indeed surprise many.
Do you like a good crime novel – a corporate crime novel? If so The Monster: How a gang of predatory lenders and Wall Street bankers fleeced America – and spawned a global crisis by Michael W. Hudson is for you. Unfortunately it’s not a fictional novel but the history of the mortgage crisis that may yet bring down the US and world economy.
This book is not directly about the foreclosure crisis but about the seeds of that crisis – deceptive and fraudulent mortgages that left desperate people worse off than before and without a chance of meeting the obligations of the contracts they had signed.
The seeds were initially planted over 30 years ago in the form of deregulation of the financial industry. The seeds sprouted in the late 80s and blossomed into the S&L crisis. Little if anything was learned and the deregulation continued – still more seeds were planted. By the early and mid 90’s the players that had escaped the S&L crisis and even some who didn’t were back at it writing predatory sub prime loans. The deception and outright fraud was becoming even more prevalent easily circumventing the few new consumer protections. At about the same time mortgage backed securities were a hot commodity. The Wall Street investment banks had stayed clear but a familiar name in the most recent crisis, Lehman Brothers, saw an opportunity it couldn’t pass up. As the money to be made in subprime mortgages increased so did the deception and fraud as well as involvement by more and more Wall Street banks.
Like any good crime novel this story has a cast of villains and victims. Of course this is not a novel so the people are real. One of the main characters is Roland Arnall who grew a small Orange County S&L into the mortgage giant Ameriquest. The way it grew was to place sales and profit above all else. There was nothing an Ameriquest salesman would not do to close a loan.
At the downtown L.A. branch, some of Glover’s coworkers had a flair for creative documentation. They used scissors, tape, Wite-Out and a photocopier to fabricate W-2s, the tax forms that indicate how much a wage earner makes each year. It was easy: Paste the name of a low-earning borrower onto a W-2 belonging to a higher-earning borrower and, like magic, a bad loan prospect suddenly looked much better. Workers in the branch equipped the office’s break room with all the tools they needed to manufacture and manipulate official documents. They dubbed it the “Art Department.”
…………
What if a customer insisted he wanted a fixed-rate loan, but you could make more money by selling him an adjustable-rate one? No problem. Many Ameriquest salespeople learned to position a few fixed-rate loan documents at the top of the stack of paperwork to be signed by the borrower. They buried the real documents—the ones indicating the loan had an adjustable rate that would rocket upward in two or three years—near the bottom of the pile. Then, after the borrower had flipped from signature line to signature line, scribbling his consent across the entire stack, and gone home, it was easy enough to peel the fixed-rate documents off the top and throw them in the trash.
There was lots of money to be made so neither the investment banks that were packaging the loans or the investors buying them questioned the loans themselves. But the continued growth depended on a continued influx of new loans and rising home values – it was in effect a Ponzi scheme. When the housing bubble deflated in 2007 the Ponzi scheme collapsed.
I recommend The Monster: You can pretend it is fiction and have an enjoyable read or you can learn about how greed driven fraud and deception resulted in the worst economic crisis since the great depression. While Wall Street and the bankers are still quick to blame those who don’t make their mortgage payments you will who the real victims are.
Note:
I received a review copy of this book from the publisher.
Cross posted at Newshoggers
bench craft company complaints
Nevada Voters Complain Of Problems At Polls - Las Vegas <b>News</b> Story <b>...</b>
LAS VEGAS -- Some voters in Boulder City complained on Monday that their ballot had been cast before they went to the polls, raising questions about Clark County's electronic voting machines. Tuesday, October 26, 2010.
Fantasy Football <b>News</b> Roundup, Week 8: Does Jon Kitna Have Value <b>...</b>
Checking in on the fantasy news of the day for Week 8.
Sad <b>news</b> for the New York baseball world
You probably didn't know Bill Shannon, but if you did, you would have liked him a lot. Bill died tragically on Tuesday morning, the victim of a fire in his New Jersey home. He was 69. Bill was the senior...
bench craft company complaints bench craft company complaints
Nevada Voters Complain Of Problems At Polls - Las Vegas <b>News</b> Story <b>...</b>
LAS VEGAS -- Some voters in Boulder City complained on Monday that their ballot had been cast before they went to the polls, raising questions about Clark County's electronic voting machines. Tuesday, October 26, 2010.
Fantasy Football <b>News</b> Roundup, Week 8: Does Jon Kitna Have Value <b>...</b>
Checking in on the fantasy news of the day for Week 8.
Sad <b>news</b> for the New York baseball world
You probably didn't know Bill Shannon, but if you did, you would have liked him a lot. Bill died tragically on Tuesday morning, the victim of a fire in his New Jersey home. He was 69. Bill was the senior...
bench craft company complaints bench craft company complaints
Nevada Voters Complain Of Problems At Polls - Las Vegas <b>News</b> Story <b>...</b>
LAS VEGAS -- Some voters in Boulder City complained on Monday that their ballot had been cast before they went to the polls, raising questions about Clark County's electronic voting machines. Tuesday, October 26, 2010.
Fantasy Football <b>News</b> Roundup, Week 8: Does Jon Kitna Have Value <b>...</b>
Checking in on the fantasy news of the day for Week 8.
Sad <b>news</b> for the New York baseball world
You probably didn't know Bill Shannon, but if you did, you would have liked him a lot. Bill died tragically on Tuesday morning, the victim of a fire in his New Jersey home. He was 69. Bill was the senior...
bench craft company complaints bench craft company complaints
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