Tag Archives: Bailout Fail

Spain Issues Retroactive 0.03% Tax on Bank Deposits

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“Spain will retroactively tax bank deposits to January 1, 2014 stating the move will boost growth and job creation.  Guru Huky correctly labeled the tax for what it is ‘More than a tax, this looks like a mini seizure of deposits. Someone likely needs a few million and to balance the books.’  The notion that a tax increase will boost the economy is of course absurd. But don’t worry, it’s only 0.03%, nudge nudge, wink wink … for now.”

http://globaleconomicanalysis.blogspot.com/2014/07/spain-issues-retroactive-003-tax-on.html

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U.S. Economy Shrank in First Quarter by Most in Five Years

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“The U.S. economy contracted in the first quarter by the most since the depths of the last recession as consumer spending cooled.  Gross domestic product fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previously reported 1 percent drop. It marked the biggest downward revision from the agency’s second GDP estimate since records began in 1976. Business investment fell at a 1.2 percent annualized rate, compared with a previously reported 1.6 percent annualized drop. Companies reduced their spending on structures at a 7.7 percent pace, and spending for equipment fell 2.8 percent, today’s report showed.”

http://www.bloomberg.com/news/2014-06-25/economy-in-u-s-shrank-in-first-quarter-by-most-in-five-years.html

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Greek Banks See Quadrupling of Housing Loans by Next Year

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“Greece’s four largest banks, encouraged as the economy claws itself out of recession, plan to double mortgage lending this year and may do it again in 2015, according to Kalantonis. Home loan originations in Greece plunged from 15 billion euros at the peak in 2007 to less than 250 million euros ($340 million) last year, he said. [Banks] are counting on the growth rate of non-performing loans to stabilize once a law preventing banks from foreclosing on property is dismantled.  The government, under pressure to strengthen banks after receiving a total of 240 billion euros in aid, is forcing homeowners, who can pay their mortgage but don’t, to do so.”

http://www.bloomberg.com/news/2014-07-10/greek-banks-see-quadrupling-of-housing-loans-by-next-year.html

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Portugal banking crisis sends tremors through Europe

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“A mounting crisis at one of Portugal’s biggest banks and signs of a deepening economic slowdown in Europe have sent tremors through financial markets, triggering a sharp fall on European bourses and a flight to safety across the world.  Portugal’s regulator suspended trading of Banco Espirito Santo after its share price crashed 17pc in Lisbon, reviving worries about the underlying health of Europe’s banks. Data released on Thursday showed that industrial output for May fell 1.7pc in France and 1.2pc in Italy. It has fallen for three months in a row in Germany, hit by Russia’s recession and weakness in China and Japan.”

http://www.telegraph.co.uk/finance/financialcrisis/10960563/Portugal-banking-crisis-sends-tremors-through-Europe.html

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Will SoFi Take Sallie Mae’s Best Customers?

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“After the financial crisis proved the government would spend tens of trillions of dollars to keep banks from going belly up, you would think that nothing will kill them. But now the ineffable forces of Stanford-branded reinvention are going after their customers. Do investors in publicly traded lenders need to get out before it’s too late?  A case in point is student lending giant, SLM – formed as the Student Loan Marketing Association — which is in the cross-hairs of a San Francisco-based peer-to-peer lending powerhouse, Social Finance, Inc. (SoFi). As CEO Mike Cagney, a graduate of Stanford Business School, explained, SoFi is growing fast.”

http://www.forbes.com/sites/petercohan/2014/05/22/will-sofi-take-sallie-maes-best-customers

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ECB: Bank With Us … and We’ll Charge You Interest

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“This morning, the ECB took the radical stepof cutting its deposit rate to negative 0.1 percent. It also lowered its benchmark lending rate (similar to the federal funds rate the U.S. Federal Reserve has been raising and lowering for decades) to 0.15 percent from 0.25 percent.  Furthermore, it tried to boost the mortgage and business loan businesses by offering to buy Asset Backed Securities (ABS) and by launching more Long-Term Refinancing Operations. While central banks in Sweden and Denmark took tentative steps in the direction of negative rates, the ECB’s move is unprecedented because no major world central bank has ever tried it before.”

http://www.moneyandmarkets.com/ecb-bank-with-us-and-well-charge-you-interest-61946

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Bill Bonner: This Hugely Popular Investment Is About to Blow Up

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Bill-Bonner2

“In a normal world, savers have the choice of staying in cash or quasi-cash and receiving a fair rate of interest. No more. The interest they receive on a 10-year Treasury note is barely over 2.5%. But the real rate of consumer price inflation – according to the most exhaustive survey, done by the MIT, the Billion Prices Project – is 3.91%.  What kind of world is it where an honest householder loses nearly 1.5% a year on his savings? It is an odd, rigged-up and dangerously windy one.   Investors are stretching out their sails to get higher yields. As a result, bond prices have gone up, reducing yields on bonds rated CCC – below investment grade – to the lowest levels ever recorded.”

http://www.bonnerandpartners.com/this-hugely-popular-investment-is-about-to-blow-up/

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Bailout Banks Made Riskier Loans: Study [2011]

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“The government bailout made banks appear safer but actually caused them to take on more credit risk, according to a University of Michigan study released Wednesday. According to a working paper by finance professors Ran Duchin and Denis Sosyura of the university of Michigan’s Ross School of Business entitled Safer Ratios, Riskier Portfolios: Banks’ Response to Government Aid, banks participating in the government’s Capital Purchase Program as part of the Troubled Assets Relief Program, or TARP, ‘significantly increased their investments in risky securities,’ by 10%, ‘displacing safer assets, such as Treasury bonds, short-term paper, and cash equivalents.'”

http://finance.yahoo.com/news/Bailout-Banks-Made-Riskier-tsmf-3581730230.html

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Five+ Years of Fed Futility Laid Bare for All to See

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“It has been five-and-a-half years since Lehman Brothers, AIG, Fannie Mae, Freddie Mac, and other casualties of the credit crisis imploded! We’ve been subjected to more than a half-decade of the Fed’s supposedly useful and appropriate medicine … Unlimited money printing.  Zero percent interest rates.  Gargantuan bank bailouts.  Deliberate attempts to inflate stock and house prices.  And for what?  More than $3 TRILLION in extra padding on the Fed balance sheet doesn’t look like it’s done much for the broad economy.  GDP grew just 0.1 percent in the first quarter.   Even that dismal reading was propped up by a massive surge of $43.3 billion in health care spending tied to the Obamacare rollout.”

http://www.moneyandmarkets.com/five-years-of-fed-futility-laid-bare-for-all-to-see-60708

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France vows to defend jobs as GE bids for bailed-out energy company

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“‘We won’t let Alstom sell this national champion behind the back of its shareholders, its employees and the French government,’ Economy Minister Arnaud Montebourg wrote on Twitter before the meetings, accusing Alstom CEO Patrick Kron of ‘a breach of national ethics’.  Alstom, which is suffering from debt and falling demand, was bailed out by the French government in 2004, but needs help again. Smaller than its rivals, it was hardest hit by a slump in orders for power equipment since the 2008 economic downturn depressed electricity prices.  At the weekend, Alstom’s German rival Siemens proposed a swap of power and rail assets to counter a potential Alstom-GE energy tie-up.”

http://www.bdlive.co.za/world/europe/2014/04/29/france-vows-to-defend-jobs-as-siemens-and-ge-battle-for-alstom

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