Tag Archives: Too Big To Succeed

Eric Holder: Some Banks Are So Large That It Is Difficult For Us To Prosecute Them

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“While it is widely assumed that the too-big-to-fail banks in the US (and elsewhere) are beyond the criminal justice system – based on simple empirical fact – when the Attorney General of the United States openly admits to the fact that he is “concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them, since, ‘it will have a negative impact on the national economy, perhaps even the world economy,’ one has to stare open-mouthed at the state of our union. It appears, just as the proletariat assumed, that too-big-to-fail banks are indeed too-big-to-jail.”

http://www.zerohedge.com/news/2013-03-06/eric-holder-some-banks-are-so-large-it-difficult-us-prosecute-them

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How Is Bernanke Going to Land His Helicopter?

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“Housing prices are climbing at near double digit rates. The stock market just hit a new high. At some point price inflation kicks in. How is Bernanke going to land his helicopter? If he stops printing, it all crashes.”

http://www.economicpolicyjournal.com/2013/03/how-is-bernanke-going-to-land-his.html

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Fannie Mae and Freddie Mac to begin merging operations

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“The regulator of mortgage finance giants Fannie Mae and Freddie Mac detailed plans Monday to begin contracting their business while merging their securitization operations.  Federal Housing Finance Agency acting director Edward DeMarco said the two, rescued by the government in 2008 in a $180 billion bailout after the housing market collapse, needed to begin reducing their dominance of the market as private financing makes a comeback.  One effort planned for this year is to raise the fees they charge to mortgage lenders for guaranteeing their loans, reducing the market’s near-complete dependence on the two.”

http://www.rawstory.com/rs/2013/03/04/fannie-mae-and-freddie-mac-to-begin-merging-operations/

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Why Should Taxpayers Give Big Banks $83 Billion a Year?

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“Banks have a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail.  Economists have tried to pin down exactly how much the subsidy lowers big banks’ borrowing costs. In one relatively thorough effort, researchers put the number at about 0.8%. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year.”

http://www.bloomberg.com/news/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-.html

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Congress Asks Bernanke For Full Risk Analysis On Fed’s Soaring Balance Sheet

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“In a letter penned by the Chairman of the House Oversight & Government Reform Committee, Jim Jordan, says that he is ‘troubled by the corresponding effect that the Federal Reserve’s expanding portfolio could have on current and future economic growth’ and has asked the Fed what its ‘future plans to unwind the [$3 trillion and rising at $885 billion per month] portfolio’ are.”

http://www.zerohedge.com/news/2013-02-21/congress-asks-bernanke-full-risk-analysis-feds-soaring-balance-sheet

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Revel casino’s bankruptcy threatens plans to make Atlantic City a gambling-plus destination

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“It was to offer more than just gambling. It would provide a sumptuous, Las Vegas-style experience. And that was the game plan, supported exuberantly by Gov. Christie and strategized by marketers and tourism experts.  Now that major piece in the remodeling of Atlantic City is in doubt. Revel said Tuesday that it would seek Chapter 11 bankruptcy protection. If Revel tanks, so, too, might much of the vision of Atlantic City as a year-round resort.  The $2.4 billion casino – the most expensive ever built in New Jersey – received more than $300 million in state construction funding.”

http://www.philly.com/philly/news/homepage/20130221_Revel_casino_s_bankruptcy_threatens_plans_to_make_Atlantic_City_a_gambling-plus_destination.html

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U.S. Banks Bigger Than GDP as Accounting Rift Masks Risk

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“Applying stricter accounting standards for derivatives and off-balance-sheet assets would make the banks twice as big as they say they are — or about the size of the U.S. economy — according to data compiled by Bloomberg.  U.S. accounting rules allow banks to record a smaller portion of their derivatives than European peers and keep most mortgage-linked bonds off their books. That can underestimate the risks firms face and affect how much capital they need.  Using international standards for derivatives and consolidating mortgage securitizations, JPMorgan, Bank of America and Citigroup would become the world’s three largest banks and Wells Fargo the sixth-biggest.”

http://www.bloomberg.com/news/2013-02-20/u-s-banks-bigger-than-gdp-as-accounting-rift-masks-risk.html

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PBS Runs an Article on Government Default

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“Should the U.S. government default?  Wrong question.  The right question: Can the U.S. government avoid defaulting? The answer is clear: no.  It will default. It is $222 trillion in the hole. That’s the present value of its future obligations.  Of course it’s going to default.  Would that be bad? Not for taxpayers. Would it be bad for the Powers That Be who run this country? Yes. Devastating. It’s coming. The mainstream media have ignored this statistically inevitable problem. The problem threatens the Establishment as no other. So, the media pretend it does not exist. But the blackout may at long last be cracking. We read this on PBS.”

http://teapartyeconomist.com/2013/02/15/liberal-pbs-runs-an-article-on-the-benefits-of-government-default/

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How A Rookie Excel Error Led JPMorgan To Misreport Its Risk For Years

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“If this glaringly amateur error was present in America’s largest bank by assets, and one which proudly boasts a ‘fortress balance sheet’, an error which just so happens feeds into countless other input cells driven by the firm’s VaR calculation, leading to capital allocation, trading, and overall executive decisions many of which have a direct impact on the firm’s exposure to $72 trillion in over the counter derivatives, what can one say about the thousands of other banks, which are not as closely ‘supervised’ by the Federal Reserve as JPMorgan is (supposedly).”

http://www.zerohedge.com/news/2013-02-12/how-rookie-excel-error-led-jpmorgan-misreport-its-var-years

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TARP: The bailout success story that wasn’t

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“The idea that TARP is somehow a wash because a few banks repaid the bailouts with interest is misleading. The reality is that bailed-out firms essentially wrote off their losses on taxes. As of Dec. 30, TARP was still owed $67.3 billion, including $27 billion in realized losses — which is to say, that money is gone and is never coming back.  Now, TARP is losing money as it tries to exit the programs.  A new report by SNL Financial shows the Treasury Department is taking a beating in auctions of the Capital Purchase Program, one of the pipelines through which bailout money flowed.”

http://www.marketwatch.com/story/losses-mounting-in-bank-bailouts-2013-02-12

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