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Former Federal Reserve chairman Alan Greenspan and Paul Volcker wrote the House Financial Services Committee earliy this month that they opposed a provision, backed by Rep. Ron Paul (R., Texas) that would expand the congressional Government Accountability Office’s audits of the Fed. The committee, ignoring the pleas from the two, endorsed the provision Thursday. Greenspan and Volcker, in a letter sent to the committee’s chairman and ranking Republicans, warned that the provision threatened the ability of the Fed to foster price stability independent of political interference.

Lawmakers expect to cap fund to dismantle a big failed bank at $200 billion Legislation mandating broad regulatory reform in the banking industry continued to take shape on Tuesday with lawmakers approving limits on the amount of taxpayer funds that could be used to dismantle "too-big-to-fail" insolvent financial institutions. The House Financial Services Committee made other changes to the bank reform bill, including alterations to the structure of the Federal Reserve. The legislation seeks to amass funds from large financial institutions and hedge funds that would be used to make payments to creditors and counterparties of a large failing financial...

It took just five weeks after the WorldCom accounting scandal erupted in 2002 for Congress to pass, and President George W. Bush to sign, the Sarbanes-Oxley Act. That... --snip-- The House Financial Services Committee this week approved an amendment to the Investor Protection Act of 2009 — a name George Orwell would appreciate — to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional ones as well. Some veterans of past reform efforts were left sputtering with rage. “That the Democratic Party is the...

Regulators close two Florida banks and on in California, costing the FDIC $986.4 million. NEW YORK (CNNMoney.com) -- Two Florida banks and one in California failed Friday night, bring the 2009 national tally to 123. Regulators closed Century Bank, Federal Savings Bank in Sarasota, Fla., Orion Bank in Naples, Fla., and Pacific Coast National Bank in San Clemente, Calif. Customers of all the failed banks are protected, however. The Federal Deposit Insurance Corp., which has insured bank deposits since the Great Depression, currently covers customer accounts up to $250,000.

U.S. Rep. Paul E. Kanjorski has Wall Street in a tizzy. Mr. Kanjorski, who is chairman of a key House Financial Services subcommittee, is proposing to let the federal government break up large financial institutions if they get so big their demise could threaten the nation's financial system. Mr. Kanjorski, D-11, Nanticoke, wants the government to have that power even if institutions are financially healthy. He plans to introduce legislation next week outlining his plans for new regulation of financial industry firms deemed "too big to fail" because failure could damage the nation's economy. Congress is considering a major overhaul...

In an expected move, the board of the Federal Deposit Insurance Corp. unanimously approved a 3-year prepayment by banks to the tune of $45 billion in order to put liquidity back into the Deposit Insurance Fund, which ran out of money in the third quarter, and has been running at a deficit ever since. The overall banking industry hasn’t fought against the move, saying it was less expensive than some of the alternatives out there. One difference the Independent Community Bankers of America asked for was for assessments to be under a two-year requirement, with an option for a third...

Commercial and multifamily mortgage lending in the U.S. fell 12 percent from the second quarter to the third quarter and is down 54 percent from year ago levels... The drop includes a year over year decrease in lending for all types of commercial properties. Loans for retail properties are down 62 percent. Loans for office properties are down 56 percent, MBA says. company downsizing has dampened demand for new office space across the country.

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John Reed, who originally helped merge Traveller's Group with Citibank with Sandy Weill, is performing a mea culpa for creating megazombie Citigroup (C): Bloomberg: “I’m sorry,” Reed, 70, said in an interview yesterday. “These are people I love and care about. You could imagine emotionally it’s not easy to see what’s happened." “I would compartmentalize the industry for the same reason you compartmentalize ships,” Reed said in the interview in his office on Park Avenue in New York. “If you have a leak, the leak doesn’t spread and sink the whole vessel. So generally speaking you’d have consumer banking separate...

my favorite part: "The real shocker that we discovered some time ago is that the FDIC ‘funds’ were never even held in a segregated bank account – the fees collected from the banks are accounted for as a part of the government’s general revenues that go towards military spending, bailouts, interest costs and other government programs. The FDIC ‘fund’ merely consisted of IOU’s from the general revenues accounts. And now that the Deposit Insurance Fund balance as of September 30, 2009 is negative13 the FDIC wants the institutions to prepay their assessments for all of 2010, 2011 and 2012. In...

GMAC, the former lending arm of General Motors Co., is in talks with the Treasury Department for a third injection of taxpayer aid, a further sign of the U.S. government's entrenchment in the U.S. auto industry. The Treasury Department mandated earlier this year that GMAC Financial Services raise an additional $11.5 billion in capital after undergoing a "stress test" along with 18 other banks. While other banks deemed undercapitalized have been able to raise funds from private investors, GMAC has been forced to go back to the government.

Besides giving advice on avoiding taxes and fraudulently getting home loans for brothels featuring 13-year-old Salvadoran girls illegally smuggled into this country, ACORN officials could soon be helping regulate your local bank, thanks to an amendment adopted by Rep. Barney Frank's House Financial Services Committee. The amendment was sponsored by Rep. Maxine Waters, D-CA, and provided that five slots on the oversight board for the proposed new Consumer Financial Protection Agency be reserved for representatives of "consumer protection, fair lending and civil rights, representatives of depository institutions that primarily serve underserved communities, or representatives of communities that have been significantly...

One of the penalties I pay for living on the North Shore is having underemployed investment bankers as neighbors. Smart enough guys, only a few years ago capable of buying large houses with cash, now left to rake leaves and shuttle kids around. A neighboring bond trader wandered over to our house earlier this week with a family carload for a noisy dinner (beef, noodles, and beer if you must know). I mentioned that he has been around home a lot assuming a lack of work in his trading area. Somewhat surprisingly I was wrong. A lack of pay has...

Loraine Mullen-Kress carries a Bank of America credit card and religiously pays off her balance. "Flawless credit," she boasted. Yet now, her good credit habits could cost her. Earlier this month Bank of America started notifying customers like Mullen-Kress that they will be charged a new annual fee of $29 to $99. "There is a big segment of their population that they will have never made money on, which is people who pay their bills on time every month," said Ben Woolsey, Director of Consumer Research at CreditCards.com. Bank of America said in a statement: "At this point we're testing...

.... Busting up the banking trusts is essential for the following reasons: -It eliminates the too-big-to-fail issue, which puts entire economies at risk. -Excessively large banks destroy democracies, like the United States, through inordinate influence on policy, politicians and regulators. -Oligopolies and monopolies are economically inefficient and charge excessive fees, earn excessive profits and pay excessive salaries and bonuses. -Oligopolies and monopolies don't innovate because they don't have to. -Oligopolies and monopolies are risky because they indulge in groupthink mistakes that are too large for economies and the business community to bear. -Oligopolies and monopolies fossilize markets by dealing with...

Banks in Florida, Georgia, Illinois, Minnesota and Wisconsin, were shuttered, costing the FDIC an estimated $356.6 million. The tally of bank failures easily broke past the No. 100 milestone on Friday night, with regulators announcing the year's 106th closure. That's more than four times the number that were closed in 2008, and the highest total since 1992, when 181 banks failed. Earlier on Friday evening the dubious honor of the 100th failure went to Partners Bank, of Naples, Fla., which had $65.5 million in assets, according to the Federal Deposit Insurance Corp. The 101st failure was American United Bank, of...

100: Partners Bank, Naples, FL 101: American United Bank, Lawrenceville, GA 102: Hillcrest Bank Florida, Naples, FL 103: Flagship National Bank, Bradenton, FL As you watch the bobbing metronome of Sheila C. Bair's head during this video ("...but as I said [left tick] we have the ability to immediately access [right tock] up to $500 billion from our Treasury line [left tick]...") wonder to yourself quietly: How is the FDIC going to slurp down another $500 billion without some roof rasing action on the debt ceiling? How can ANYONE promise that no insured depositor will ever (until the heat death...

Government regulators threatened to remove top Bank of America executives if they backed out of a buyout of failing brokerage giant Merrill Lynch, and offered to provide taxpayer funds to compensate for Merrill's poor performance, according to company records obtained by The Washington Times. The documents - e-mails between bank executives and their outside attorneys as well as board meeting "talking points" prepared for then-Bank of America Chief Executive Ken Lewis - offer new insight into the hardball tactics that produced one of the biggest deals negotiated during the late 2008 global financial crisis, one that is still reverberating on...

Government regulators threatened to remove top Bank of America executives in December if they didn't acquire Merrill Lynch, but also agreed to provide taxpayer funds to compensate for Merrill's poor performance, according to company records obtained by The Washington Times. The documents -- e-mails between bank executives and their outside lawyers as well as board-meeting talking points prepared for then-Chief Executive Ken Lewis -- indicate that former Treasury Secretary Henry Mr. Paulson Jr. and Federal Reserve Board Chairman Ben S. Bernanke promised to give the bank taxpayer bailout funds to compensate them for Merrill's poor performance. Summaries written by the...

Gee, who saw this one? Anyway, the point stands. The FDIC is clearly out of money, and this is nothing more than yet another legalized accounting fraud game, where they'll get "the money" now but allow the banks to "recognize" that "charge" over time. And now we find that this is not a short-term issue either: NEW YORK (CNNMoney.com) -- The government insurance fund designed to protect consumer bank deposits will likely stay in the red through 2012, Federal Deposit Insurance Corp. chief Sheila Bair said Wednesday. I know I have brought this up repeatedly, but these sorts of losses...

BIRMINGHAM, Ala. (AP) — Mayor Larry Langford, who could be tossed out of office and go to prison if convicted of federal bribery charges, recently offered some advice to a new Birmingham City Council member. "The illusion of power is the most dangerous drug on the planet," Langford said. "A little bit of power — nothing intoxicates like it." Last week's comment may sound a lot like the government's opening argument against Langford, 61, the most recent in a long line of prominent names in the state Democratic Party to face corruption charges. Jury selection begins Monday. Prosecutors claim a...

The government insurance fund designed to protect consumer bank deposits will likely stay in the red through 2012, Federal Deposit Insurance Corp. chief Sheila Bair said Wednesday. Testifying before members of the Senate Banking Committee, the nation's top commercial bank regulator stressed that her agency was taking immediate steps to replenish the dwindling fund. But she said those efforts would not put the rescue fund in the black until a little more than two years from now at the earliest.

As part of a voluntary program that ended on October 15, some 7,500 Americans with hidden offshore bank accounts ended the game of hide and seek with the IRS. They finally decided to tell the government where to find their assets. Some of these hidden accounts were pretty hard to lose track of --- one had more than $100 million in it.

Calif. Bank Becomes 99th in US to Be Shut in 2009 THE ASSOCIATED PRESS October 16, 2009 NEW YORK (AP) -- Regulators shut down San Joaquin Bank in California on Friday, marking the 99th failure this year of a federally insured bank. The Federal Deposit Insurance Corp. was appointed receiver of San Joaquin Bank, based in Bakersfield, Calif. It had $775 million in assets and $631 million in deposits as of Sept. 29. The FDIC said the bank's deposits will be assumed by Citizens Business Bank, based in Ontario, Calif. Its five branches will reopen Monday as branches of Citizens...

TREASURIES-Prices Up As Stock Slide Spurs Safety Bid Tue Jul 15, 2008 9:59am EDT By Ellen Freilich NEW YORK, July 15 (Reuters) - U.S. Treasury debt prices rose on Tuesday on safe-haven demand as stocks prices tumbled and as a weak banking sector cut expectations that the Federal Reserve will raise interest rates any time soon. As major stock market indexes fell in early trade, U.S. short-term interest rate futures cut back on implied prospects for Fed rate hikes over the next several months. Prospects for a rate hike by year-end fell to 82 percent after being almost fully priced...

We have a real judge! “The foreclosure sales (in question are) invalid because they failed to meet the requirements of (Massachusetts law),” Land Court Judge Keith Long wrote yesterday in reaffirming a decision he originally reached in March. At issue is "lost" (or improperly endorsed) paperwork when mortgages are sold from party to party, as typically happens many times during a securitization process. I have often argued that a lot of "lost" paperwork is in fact intentionally destroyed, as this is one of the few ways to cover up blatant fraud in the origination of mortgages - brokers putting the...

How to give an economics writer a coronary: Recommend something that has been done twice before, and both times led to disaster, including being a major contributor to The Great Depression. Well guess what: JP Morgan and the other banks are doing exactly that. Oct. 13 (Bloomberg) -- Banks will push the Obama administration to expand its mortgage-modification program to allow interest-only periods on reworked loans, seeking to bring more homeowners into the initiative while recognizing concern that it may only postpone defaults, according to JPMorgan Chase & Co. MAY? Can I remind people of history? Prior to the depression...

Today, Congresswoman Michele Bachmann called once again on Minnesota to follow the national lead and conduct a complete and independent audit of all of ACORN&'s activities in the State of Minnesota. Recent actions by ACORN employees caught on tape advising tax fraud for a prostitution business are not something Minnesotans support, Bachmann said. And, they shouldn't have to wait until another undercover investigator comes to town to verify Minnesota operations aren't tainted by the same questionable practices. In a letter sent to Senator Ann Rest, Chairman, and Representative Mike Beard, Vice Chairman, of the Legislative Audit Commission, Bachmann called for...

J.P. Morgan Chase & Co. said third-quarter earnings soared, beating analysts' expectations, as the banking giant was carried again by strong investment-banking results. They more than offset by continued increases in credit costs, which Chairman and Chief Executive Jamie Dimon said will remain elevated "for the foreseeable future" in its consumer and credit-card operations. Jamie Dimon .Shares rose 3.3% premarket to $47.15. J.P. Morgan, the first of the major banks to report results, said it saw broad earnings growth across commercial and retail banking as well during the quarter. Overall, banks are expected to post falling earnings in the most...

We were promised one, you know. Dennis Kneale, Larry Kudlow, hell, name a "mouthpiece" on ToutTV or in the sell-side of Fraud Street and you'll find someone claiming that "the recession is over." But if it is, how can this be true? Lockyer’s spoke before Controller John Chiang said state general fund revenue fell $1.1 billion below estimates during the first three months of the fiscal year that began July 1. Let's boil this down a bit: Sales tax revenues came in at $99.8 million, or 4.5% lower than expected. Income tax revenues were also off big, but remember that...

Small Banks Fail at Growing Rate, Straining F.D.I.C. By ERIC DASH Published: October 10, 2009 A year after Washington rescued the banks considered too big to fail, the ones deemed too small to save are approaching a grim milestone: the 100th bank failure of 2009. In what has become a ritual, the Federal Deposit Insurance Corporation has swooped down on a handful of troubled lenders almost every Friday, seizing 98 since January alone and putting their assets into the hands of another bank. While the parade of failures still represents a mere fraction of America’s small banks, it underscores a...

In a letter to The Senate Banking Committee today Representatives Grayson and Paul demanded of Senator Dodd that Bernanke's reconfirmation hearing be suspended until The Fed provides answers to several questions, specifically: 1.Information that Bloomberg reporter Mark Pittman has requested via a Freedom of Information Act Request on the Bear Stearns rescue and that the Federal Reserve is contesting in the courts and which Manhattan Chief U.S. District Judge Loretta Preska has ordered by turned over by the Federal Reserve. 2.Information that Rep. Grayson requested in February at a hearing and by follow-up letter on which institutions received the $1.2...

Let's cut the crap here with the claims that the "FHA is making sound loans:" The idea the FHA needs a rescue is “just plain wrong,” Stevens said in an Oct. 6 letter to the Wall Street Journal. That’s in part because the FHA’s accounting method mean its reserves are enough to cover more than 30 years of projected losses, assuming no revenue from new business, he said. This is just plain pump-monkey nonsense. FHA currently requires 3.5% down. Remember that (contrary to the Realtard's assertions) all home purchases are instantly underwater by approximately 8% from their "purchase price" at...

Michael Geoghegan, the chief executive of HSBC, has said he fears the global economy faces a second downturn. The comments from Mr Geoghegan, who leads one of the world’s largest banks, helped to push the FTSE 100 down in early trading by six points, or 0.1pc. In an interview with the Financial Times, Mr Geoghegan. who is moving his office from London to Hong Kong, said that HSBC was likely to delay expansion plans because of the economic outlook. “Is this a V recovery or a W? [I think] it’s the latter. [If I’m right], we have to be very...

SYDNEY — Australia's central bank unexpectedly raised interest rates by a quarter point Tuesday, the first major economy to increase the cost of borrowing amid signs its recovery from the global slump is gaining momentum. The Reserve Bank of Australia raised its cash rate to 3.25 percent from a 49-year low of 3 percent. Between September 2008 and April this year, the rate was slashed a total of four and a quarter percentage points as the financial crisis morphed into a global recession.

Soros: US Banking System Is "Basically Bankrupt" Henry BlodgetOct. 5, 2009, 2:13 PM A trio of bears weighed in today. It's hard to argue with any of them. * Soros says our banking system is "basically bankrupt" and consumers have debt coming out of their ears. * Roubini thinks the market is discounting a "v-shaped" recovery and will therefore be disappointed with a "U" * Robert Prechter (Elliott Wave guru) says the bear market resumed in September. Prechter, of course, is predicting a full blown Depression.

Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), says that despite multiple statements on Oct. 14 of last year that these nine banks were healthy and only receiving government funds for the good of the country's economy, federal officials knew otherwise.

The prime sponsor of a plan to audit the Federal Reserve, which oversees U.S. monetary policy, U.S. Rep. Ron Paul, R-Texas, says his plan has reached 300 co-sponsors in the U.S. House. The legislation calls for a full and complete audit of the Federal Reserve by the Government Accountability Office, reported to Congress by the end of 2010. "I continue to be pleased that so many of my colleagues are willing to stand up for transparency and accountability in government by cosponsoring this bill," Paul said today.

"Today, I was listening to the Glenn Beck program and heard about Rep. Paul Kanjorski’s comments on the financial crisis that took place on September 15th, 2008. According to Mr. Kanjorski: “On Thursday [September 15] , at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of $550 Billion dollars in a matter of an hour or two. Money was being removed electronically. The treasury tried to help with $150 Billion, but could not stem the tide. It was an electronic run on the banks The treasury intervened...

Regulators have shut Warren Bank in Warren, Mich., and two small banks in Colorado and Minnesota, boosting the number of failed U.S. banks this year to 98 as loan defaults rise in the worst financial climate in decades. The Federal Deposit Insurance Corp. took over Warren Bank, with about $538 million in assets and $501 million in deposits as of July 31. The Huntington National Bank, based in Columbus, Ohio, agreed to assume the deposits and about $83 million of the assets of the failed bank. The FDIC will retain the remaining assets for later disposition. Warren Bank's six branches...

OCEANSIDE, N.Y. (CBS) ― TD Bank's computer system has been on the fritz for days, causing chaos with balance statements. Customers are furious. On Thursday night, TD Bank was scrambling to fix a computer glitch that has millions of customers angry and confused about their account balances. The bank is now promising to reimburse those affected by the frustrating malfunction. "Very frustrating, very aggravating and scary," said Norma Hernandez, whose account registered zero balance. Online computer glitches with direct deposit created a near run on the bank.

Bank of America Corp. announced today that embattled chief executive Ken Lewis has notified the board of directors of his decision to retire effective Dec. 31. The bank said the board will continue ongoing planning to ensure his successor is selected by that date. Lewis will retire as CEO and as a director.

IMF warns of more Euro bank defaultsCiti Group nearing moment of truthFDIC is deep into the red - feds concernedREITs (commercial real estate) is jepardy The second real estate bubble is about to burst, beware of the fall of the REITs! Real estate investment trusts (REITs) are leveraged-financed property investments that are abundant within the commercial real estate investment market. During the good times when the so-called "liar loans" regularly went to under qualified home buyers and prices surged beyond all reason, the REITs made a bundle from surging revenues as property values soared. With the collapse of the...

You have to love the "moral outrage" expressed in articles like this: The information that flowed from the banks, the ratings agencies, the regulatory agencies, and the mainstream media—the bedrock of the financial markets, in a sense—was viewed with great suspicion, and that created an opportunity for financial bloggers: a motley assortment of amateurs and professionals from all over the map. There are traders, economists, venture capitalists, financial advisers, and pajama-clad cranks all vying to explain the complex machinations that got us into this mess and to critique governmental solutions. Complex machinations? On the contrary. The only thing that is...

For the last two weeks, much of Wall Street — and even President Obama — looked back and assessed how the financial world is different today than it was a year ago. A year ago, Lehman Bros. failed and Bank of America announced its acquisition of Merrill Lynch. In swift order, Goldman Sachs and Morgan Stanley — two investment banks left standing — became bank holding companies. The government committed hundreds of billions of dollars to stabilize the highly leveraged institutions. Now it is time to look forward. While history's lessons must never be ignored, so too must history not...

Last week I was very pleased that the Financial Services Committee held a hearing on the Federal Reserve Transparency Act, HR 1207. The bill has 295 cosponsors and there is also strong support for the companion bill in the Senate. This hearing was a major step forward in getting the bill passed. I was pleased that the hearing was well-attended, especially considering that it was held on a Friday at nine o’clock in the morning! I have been talking about the immense, unchecked power of the Federal Reserve for many years, while the attention of Congress was always on other...

Guillermo Loaiza, a loan officer for a unit of J.P. Morgan Chase & Co. in Phoenix, has resigned from the board of Acorn Housing, a spokesman for J.P. Morgan said. Acorn Housing is an affiliate of the community-organizing group Acorn, the full name of which is the Association of Community Organizations for Reform Now. Both Acorn and Acorn Housing have been under fire since the recent release of secretly recorded videos that depicted Acorn employees offering advice on evading taxes, setting up brothels and smuggling illegal immigrants. J.P. Morgan has said it doesn't have a regular working relationship with Acorn...

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on...

It turns out that Najibullah Zazi, the person arrested in connection in with a suspected New York City subway bomb plot, was able to obtain over $50,000 in loans from the Bank of America, Chase, Capital One, Discover and Citibank despite having no assets to pledge nor a steady work history. Treasury Secretary Timothy Geithner acknowledged that “some banks may have been a little lax in vetting borrowers, but let me remind you, we’re in a recession and it is the Administration’s policy to encourage banks to push the money the government lent them out the door as fast as...

WASHINGTON (AP) - Treasury officials and regulators are weighing a fresh round of bailouts for banks that were deemed too risky to qualify for earlier aid. Representatives from the Treasury Department, Federal Deposit Insurance Corp. and House Financial Services Committee discussed the plan by phone Thursday, said California Bankers Association Chairman Dan Doyle, who was on the call. Small community banks are struggling as commercial real estate and other loans go sour. Officials and industry representatives are considering how to get money to those banks, Doyle said Friday.