Free Republic

When it comes to residential mortgages, big banks are waving the white flag. Banks originated 74% of all mortgages in 2007, but their share fell to 52% in 2014, the most recent data available from the Mortgage Bankers Association. And it could go even lower. But even at these levels, the big bank backtrack is reshaping a lending landscape that’s already undergone seismic shifts since the housing bubble burst. While there’s widespread agreement that banks should have been reined in — and perhaps punished — after playing a major role in the housing bubble that helped tank the economy, the...

Shares in some of the world's biggest banks are plunging. Financial stocks in the S&P 500 are down more than 11% so far this year. That's worse than oil, energy stocks, and even the emerging markets index. European banks have fallen even further. Deutsche Bank (DB) has lost 31% so far this year, Unicredit (UNCFF) is down 35%, and Credit Suisse (CSGKF) is 30% down. Barclays (BCLYF), BNP Paribas (BNPQF), Societe General (SCGLF), and UBS (UBS) have all lost about 20% since the beginning of 2016. Bank earnings have generally been disappointing. Credit Suisse shares hit a 24-year low after...

Movie sequels are rarely as good as the original films on which they're based. The same dictum, it appears, holds for finance. The 2008 housing market collapse was bad enough, but it appears now that we're on the verge of experiencing it all again. And the financial sequel, working from a similar script as its original version, could prove to be just as devastating to the American taxpayer. The Federal National Mortgage Association (commonly referred to as Fannie Mae) plans a mortgage loan reboot, which could produce the same insane and predictable results as when the mortgage agency loaned so...

Billionaire businessman Maurice "Hank" Greenberg backed away from an alleged $10 million contribution he was said to have made to a PAC affiliated with the presidential campaign of former Florida Governor Jeb Bush.

In 2016, the Federal Reserve will pay at least $12.2 billion to U.S. and foreign banks to keep the money created via its quantitative easing programs out of the economy. If the Fed raises rates as expected next year, the amount nearly doubles to $23.1 billion. From 2008 to 2015, the Fed purchased over $4 trillion worth of bonds to stimulate growth in the economy. Risk markets responded, as is demonstrated by the close correlation between the S&P 500 and growth of the Fed's balance sheet through its bond purchases.

In an op-ed published in the Financial Times, John Reed says large banks like the one he used to run are now "inherently unstable and unworkable." The man who was one of the chief architects of the "Big Bank" model now says says the United States never should have repealed the Glass-Steagall banking act in 1999. That's exactly what Democratic presidential hopefuls Bernie Sanders and Martin O'Malley have been arguing on the campaign trail. They want the law reinstated. Hillary Clinton and the Republican candidates do not. As CEO of Citi from 1984 to 2000, Reed was one of the...

Presidential candidate and U.S. Sen. Ted Cruz at the fourth GOP debate in Milwaukee, Wisconsin on November 10, 2015. MILWAUKEE — A rare debate flub by U.S. Sen. Ted Cruz Tuesday night sparked a boomlet of social media jokes about Texas presidential candidates, but the White House hopeful's most notable moment came when discussing how he would handle a banking crisis as the country's chief executive. Asked toward the end of the fourth GOP presidential debate about the banking crisis of 2008, and the notion of the government treating some banks as "too big to fail," Cruz said he would...

Big banks better start looking under the couch cushions. They need to come up with $1.2 trillion to fortify themselves from the next financial meltdown. Global financial regulators Monday issued new rules that are designed to prevent a failing big bank from dragging down the entire financial system. That's what happened in 2008 when Lehman Brothers imploded, sparking the worst financial crisis since the Great Depression. ... Wells Fargo (WFC) and JPMorgan are the U.S. banks most vulnerable to the new G20 rules, Morningstar's Baker said. He estimates Wells Fargo may need to raise up to $30 billion, while JPMorgan...

Deutsche Bank, the giant German bank that has a big presence on Wall Street and is facing much regulatory scrutiny in the United States, on Wednesday warned that it expects to post a hefty loss in the third quarter. The bank, Germany’s largest, forecast a net loss of 6.2 billion euros, or nearly $7 billion, for the quarter. It comes just months into the tenure of Deutsche Bank’s new co-chief executive, John Cryan, who is trying to overhaul the institution. Along with the scandal and upheaval at Volkswagen, Deutsche’s struggles point to some of the weaknesses of Germany’s corporate culture....

“It’s ending purposeless, perpetual, global warfare, stupid.” Republican presidential contenders for 2016 should embrace that campaign theme to demolish the ultra-hawkish Hillary Clinton and her Napoleonic complex. Bill Clinton’s 1992 campaign theme, “It’s the economy, stupid,” is obsolete. Presidential strategists sermonize that voters are instinctively concerned more about jobs, mortgages, and health care than about national security policy. True enough. But that is because presidential aspirants have failed to discern and to explain the direct connection between, on the one hand, purposeless, perpetual, global warfare and the projection of military force everywhere that has created an exorbitant, inefficient, and corrupt...

A panel of regulators said on Friday that MetLife required heightened scrutiny by the Federal Reserve because of its size, leverage and interconnectedness with other financial institutions. “Material financial distress at MetLife could have significant adverse effects on a broad range of financial firms and financial markets,” the Financial Stability Oversight Council said in a 31-page statement explaining why it had voted 9 to 1 on Thursday to designate MetLife a “systemically important financial institution,” or SIFI. In such a situation, the market disruption could be severe enough “to inflict significant damage on the economy,” the council found. The council,...

At this point, the five largest banks account for 42 percent of all loans in the United States, and the six largest banks account for 67 percent of all assets in our financial system. The bets that I am most concerned about are known as “derivatives“.  In essence, they are bets about what will or will not happen in the future.  The big banks use very sophisticated algorithms that are supposed to help them be on the winning side of these bets the vast majority of the time, but these algorithms are not perfect.  The reason these algorithms are not perfect is because they...

...The decision on how much to pay claimants is being made by compensation expert Kenneth Feinberg. GM says the faulty switches are responsible for at least 54 crashes and more than 13 deaths.....

Liberals wanted a national enrollment system under Obamacare. They might just get it. Right now, 36 states rely on HealthCare.gov, the federal exchange, to enroll people in health coverage. At least two more states are opting in next year, with a few others likely to follow. Only two states are trying to get out. That’s precisely the opposite of the Affordable Care Act’s original intent: 50 exchanges run by 50 states. The federal option was supposed to be a limited and temporary fallback. But a shift to a bigger, more permanent Washington-controlled system is instead underway — without preparation, funding...

he Obama administration has quietly adjusted key provisions of its signature healthcare law to potentially make billions of additional taxpayer dollars available to the insurance industry if companies providing coverage through the Affordable Care Act lose money.. The move was buried in hundreds of pages of new regulations issued late last week. It comes as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall's congressional elections. Administration officials for months have denied charges by opponents that they plan...

Does IQ correlate with power? How many powerful people in the U.S. are actually geniuses, and how much does intelligence really affect success? In one of my research papers published last year, Investigating America's Elite, I set out to address these questions. I collected data on some key groups that greatly influence society: Fortune 500 CEOs, billionaires, federal judges, Senators, and House members. Individuals were deemed to be in the top 1% of ability if they attended an undergraduate or graduate school that had extremely high average standardized test scores that put the typical person well within the top 1%....

More than five years after the financial crisis struck, the biggest U.S. banks are better able to withstand a severe recession than at any time since the meltdown, the Federal Reserve has determined. Results of the Fed’s annual “stress tests” showed Thursday that all but one of 30 top banks passed muster with sufficient capital buffers to keep them lending through an economic crisis. Only Zions Bancorp fell short. The results showed continued improvement in banks’ financial positions since the 2008 crisis, the Fed said. That built on positive results from last year’s tests. “The industry is stronger and more...

Detroit was one of America’s great jewels. A center for industry, innovation, ingenuity, and the American can-do spirt. A shining example of the capitalist tide lifting all boats. Today, Detroit rests in shadow. It is a husk, a decaying testament to what can go wrong when government and bad policy intersect with bad business. What happened? Bankrupt is the new documentary that will lead you through the brambles and reveal what went wrong. What’s more, it answers the question of what there is to learn from the story of the rise and fall of America’s auto empire, and what it...

the bogey man known as “systemic risk” to gain advantage over the other creditors . ... In order for the OTC casino to work, the derivatives contracts had to be given special priority in bankruptcy. Speculative derivative instruments such as credit default swaps (CDS), which caused the failure and government bailout of American International Group, could never exist in significant size were in not for the safe harbor from bankruptcy for derivatives created by Congress in the 1980s and 1990s. Members of Congress from both parties were paid very well for their treachery. ... The intellectual author of the “systemic...

<p>The too big to fail banks have a larger share of the U.S. banking industry than they have ever had before. So if having banks that were too big to fail was a "problem" back in 2008, what is it today? As you will read about below, the total number of banks in the United States has fallen to a brand new all-time record low and that means that the health of the too big to fail banks is now more critical to our economy than ever. In 1985, there were more than 18,000 banks in the United States. Today, there are only 6,891 left, and that number continues to drop every single year. That means that more than 10,000 U.S. banks have gone out of existence since 1985. Meanwhile, the too big to fail banks just keep on getting even bigger. In fact, the six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger over the past five years. If even one of those banks collapses, it would be absolutely crippling to the U.S. economy. If several of them were to collapse at the same time, it could potentially plunge us into an economic depression unlike anything that this nation has ever seen before.</p>