Free Republic

Did you know that U.S. banks have more than 1.8 trillion dollars parked at the Federal Reserve and that the Fed is actually paying them not to lend that money to us? We were always told that the goal of quantitative easing was to "help the economy", but the truth is that the vast majority of the money that the Fed has created through quantitative easing has not even gotten into the system. Instead, most of it is sitting at the Fed slowly earning interest for the bankers. Back in October 2008, just as the last financial crisis was starting,...

Two Of China's Biggest Banks Have Stopped Lending At Some Of Their Branches Mamta BadkarJune 26,2013 Branches of Bank of China and the Industrial and Commercial Bank of China (ICBC) have stopped lending amid the country's current liquidity squeeze, according to Caixin Online. The two banks, are part of the country's Big Four. Bank of China was reportedly having a hard time meeting loan-to-deposit requirements before the liquidity squeeze and it plans to resume lending on July 15. Meanwhile, ICBC's headquarters set a cap on lending, but what was unusual was that "headquarters had cut down on the quotas to...

The Los Angeles Times is reporting that America's tire rental business is growing. Companies that previously specialized in rent-to-own wheels are now shifting their business to provide low-income drivers with rent-to-own tires. Customers can pay as little as $14 per month for new rubber, but may wind up paying as much as four times the retail price by the time all's said and done. While the first rent-to-own wheel and tire dealer surfaced in the mid '90s, the business has been expanding.

Radio Talk Show Host Charged with Mortgage Fraud Warren Ballentine, 41, Durham, North Carolina, and formerly of Country Club Hills, Illinois, a lawyer who hosts a national radio talk show, was indicted on federal charges for allegedly engaging in two mortgage fraud schemes that defrauded lenders of a total of approximately $9.7 million. The defendant allegedly schemed with others to obtain more than two dozen fraudulent mortgage loans and represented buyers at multiple closings, knowing that they were fraudulently qualified for loans to purchase homes in Chicago, Illinois, and various southern suburbs. Ballentine owns the Law Office of Warren Ballentine,...

The Consumer Financial Protection Bureau is planning a Thursday morning announcement of new lending rules that it hopes will move the mortgage market toward a sustainable middle ground, somewhere in between the free-wheeling days of no-documentation loans and the current, restrictive environment. For most borrowers, the rules will mean no more interest-only mortgages, no more loans where the principal due increases over time, no more loans that carry a balloon payment and no more loan terms of more than 30 years. In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for...

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring. Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in...

In advance of the U.S. bank stress test report on Thursday, the following story was released this morning about banks purchases of Treasury and related debt. March 12 (Bloomberg) — U.S. banks bought more government and related debt in the first two months of 2012 than they did in all of last year, an endorsement of Federal Reserve Chairman Ben S. Bernanke’s assessment of the economy that’s boosting demand for bonds even with yields near the lowest on record. This is an endorsement? What it says to me is that banks simply invested part of their staggering reserves in Treasuries...

A recent piece from Foreign Policy Journal’s Jeremy Hammond offers a rare analysis on how money is created in the nation’s financial system — and also why not to expect very much in the way of fiscal responsibility and spending cuts from Washington, D.C. any time soon. The issue boils down to capital requirements — how much a financial institution must hold in reserve versus how much it can lend. Say the capital requirement for a financial institution is 10 percent.Usually, one might think that means that for every dollar of capital, it can lend out 90 cents and 10...

Justice's New War Against Lenders The Obama administration repeats mistakes of the past by intimidating banks into lending to minority borrowers at below-market rates in the name of combatting discrimination. By MARY KISSEL Talk about not learning from past mistakes: A government department is again intimidating banks into lending to minority borrowers at below-market rates, all in the name of combating "discrimination." Welcome to the next housing mess. The 1990s may have brought us supercharged politicized lending, but Eric Holder's Department of Justice is taking the game to an entirely new level, and then some. The weapon is a "fair...

One of the most outrageous "open secrets" of U.S. government policy these days is that the Federal Reserve is still paying big banks not to lend money. And it's doing that while screwing average Americans who have been responsible and lived within their means. Huh? Seriously: The Federal Reserve is quietly continuing with one of the many outrageous bank-bailout programs it initiated during the financial crisis--the one in which it pays big banks interest on their "excess reserves." What are "excess reserves"? Money that the banks have but aren't lending out--money that banks are just keeping on deposit at the...

The Federal Reserve Board on Tuesday requested public comment on a proposed rule under Regulation Z that would require creditors to determine a consumer's ability to repay a mortgage before making the loan and would establish minimum mortgage underwriting standards. The revisions to the regulation, which implements the Truth in Lending Act (TILA), are being made pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposal would apply to ALL CONSUMER MORTGAGES(except home equity lines of credit, timeshare plans, reverse mortgages, or temporary loans).

The media is hyping and harping on the issue that the Federal Reserve will resort to PRINTING more money to feed another round of “quantitative easing.” This is a wholly incorrect fact. The Department of Treasury prints our "paper currency” NOT the Federal Reserve. “Quantitative easing” is the Federal Reserve increasing bank reserves- thereby creating new money electronically- but, for a stated purpose of “stimulating” the economy and NOT for paying government debt. This is a salient point that the media mixes up, assuming and misinforming the public that QE is paying for increased government debts. QE serves a fundamental...

"The Federal Reserve, amid persistent worries about Europe's sovereign debt crisis, last week quietly approved the extension of a crisis-lending program that allows the European Central Bank to tap the U.S. for dollars, Federal Reserve Bank of St. Louis President James Bullard said. The Fed's dollar-lending agreements with the ECB—as well as the central banks of England, Canada, Japan and Switzerland—were scheduled to expire Aug. 1. The Fed and other central banks haven't yet disclosed renewal of the agreements, known as swap lines..."

Financial stocks just caught fire. Someone must be getting bailed out, right? Why yes, say critics of the giant banks. They charge that Monday's rally-stoking mortgage-putback deal between Bank of America (BAC) and Fannie Mae and Freddie Mac is nothing more than a backdoor bailout of the nation's largest lender. It comes courtesy, they say, of an administration struggling to find a fix for the housing market while quaking at the prospect of another housing-fueled banking meltdown. Monday's arrangement, according to this view, will keep the banks standing -- but leave taxpayers on the hook for an even bigger tab...

Shadow Lending Hampers Beijing By DINNY MCMAHON BEIJING—Lending by lightly regulated financial companies outside China's formal banking system has ballooned this year, causing increasing headaches for the government in its efforts to manage the economy and control inflation, observers say. China's government has traditionally used its control of the largely state-owned banking sector to regulate the country's pace of economic growth, directing it to pump out cheap credit in good times and restricting the volume of new loans to prevent overheating. But controlling credit has become more difficult as the financial system gets more sophisticated, analysts say, complicating Beijing's efforts...

The Federal Reserve’s open-market committee (FOMC) is widely expected to try a second dose of “quantitative easing” when they meet again in early November. Dozens of financial reporters have described this as an effort to “goose” the economy, but how that is supposed to work is even more unclear than usual. Talk of “quantitative” easing makes it sound as if there will be a larger quantity of credit available to somebody somewhere. But the Fed is offering more credit only to Fannie Mae, Freddie Mac, and the U.S. Treasury. This may be terrific for lobbyists on K Street in D.C.,...

WASHINGTON (AP) -- Scoring a prized political victory five weeks before the Nov. 2 elections, President Barack Obama on Monday signed a bill to help small businesses expand and hire by cutting their taxes and creating a $30 billion loan fund. Obama said the incentives will help small businesses right away. But any hiring may not be enough to help some Democrats ahead of crucial midterm elections in which voters are expected to vent their frustrations over a slow-growing economy and near-10 percent unemployment. The bill had been delayed for months, blocked in the Senate by Republicans. Most in the...

Shirley Davis, a 66-year-old retired phone-company administrator who lives in Brooklyn, N.Y., is more than $33,000 in debt, earns just $2,414 a month and filed for bankruptcy in June. Shortly before that, she ripped open an envelope from Capital One Financial Corp., which pitched her a credit card even though it sued her in 2006 to recover $4,470 she owed on a different card from the bank.

Despite constant urging by Washington for banks to increase their lending, credit conditions remain tight. Small-business lending continues to lag, and credit card issuers have slashed credit lines and canceled thousands of accounts. Just before Memorial Day, the Obama administration unveiled its latest effort to jump-start lending, a new Small Business Lending Fund (SBLF), which will make available $30 billion to community banks to promote small-business lending. The proposal already has cleared the House Financial Services Committee. But is there any reason to believe that this modest investment will do what the hundreds of billions of Troubled Asset Relief Program...

Explaining the global finance situation.