Free Republic

BY EDWARD LUCEA & KRISHNA GUHA Nationalisation, long regarded in Washington as a folly of Europeans, is gaining rapid ground among US opinion-formers. Stranger still, many of those talking about federal ownership of banks are Republicans. Lindsey Graham, the Republican senator for North Carolina, said that many of his colleagues, including John McCain, the defeated presidential candidate, agreed with his view that nationalisation of some banks should be “on the table”. Mr Graham said that people across the US accepted his argument that it was untenable to keep throwing good money after bad into institutions such as Citigroup and Bank...

A specter is haunting America — the specter of capitalism. From the boardrooms of failed bankers turned shameless mendicants, to the empty banter of the pundit class, even to that den of mediocrity called Capitol Hill, a voice long silenced is making itself heard, and not a moment too soon. But we always hear that capitalism has been tried and failed, that this recession demonstrates the irresponsibility of the laissez-faire Bush administration, and that what we need now is more, responsible government intervention. Where to begin? Well, a recent study by Walter Williams of George Mason University shows that between...

Graham: Ignoring possibility is irresponsible. Despite criticism from fellow Republicans, U.S. Sen. Lindsey Graham of South Carolina Monday defended his statement that the U.S. should consider nationalizing some banks. Critics, including the chairman of Charlotte-based Bank of America and many politicians, have slammed the idea. That doesn't bother the outspoken Graham. “Politicians are worried about words,” he said Monday. “I'm worried about outcomes.” Graham said the government has already poured billions into banks with little to show for the economy. Bank of America, which has received $45 billion in bailout money, is currently worth $27 billion in market capitalization. “The...

February 16, 2009, Alexandria, Va. – The National Credit Union Administration (NCUA) placed Center Valley Federal Credit Union of Wheeling, West Virginia, into liquidation Friday, February 13, 2009. The NCUA Asset Management and Assistance Center will issue checks to individuals once they have verified the balances in share accounts in the Center Valley Federal Credit Union. Through the NCUA National Credit Union Share Insurance Fund, credit union members’ deposits are insured to at least $250,000 on regular accounts and $250,000 on certain retirement accounts. NCUA made the decision to liquidate Center Valley Federal Credit Union and discontinue its independent operation...

Rep. Maxine Waters was lambasted as a left-wing radical last year when she raised the idea of nationalizing the oil industry. But on a Sunday morning talk show, a Republican senator came off even more supportive than her of nationalizing banks. “I would not take off the idea of nationalizing the banks,” Sen. Lindsey Graham (R-S.C.), said on ABC’s “This Week with George Stephanopoulos.” Graham, a confidant of former Republican presidential nominee Sen. John McCain (Ariz.), said that the problems in the economy and the financial sector are so severe that U.S. policy makers may have to start thinking about...

WASHINGTON, Feb 13 (Reuters) - U.S. bank regulators closed small banks in Florida, Illinois and Nebraska on Friday, bringing the number of bank failures to 12 so far this year. The Federal Deposit Insurance Corp said Riverside Bank of the Gulf Coast had $539 million in assets and $424 million in deposits. Its failure is expected to cost the deposit insurance fund an estimated $201.5 million. Riverside's deposits will be assumed by TIB Bank of Naples, Florida and Riverside's nine branches will reopen on Tuesday as branches of TIB. Corn Belt Bank and Trust Co of Pittsfield, Illinois had $271.8...

WASHINGTON (AP) — Regulators on Friday closed FirstBank Financial Services in Georgia and two California banks, Alliance Bank and County Bank, marking nine failures this year of federally insured institutions. The Federal Deposit Insurance Corp. was appointed receiver of the three banks. FirstBank Financial, based in McDonough, Ga., had $337 million in assets and $279 million in deposits as of Dec. 31. Alliance Bank, based in Culver City, Calif., had about $1.14 billion in assets and $951 million in deposits as of year's end. Merced, Calif.-based County Bank had around $1.7 billion in assets and $1.3 billion in deposits as...

Veteran banking analyst Richard Bove said Bank of America Corp (BAC.N) is not in danger of failure as the U.S. government is committed to keeping it in business, theflyonthewall.com reported Friday. Shares of the bank rose 10 percent to $5.32 in trading before the bell, after reports that Ladenburg Thalmann's Bove thought the stock was a "strong buy" on cash flow and asset value basis. Reuters could not immediately verify the report.

FirstBank Financial Services, McDonough, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Regions Bank, Birmingham, Alabama, to assume all of the deposits of FirstBank Financial Services. FirstBank's four offices will reopen on Monday as branches of Regions Bank. Depositors of FirstBank will automatically become depositors of Regions. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit...

BY GREG FARRELL and FRANCESCO GUERRARA New York. Bank of America played a role in Merrill Lynch’s controversial decision to pay $4bn in bonuses in December just as mounting losses were threatening to derail BofA’s takeover of the Wall Street firm, according to people close to the situation. BofA has said that the payment of $4bn in compensation in a fourth quarter in which Merrill racked up $15bn in losses was sanctioned by John Thain, Merrill’s chief executive. Ken Lewis, BofA’s embattled chief executive, ousted Mr Thain on Thursday after news of the bonus payments appeared in the Financial Times....

BY JOANNA SLATER As the British pound continues to sink, its travails are a cautionary tale for the U.S. dollar. The U.S. and the U.K. face very similar predicaments, from a deepening recession to a damaged financial system. Both are orchestrating massive bank bailouts and attempting to assist struggling homeowners. Both are ramping up government spending even as they rely on financing from overseas investors. And both countries have central banks that have slashed interest rates and opened the door to unconventional ways of stimulating the economy. Yet their currencies have headed in opposite directions. On Wednesday, the British pound...

European credit indices began on a weaker note on Wednesday morning - the day after US president Barack Obama’s inauguration - as fears of a worldwide recession mount. The new president’s inauguration speech yesterday did little to sooth nerves – the cost of buying credit protection for US government debt edged higher to 73.5bp this morning, compared to 71.8bp at the New York close, according to CMA. Last night’s announcement that the Bank of England will start buying billions of pounds in high quality corporate bonds to kickstart the economy has market participants pondering if such a move could be...

So markets now reckon the UK stands a one in ten chance of defaulting on its sovereign debt over the next half decade. That, at least, is what the credit default swap on British government securities tells us*. The CDSs are a measure of the amount investors are paying to insure against the likelihood of the UK defaulting. You have to take them with a pinch of salt, since they are a pretty illiquid and young market, but set against a rather terrifying backdrop they are telling us something profoundly alarming today. Britain's creditworthiness is crumbling.

Wells Fargo also will likely cut dividend to boost capital, analyst says BY ALISTAIR BARR SAN FRANCISCO (MarketWatch) — Bank of America Corp. needs more than $80 billion in new common equity capital to support the huge amount of assets on its balance sheet, an analyst said Tuesday. Friedman, Billings, Ramsey's Paul Miller also said Wells Fargo & Co. (NYSE:WFC) probably will have to cut its dividend soon as that bank tries to boost capital. Shares of Bank of America slumped 29% to close at $5.10 on Tuesday. That's the lowest level since late 1990. Wells Fargo lost 24% to...

Large financial institutions are expected to need more capital later this year. But after TARP money from the government runs out, where will the cash come from? BY DAVID ELLIS NEW YORK (CNNMoney.com) — Can anything satisfy banks' appetite for capital? Judging by the way things are going in the sector lately, the answer seems to be a resounding 'No.' Last week, the government allocated an additional $20 billion for the seemingly steady Bank of America (NYSE:BAC) to help the company close its acquisition of Merrill Lynch. BofA has now received $45 billion in government funds as part of the...

SAN FRANCISCO (MarketWatch) -- Berkeley, Ill.-based National Bank of Commerce was closed by regulators Friday, marking the first bank failure of 2009, the Federal Deposit Insurance Corporation said in a statement. Republic Bank of Chicago will assume all of National Bank of Commerce's deposits, while the two locations of National Bank of Commerce will reopen Saturday as branches of Republic Bank, the FDIC said.