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Originally posted by Tentickles
Why trust a man who gutted a whole country to get a 3billion dollar profit?
Soros makes me sick.
Cape Fear Bank, Wilmington, North Carolina, was closed today by the North Carolina Office of Commissioner of Banks, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Federal Savings and Loan Association of Charleston (First Federal), Charleston, South Carolina, to assume all of the deposits of Cape Fear Bank.
Cape Fear Bank's eight offices will reopen on Monday as branches of First Federal. Depositors of Cape Fear Bank will automatically become depositors of First Federal. 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 insurance coverage. Customers of both banks should continue to use their existing branches until First Federal can fully integrate the deposit records of Cape Fear Bank.
Over the weekend, depositors of Cape Fear Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of March 31, 2009, Cape Fear Bank had total assets of approximately $492 million and total deposits of $403 million. In addition to assuming all of the deposits of the failed bank, First Federal agreed to purchase approximately $468 million in assets. The FDIC will retain the remaining assets for later disposition.
The FDIC and First Federal entered into a loss-share transaction on approximately $395 million of Cape Fear Bank's assets. First Federal will share with the FDIC in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers as they will maintain a banking relationship.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-866-806-6128. The phone number will be operational this evening until 9:00 p.m., EDT; on Saturday from 9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m., EDT; and thereafter from 8:00 a.m. to 8:00 p.m., EDT. Interested parties can also visit the FDIC's Web site
The Fed is already printing trillions of U.S. dollars and pumping them into the global economy in an effort to stave off a financial collapse. Now it plans to start injecting foreign currency, too, according to minutes recently released from its March meeting.
How the hell can the U.S. Fed do that? Glad you asked.
The Federal Reserve engages in so-called swaps with foreign countries, which we first reported here. It uses these swaps to pump hundreds of billions of dollars into foreign central banks while taking foreign currency in exchange.
The foreign central banks pass their new U.S. dollars to their foreign financial institutions, while the Fed has kept the foreign currency on its balance sheet and not injected it into the money supply.
Now, however, the Fed will be able to take the foreign currency it acquires in these swaps, and rather than hold it on its balance sheet, pass it on to U.S. banks, according to minutes from the Federal Open Market Committee's March meeting. These U.S. banks can then use that foreign currency to cover their foreign debts.
The Fed governors said, according to the meeting notes, that the measure was only precautionary: "There was no evidence that these institutions were encountering difficulty in meeting foreign currency obligations at this time, but these facilities would be available should pressures develop in the future."
The expanded effort is part of a Fed project that has been injecting hundreds of billions of dollars into foreign central banks over the last several months.
The committee notes say that the new program will "augment the existing network of central bank liquidity swap lines."
Agency Mortgage-Backed Securities Purchase Program
Purchases in agency MBS by investment managers acting as agents for the System Open Market Account (SOMA).
Purchases summarize all trades executed during the indicated period including purchases associated with dollar rolls.
Purchases executed during this period and prior periods, which have settled, will be reported on H.4.1: Factors Affecting Reserve Balances
Gross purchases from April 2 through April 8: $74,705 million
Net purchases from April 2 through April 8: $30,425 million
More good news, Tax receipts down 28% YoY
March 08 - 178,816
March 09 - 128,957
Originally posted by Vitchilo
Are those tax receipts the same as income tax? Tax receipts consists of what in particular? Wouldn't those losses be the ones that were already not bringing in much money anyway?
Just trying to understand here, but those numbers are quite something...
Originally posted by TH3ON3
Now Red says that the .gov is taking in less and less in tax revenue while spending more and more...
More at Link...
Seized credit union planned to understate loss
WASHINGTON (Reuters) - Senior managers at a major corporate credit union seized last month were preparing to report a credit loss significantly below what an external analysis had revealed, the U.S. regulator of credit unions said on Friday.
An external analysis by Western Corporate (WesCorp) Federal Credit Union resulted in a credit loss estimate more than $500 million greater than WesCorp's internal estimates, the credit union regulator said.
Senior managers at WesCorp were prepared to report an impairment figure for certain securities as of December 31 that was based on the lower internal estimate, the National Credit Union Administration said.
The credit union regulator seized WesCorp and U.S. Central Federal Credit Union on March 20 after stress tests revealed that losses on their soured mortgage-related investments had reached a critical stage.
U.S. Central, of Lenexa, Kansas, and WesCorp of San Dimas, California, were two of the largest corporate credit unions with a combined $61 billion of assets.
Corporate credit unions provide liquidity and settlement services to more than 90 percent of the nation's nearly 8,000 retail credit unions, which are member-owned and are considered cooperative entities, unlike banks.
NCUA Chairman Michael Fryzel said in a statement on Friday that liquidity remains stable in the corporate credit union system. But he said, "it is important credit unions continue to support liquidity in corporate credit unions to prevent the selling of distressed assets into the current dysfunctional market."
Fryzel told Reuters last month that managers at the seized credit unions were overly optimistic about the value of mortgage-backed securities they held.
"Some information was not as accurate as it could have been," Fryzel said about the institutions' asset valuations and loss figures. He also said the NCUA had not yet seen signs of fraud.
New Frontier Bank, Greeley, CO. fails; 23nd of year
FDIC Creates a Deposit Insurance National Bank to Facilitate the Resolution of New Frontier Bank, Greeley, Colorado
Bank of the West to Provide Temporary Operational Management
FOR IMMEDIATE RELEASE
April 10, 2009
David Barr (202) 898-6992
Cell: (703) 622-4790
New Frontier Bank, Greeley, Colorado, was closed today by the State Bank Commissioner, by Order of the Banking Board of the Colorado Division of Banking, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC created the Deposit Insurance National Bank of Greeley (DINB), which will remain open for approximately 30 days to allow depositors time to open accounts at other insured institutions. At the time of closing, the receiver immediately transferred to the DINB all insured deposits of New Frontier, except for brokered deposits, certificates of deposit (CDs) and individual retirement accounts (IRAs). The receiver also transferred to the DINB all secured public unit deposits. Under the FDI Act, the FDIC may create a deposit insurance national bank to ensure that depositors have continued access to their insured funds where no other bank has agreed to assume the insured deposits.
Bank of the West, San Francisco, California, was contracted by the FDIC to provide operational management of the DINB. The main office and two branches of New Frontier will open on Monday, April 13, 2009. Banking activities, such as direct deposit and writing checks, ATM and debit cards, can continue normally for former customers of New Frontier during the 30-day transition period. It is also important to note that New Frontier official checks will continue to clear and will be issued to customers closing accounts.
All insured depositors of New Frontier are encouraged to transfer their insured funds to other banks. They may do so by asking their new bank to electronically transfer their deposits from the DINB or by writing checks for the amount in their accounts.
The FDIC will mail checks at the end of the transition period to the address of record for depositors who have not closed or transferred their accounts during the transition period.
Brokered deposits, CDs and IRAs are not a part of this transaction. The FDIC will mail checks to non-brokered deposit customers. The FDIC will pay the brokered deposits directly to the brokers for the amount of their insured funds. Customers with brokered deposits should contact their brokers directly for information concerning their money.
The FDIC created the DINB to permit uninterrupted service for customers with checking and NOW accounts. This arrangement allows for uninterrupted direct deposits and automated payments from customers' accounts and allows them time to find another institution with which to do business.
As of March 24, 2009, New Frontier had total assets of $2.0 billion and total deposits of about $1.5 billion. At the time of closing, there were approximately $150 million in insured deposits and $4 million in deposits that potentially exceeded the insurance limits. Uninsured deposits were not transferred to the DINB. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.
Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-800-830-4705 to set up an appointment to discuss their deposits. This phone number will be operational this evening until 9 p.m., MDT; on Saturday from 9 a.m. to 6 p.m., MDT; on Sunday from noon to 6 p.m., MDT; and thereafter from 8 a.m. to 8 p.m., MDT. Customers who would like more information on today's transaction should visit the FDIC's Web site at www.fdic.gov...
Beginning Monday, depositors of New Frontier with more than $250,000 at the bank may visit the FDIC's Web page "Is My Account Fully Insured?" at www2.fdic.gov... to determine their insurance coverage.
The FDIC as receiver will retain all the assets from New Frontier for later disposition. Loan customers should continue to make their payments as usual.
The cost to the FDIC's Deposit Insurance Fund is estimated to be $670 million. New Frontier is the twenty-third bank to fail this year and the second in Colorado. The last bank to be closed in the state was Colorado National Bank, Colorado Springs, on March 20, 2009.
Originally posted by projectvxn
Overseas Borrowers Sell Dollar Bonds at Record Yearly Pace
By John Detrixhe
April 10 (Bloomberg) -- South Korea and Hutchison Whampoa Ltd. led overseas borrowers offering $10 billion in dollar- denominated bonds this week, as foreign issuers sell debt in the U.S. at the fastest pace on record.
Overseas issuers sold $180 billion of debt in dollars this year, according to data compiled by Bloomberg. South Korea, Asia’s fourth-largest economy, sold its first dollar bonds in more than two years. Hong Kong-based Hutchison Whampoa, the operator of phone, ports, property, energy and retail businesses in 54 countries, sold $1.5 billion of 10-year notes in its first dollar-bond offering since 2003.
Foreign companies and governments, seeking to sell longer- dated maturities to a deeper pool of investors amid a global financial crisis, are issuing debt in dollars to repair their balance sheets and ensure liquidity, said James Merli, head of U.S. fixed-income syndicate at Barclays Capital in New York. Pacific Rim borrowers issued $7.3 billion of dollar debt this week, the region’s second-biggest week this year.
The article goes on to describe how profitable it is to buy and sell dollars essentially. But they are missing the point. People are selling their dollar denominated debt instruments because they are SCARED OF THE DOLLAR.
And the Fed can switch to fighting inflation all they want. They have already crossed the threshold. Especially since they decided to monetize another $1.15 trillion in debt. Who do these people think they are kidding?
From: Benjamin N. Dover III
Sent: Sunday, April 05, 2009 3:48 PM
Subject: Legacy Loans Program
I'm confident that I speak for most Americans when I note that the proposed PPIP is grossly unfair to the banks, investors and asset managers. This sweetheart deal for taxpayers would penalize banks for finding themselves in an unforeseeable predicament for which they bear no responsibility. It would also require selfless investors and asset managers to bear an unconscionable portion of the risk in return for minimal reward. If we're going to get through this crisis, everyone's going to have pitch
in and sacrifice -- and that includes the taxpayer.
So, unless you want the global financial system to be Lehmaned again, I suggest you change the terms of the program as follows:
1. Given that the underlying loans are sound, performing and cash flow positive, they should be priced at the banks' "mark-to-model" valuations plus, of course, a premium in order to induce the banks to make the sacrifice of parting with these valuable legacies. I suggest that market-driven price discovery occur in a range of 120-140% of par depending on the specific assets at issue.
2. The Government would put up 100% of the capital plus 100-1 leverage in the form of non-recourse financing funded by a combination of the FDIC fund for deposit protection and the Social Security endowment. (Medicare and Medicaid could also be asked to chip in as necessary -- I see no reason why the poor and elderly should not pay their fair share here).
3. Once bought, these assets would then be gifted to large hedge funds and private equity firms. In order to properly allocate risk, they would be forced to accept 100% of any profit and 0% of any loss. (And remember: hold your ground if the investors try to haggle over this.)
4. A small number of asset managers should be selected in secret to manage the assets in return for guaranteed fees to be paid by the Government. Typically, hedge funds are paid 2% of the value of the assets under management plus 20% any gains. That seems fair here. Because investors will be entitled to 100% of any gains, the Government will need
to come up with the extra 20% for the asset managers. (I suggest diminishing handouts to socialist programs like Head Start and AIDS-research organizations.)
5. Obviously, you'll need to guarantee all parties that in exchange for rescuing the taxpayer they won't be subject to any Government meddling before, during or after the transactions are completed. I suggest you lobby Congress to pass a law prohibiting it and all regulators (you too, Ms. Bair) from engaging in any interference or exercising any oversight over the program or the parties involved. In addition, Congress should grant a
pre-emptive amnesty and pardon to all parties for any wrongdoing that they later may be unfairly accused of in connection with the program. (Remember, contrary to what certain populist muckrakers may claim, "gaming the system" is just another word for "nothing to lose".) I hope it goes without saying that none of the fees or profits resulting from the
PPIP should be subject to any ordinary (much less special) taxes.
Finally, I think it would be appropriate for you, Mr. Geithner and Mr. Bernanke to send letters of gratitude to all parties involved for their generous effort to bail out the American taxpayer. Their magnanimity, propriety and responsible leadership during this crisis should be examples to every American.
Benjamin N. Dover III
Much more at Link...
The Incredibly Shrinking Market Liquidity, Or The Upcoming Black Swan Of Black Swans
"Anyone who is doing anything sensible right now is either losing money or is out of the market entirely." These are the words of a quant trader, who is seeing something scary in the capital markets. Scary enough to merit a warning that we could be on the verge of another October 87, August 2007, or January 2008.
In order to maintain market efficiency, the ecosystem has to be balanced: liquidity disruptions at any one level could and will lead to unexpected market aberrations, such as exorbitant bid/ask margins, inability to unwind large block positions, and last but not least, explosive volatility: in essence a recreation of the market conditions approximating the days of August 2007, the days post the Lehman collapse, the first November market low, the irrational exuberance of the post New Year rally, and the 666 market lows.
The above tracking charts indicate that something is very off with the "slow", "moderate" and "fast" liquidity providers, indicating that liquidity deleveraging is approaching (if not already is at) critical levels, as the vast majority of quants are either sitting on the sidelines, or are merely playing hot potato with each other (more on this also in a second). What this means is that marginal market participants, such as mutual and pension funds, and retail investors who are really just beneficiaries of the liquidity efficiency provided them by the higher-ups in the liquidity chain, are about to get a very rude awakening.
Key to note here is that Goldman's program trading principal to agency+customer facilitation ratio is a staggering 5x, which is multiples higher than both the second most active program trader and the average ratio of the NYSE, both at or below 1x. The implication is that Goldman Sachs, due to its preeminent position not only as one of the world's largest broker/dealers (pardon, Bank Holding Companies), but also as being on the top of the high-frequency trading/liquidity provision "food chain", trades much more often for its own (principal) benefit, likely in tandem with the other top dogs on the list: RenTec, Highbridge (JP Morgan), and GETCO. In this light, the program trading spike over the past week could be perceived as much more sinister. For conspiracy lovers, long searching for any circumstantial evidence to catch the mysterious "plunge protection team" in action, you should look no further than this.