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 Greece, Spain ‘in depression’: Nobel winner Stiglitz AFP - Greece and Spain are in “depression, not recession”, Nobel prize-winning economist Joseph Stiglitz said on Wednesday, blaming tough austerity measures for their downward economic spiral. Stiglitz also maintained that the International Monetary Fund was “a little too optimistic” in its forecast last week that the eurozone economy would shrink by 0.4 percent in 2012 and rise by 0.2 percent next year. “I’m more pessimistic than [...] 15 other Italian banks had their ratings cut amid fears over problem assets Standard and Poor’s has downgraded 15 of Italy’s biggest banks, and cut the ratings of 15 more. The credit ratings agency said today that Italy’s recession could potentially be deeper and more prolonged than previously thought. It said problem assets are mounting and that many banks have [...] Warren Buffett co-hosted Bloomberg TV’s “In the Loop” with Betty Liu this morning, where he discussed the U.S. economy, JPMorgan, Wells Fargo, Bank of America and other Berkshire Hathaway holdings. On JPMorgan, Buffett said, “I’ve had enough mistakes of my own that I’m very forgiving when something like that happens” and advice to Jamie Dimon is to “keep your head down.” Buffett said that Wells Fargo has “a sensational mortgage operation.”
Buffett went [...] Love them or hate them, Egan Jones is always about 1 month ahead of the other rating agencies. Spain has been weakened by the government deficit of 8.9%, the 24+% unemployment, the IIF’s recent estimate of additional bank loan losses up to EUR260B, and possible depositor withdrawals. Over the past three fiscal years (i.e., from 2008 to 2010), Spain’s GDP declined from EUR1.09 trillion to EUR1.07 trillion. Meanwhile, its debt mushroomed from EUR381B [...] From Bloomberg: The world’s richest people lost a combined $32.8 billion this week as concerns over a possible Greek exit from the euro area pushed the Standard & Poor’s 500 index to its biggest weekly loss since November 2011. Mexican Carlos Slim, 72, lost the most during the week, as shares of his Mexico City-based telecommunications company America Movil SAB fell 4.38 percent. Slim, who lost $4.1 billion, remains the world’s richest person [...] Spain is the new Greece. Portugal is going to debate this, as they’re banged up, but Spain is a unique disaster. The major issue is that no one cares about them. Sans development and tourism, which are in soliatry for a decade or so, you’ve got a paper bag full of water. Take a look thru the headlines in April of 2010, things were contained. We got confirmation Spain is a bag of [...] The Federal Reserve Bank released stress tests 2 days early, prompted by New York branch class A shareholder/director Jamie Dimon, who also happens to be the CEO of government-backstopped megabank, JP Morgan (JPM). Dimon announced an equity buy back plan for JP Morgan and a dividend hike, timed to counter the negative sentiment in financial equities that followed the mild Fed statement which implied a bit of a wait for further [...] If JPM, which just launched the financials earnings onslaught by first reporting Q4 results, is any indication, it will not be pretty for the financial sector which has seen dramatic moves higher in the past several weeks, because as Jamie Dimon says, Q4 was “Modestly Disappointing.” The reason: a top line miss, and a continuing contraction in capital markets leading to yet another decline in Investment Banking results. Also, what [...] Just a few headlines: ECB intervenes as Italian debt pressured (Reuters) – Countrywide Financial’s lawsuit losses could compel parent Bank of America Corp (BofA) (BAC.N) to put up the unit on the bankruptcy block, Bloomberg reported citing four people with knowledge of the firm’s strategy. The bankruptcy option exists because the bank maintained a separate legal identity for the subprime lender after buying it in 2008, said the people, who declined to be identified because the plans are [...] QE3 next month and the ECB buying up bonds in the euro zone, analysts at ING in Amsterdam have been asking if it is possible for a central bank to go bust. “With governments increasingly unable or unwilling to further stimulate the economy, eyes are turning to the central banks once again,” said Teunis Brosens, a senior economist at ING in notes sent to [...] The biggest global banks are cutting jobs at the fastest rate since 2008 as a weak U.S. economy squeezes revenue, regulators push firms to hold more capital and companies restructure businesses to improve profitability. The 50 largest banks, including HSBC Holdings Plc (HSBA), Credit Suisse Group AG (CSGN) and Bank of America Corp. (BAC), disclosed plans for almost 60,000 reductions since Jan. 1, according to company statements and data compiled by [...] by Tony Pallotta Summarizing Bank Earnings With Two Charts Now that the big banks have reported below are two charts that sum up how they are doing aside from the noise of “beating expectations.” Chart 1: Income before provisions for loan losses. The provision game is one way to “pad” earnings based on assumptions for future loan losses. By looking at income before provisions one gets a [...] Let’s say a new bank sells stock worth $10 million dollars. That is the bank’s money, its capital. Over time it takes in $100 million in deposits. This is a liability for the bank as it owes this money to the depositors any time they want it. The bank uses those deposits to make $100 million in loans. These loans are assets of the bank. The [...] by MacroStory JP Morgan Q1 2011 Earnings On the headline JP Morgan (JPM) beat with $1.28 versus estimates of $1.15 on EPS. Comparing Q1 2011 to Q1 2010 net revenues is down 8.8% while EPS is up 72%. Sounds OK unless you ask two very simple questions (1) what is the direction of income before provisions for loan losses and (2) what is the direction of asset prices. Question [...] by ZH But that’s ok- these banks will focus on funding US Treasury issuance first, ergo no need for more QE… Among some of the report findings, which will hardly be deemed shocking: Some stress tests should have higher capital hurdles by SaveCD From bankbryancave.com……interesting development FDIC Files Fourth Lawsuit Against Former Bank Directors and Officers The [...] CNN: 2011: Year of the bank run? Unconditionally guaranteeing bank deposits is just such a policy, in a country where loan losses made the banks insolvent, job loss left many taxpayers peniless and deposits now at least double annual economic output. And this time, given the unpopularity of bailouts and dysfunctional European politics, there is ample reason to fear the banking mess won’t so easily be swept aside. “Facing facts like [...] by MICHAEL TRIAN My experience in extending credit in business has taught me that when two companies merge, and one is a weak company, the merged entity becomes weak. I’ve seen this over and over again. We have a bankrupt account looking to merge with another company. Based on my experience we will not extend credit to the merged entity. There is almost nothing that the EU can do to assist Spain and [...] by LFM The typical pattern, bailed out banksters, too big to fails, real estate foreclosures, mass unemployment, deflation, QE, stimulus, rapidly rising inflation of essentials like food, shelter and fuel, debt, printing currency, bankster mega bonuses, QE2, austerity for the people, cuts, raising taxes, soaring inflation in countries not doing QE2 and eventually hyperinflation and currency collapse in countries that use QE2 printing presses, [...] (Reuters) – Loan losses at Chinese banks could mount as the country’s structural reforms accelerate, the central bank said on Friday. In its financial stability report for 2010, the People’s Bank of China also warned of a growing risk of asset bubbles and inflation. The bank reaffirmed its appropriately loose monetary policy stance and said it would deploy various fiscal and monetary tools to manage inflationary [...] The nation’s big banks have found the key to success while they wait for the economy to recover: aggressive trading of investments including bonds, currencies and commodities. But they may also be heading toward making money on loans again. The big banks that have released earnings over the past week all reported improvements in their consumer loan portfolios. Banking executives had been conservative about their views on the economy and predicting a [...] In 1999 they repealed Glass-Steagal which effectively allowed banks to reduce their capital reserve requirements. In plain english the repreal of Glass- Steagal allowed the banks to increase the creation of credit money to insane levels because real capital reserve requirements did not constrain the credit expansion. The banks loved this. They created liers loans and made credit very easy for all thus creating all kinds of new money out [...] We are at the early stages of a deflationary collapse! In 2008 the money supply was in free fall because defaults were destroying debt based money. The reason that defaults were destroying money is because that debt used as money had very little real collateral s when the borrower defaulted the collateral did not cover the loan so banks wrote off money. So alot went broke. Bear Stearns, then Lehmans [...] Taxpayers better put a stop to all this nosense..if not they will suffer more than ever Fannie Mae To ‘Significantly’ Increase Delinquent-Loan Purchases Fannie Mae (FNM) said it will “significantly” increase its purchase of loans from single-family mortgage-backed-securities tests that are at least four months delinquent. The announcement comes three weeks after Fannie and fellow mortgage financier Freddie Mac (FRE) said together they could buy nearly $200 billion of delinquent home [...] |
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