What do you do for $:Fed reveals partial data on emergency lending facilities, still mum on discount window
Update: Well, it would appear absolutely EVERYONE got a bailout except the middle class. And I do mean everyone.
Zero Hedge breaks down the 35 foreign banks that the Fed bailed out here.
…$1.27 trillion in agency MBS was traded by foreign banks…
led by the $410 billion by German-based Deutsche Bank ..
…the $382 billion by the Switzerland-based Credit Suisse.
Other highlights of the disclosure include that GE among other commercial endeavors got $ from the Fed, and that the Fed has essentially been taking all the polluted assets from everyone with a pulse (again, except for the US middle class consumer/homeowner who has been lectured about ‘moral hazard’ and whose house has been foreclosed upon):
.the Federal Reserve purchased $1.25 trillion in agency MBS from all participating banks.
Goldman Sachs borrowed 84 times from Fed’s dealer facility (PDCF) from Sept. 15 to 11/26/08 for amounts ranging from $100m to $8b
Bank of America borrowed 118 times from the PDCF from Sept 18 2008 to May 2009, in amount ranging from $375 million to $11 billion.
And even CA Pension funds got in on the bail out action, per ZeroHedge:
Looking at the TALF data, we see that the biggest borrower by subscription is Calpers, with a total of about $5.4 billion
Federal Reserve data breakdown and press release here. More from WSJ here
…The data released Wednesday include short-term liquidity moves for financial institutions and companies made as part of the Fed’s traditional role as lender of last resort, liquidity injections directly to borrowers and investors in key credit markets and financial support for Bear Stearns Cos. and American International Group Inc. (See all the data from the Fed)
Fed officials reported details on more than 21,000 transactions from December 2007 to July 2010. The emergency programs caused the size of the Fed’s balance sheet to swell. (See a history of the Fed’s lending)…
Video: Chris Whalen – more on MBS FraudGate, Pension Fund suits, Securities Law and the markets need to restructure these TBTF banks
The risks are high, and Mr Market is asleep, methinks that Uncle Sam has given the TBTF the all clear, leaving taxpayers holding the bag, again.
Courtesy of Market-Ticker:
“This is cancer – this isn’t a sudden crisis that is going to erupt out of the ground.”
“We’re going to wait until well-into this, and then we’re going to do the right thing – which is restructuring.”
“MBS…. are calling their lawyers. Trustees may or may not have the note.”
“There are a lot of investors out there who don’t know what they own… they may own unsecured loans….. trustees that were supposed to do things under state law (and didn’t)… even Fannie and Freddie have issues with this.”
“…. this is not minutia; this is the letter of the law.”
“The dealer has to deliver to the trustee the notes (under NY State Law)”
Financial collapse and housing: WaMu execs testify before Senate
Update: CSPAN3 livestreaming the hearing here
The Senate seems to have quite a bit of evidence suggesting the WaMu team deliberately securitized bad bad bad loans as ‘great!’ loans..
WSJ live blogging it here
“The worst managed business I had seen in my career.” That is how Washington Mutual’s former president described his company’s home loan division.
The mortgage lending practices at the Seattle thrift take center stage at a Senate hearing this morning.
The Senate Permanent Subcommittee on Investigations says WaMu did little to stop the loan fraud and generally risky and highly defective securitization practices in its mortgage businessWaMu’s defense? Former CEO Kerry Killinger says he reigned in his company’s mortgage business and blames his thrift’s collapse on unfair and biased regulators who were willing to save Wall Street firms, but not his own
- 7:11 am
- by Michael Corkery
- Add a Comment
Levin: Killinger made $11 million to $20 million a year, from 2003 to 2007. He was paid $25 million when he stepped down in 2008, as his thrift was going down the tubes. Killinger may have complained about not being part of the Wall Street club (see earlier Deal Journal post). But he sure was paid like one of club.
Update: Market Roundup: House vote on Financial Regulatory Reform Bill today, GE gets an exemption, Geithner wants to exempt TARP 2 from restrictions and Geithner pushing BofA and CITI to payback TARP over objections of FDIC…
Update 2: It’s up on the newslinkys now:
Conyers/Turner/Lofgren/Marshall/Waters/Cohen/Miller (NC)/ Delahunt/Nadler/Fudge Amendment #201 (Defeated 241-188)Revised: Would allow bankruptcy courts to extend repayment periods, reduce excessive interest rates and fees, and adjust the principal balance of the mortgage to a home’s fair market value as necessary to prevent foreclosure and revised to allow the VA, FHA, and RHS to take steps to facilitate mortgage modifications. The amendment is substantively identical to title I, subtitle A and sections 121-123 of subtitle B of H.R. 1106 Helping Families Save Their Homes Act of 2009), which passed the House on March 5, 2009. (See related story)
Update: 1:25 pm EST: The DEMOCRATICALLY CONTROLLED HOUSE has just rejected the Amendment to the Financial Regulatory Reform Bill that would have allowed bankruptcy judges to ‘cramdown’ mortgages. This after we learned yesterday that of a pool of 3 MILLION delinquent homeowners (which is now up to 4.8 million BTW), Treasury/HUD have managed to get the banks to permanently modify 31,000, yes that’s thousand. After that EPIC FAIL I became a SUPPORTER of this Amendment. It is not the BANKS holding these loans anymore peeps!! It is FAN FRED FHA!!!!
That being the case as taxpayers we will take a hit when those loans go to short sale and some investor makes a profit, WE will be bailing out FAN FRED (again) and FHA. Why wouldn’t we just buy the damned bad loans oh yeah that was what Paulson SAID he was gonna do with TARP.
Now WE the taxpayer guaranteeing FAN FRED FHA OWN these loans ALREADY. Why the hell arent we writing them down and taking the hit ONCE. Instead the homeowners get kicked out, it gets sold for less then the mortgage and we STILL give FAN FRED FHA the bailout for the loss. And now some investor with FREE money from the FED has the house and will dump it on the market in another bubble like the one they made that started this mess.
And Tim wants TARP II. But no cramdown. And they think they are ‘progressive’, they say they are Democrats. Obama’s Treasury didn;t want it, therefore it didnt happen, This is Unbelievable.
This despite that IDENTICAL legislation had already PASSED the House once before and died in the Senate. Could not be more clear they are leaving the homeowners out to dry.
And everyone who lives near or is family with or sells goods to those homeowners. We are ALL gonna pay when people keep walking on these loans and getting foreclosed on, we will have ENDLESS bailouts of FAN FRED FHA as those homes are sold and resold in new bubbles and everyone makes a bundle but the taxpers and families who lose their homes. Utterly disgusting.
Vodpod videos no longer available.
Should BofA and CITI be allowed to leave TARP? Will they be back like a bad penny?
Look for the cramdown/judicial mod amendment action also. Since Treasury and the banks managed only 31,000 mods out of 3 MILLION loans I now support it, frak ’em.
FINAL RULE ON THE REFORM BILL, including a summary of all 36 amendments made in order by the Rules Committee. Some got votes Thursday night, others will come today. Final passage is expected sometime around noon.
BILL HAS LOOPHOLES, report WSJ’s Damian Paletta and David Enrich, “Buried in a 239-page amendment to the U.S. House of Representatives’ financial regulatory overhaul is a provision that appears to do just one thing: exempts financial-services company USAA from some of the bill’s tougher provisions. The carve-out is one of a number of exceptions that allow companies to avoid fresh scrutiny envisioned by the White House, which is aiming to overhaul the nation’s financial-regulatory apparatus. The beneficiaries run from corporations such as General Electric Co. and Pitney Bowes Inc. to USAA, which caters to members of the military and their families, to so-called fraternal benefit societies.”
Geithner has learned NOTHING from the disasterous capital infusions into the big banks in TARP ROUND ONE. Now in Son of TARP he wants to EXEMPT everyone from the Feinberg pay czar that they installed to curb populist anger that THEY stoked in the first place!!! Which I agree was a stupid stupid limitation but CONGRESS did it, they will do it AGAIN. He cannot protect them. Who believes Congress will not arbitrarily add requirements later?
AND still no word on what the hexx they plan to do about HOUSING which was the FIRST thing named in TARP legislation…purpose was to address foreclosures and stabilize markets.:
WAPO REPORTS POSSIBLE SMALL BIZ TARP — by David Cho, A1, 2 column lead: “The Obama administration plans to channel money from the government’s massive financial bailout program to small businesses as part of an effort to limit the political and economic damage of high unemployment. One plan under consideration involves spinning off a new entity from [TARP] that would give banks access to federal funds without restrictions, including limits on executive pay, as long as the money was used to support loans to small businesses. … As an alternative, officials are prepared to ask Congress to modify TARP itself, easing the pay limits and other restrictions that would be imposed on small-business lenders taking the money, the sources said … Since the summer, the administration has been facing an uncomfortable dynamic in the economy. The ranks of the jobless have been growing, while big financial firms that got taxpayer bailout money have been thriving. In response, officials have been trying to recast TARP as aid for Main Street rather than Wall Street.”
GEITHNER SAYS SMALL BANKS WORRY OF TARP TAINT, reports FT’s Tom Braithwaite: “Tim Geithner, US Treasury secretary, on Thursday advocated exempting small businesses from restrictions attached to the bank bail-out program that Goldman Sachs , Citigroup and other large banks have been anxious to escape. In testimony to the Congressional Oversight Panel, Mr. Geithner said small banks were worried about being ‘stigmatized’ for asking for money from [TARP] and that this was exacerbating a credit crunch for their small business customers. They don’t want to come to do business with the government. ‘They think it’s a sign of weakness, not strength.’”
Geithner also pushed BofA and is pushing CITI paybacks of TARP, IMO to justify TARP 2: The Revenge of TARP!!!, over the objections of the FDIC. As originally reported by Andrew Ross Sorkin in the NYT. In the TARP C.O.P. questioning yesterday Geithner did not deny this. This morning a guest on CNBC noted this is a serious problem. We will post the video. FD: We are BofA/Merrill shareholders and have discussed this ad nauseum here on the site.
Market Mover Tuesday: 3Q GDP revision, Case Shiller Home Price Index, Consumer Confidence, FDIC bank update & Fed Meeting Minutes
Update: Here we go, 3Q GDP first revision is 2.8% (from original read of 3.5%) Consumer spending revised down to 2.9 from 3.4, final sales up 1.9 vs 2.5..When you strip out govt spending looks like this GDP would have been negative…
Heavy day for data:
…Tuesday’s calendar is heavy on news about housing and the consumer, plus there is the revision to third quarter GDP. The Fed’s Nov. 4 meeting minutes are released at 2 p.m. and the FDIC gives an update on banks and bank earnings. There is an auction of $42 billion in 5-year notes at 1 p.m.
Fed minutes are being watched carefully both for an economic update and any inkling of what Fed policy makers are thinking about what could trigger a move in rates. The Fed’s last statement signaled the market that there are no changes coming from the Fed any time soon, which is conducive to the risk rally.
The S&P/Case Shiller home price survey is released at 9 a.m. while consumer confidence is reported at 10 a.m. GDP is released at 8:30 a.m.Economists expect to see GDP revised to show growth of 2.8 percent, down from the initial reading of 3.5 percent. LaVorgna’s estimate is for 3 percent. “I’ve got a downward revision, largely on the back of softer construction spending and a wider trade deficit,” said LaVorgna. He said one wild card that could add to the number is capital spending, which was surprisingly weak in the first report.
“The other thing you want to look for is we get the first read of economy wide corporate profits. In the first half of the year, corporate profits grew at a nearly 20 percent annualized rate. I think you’re going to see a pretty good corporate profit number based on the fact that nominal GDP went positive,” he said.
Traders are split about how long the tightly linked risk trade will work. Steve Massocca, managing director at Wedbush Securities, said Monday that he’s hedging his bet and is beginning to short assets that benefit from the trade.
Sounds like the love affair the markets are having with the weak dollar is winding down (Thank Gawd)…
“The dollar is getting close to 2008 lows, and it could start to become bad news, and you have to prepare for it,” he said. “We haven’t taken the plunge yet but we’re starting to nibble on the idea that the dollar going down is no longer going to create levity.”...
Update: Anyone? Bueller? Market Mover Monday: Smoot-Hawley rises from the grave and TOTUS to ‘admonish’ and ‘push’ for his regulatory scheme today…
Update 2: BWAAAHAA!!! Bob Pisani of CNBC says the traders have been passing around the Ben Stein Smoot Hawley Tariff scene from Ferris Bueller on the floor this morning!! lol..
Update: OMG in his opening remarks TOTUS recognizes Barney Frank D-MA as the man who will be instrumental in leading our financial policies and regulatory reforms. OH NOES! The guy who gave FAN FRED a pass?
He mentions Paul Volcker (who seems to serve primarily as TOTUS’ figurative crucifix against the vampires of reality who note TOTUS is fumbling the economy and implementing disastrous policies) Why does Volcker let himself be used this way? Sad. TOTUS is touting him as the CHIEF of his council of something or other, and we all KNOW Volcker is being ignored..Our previous posts on Volcker here. And here is one of interest concerning his speech in February wherein he said ‘MOST aspects of capitalism will survive’.
Apparently no one ever told TOTUS you don’t start a land war with Asia and you don’t start a trade war with your banker..
TOTUS’ decision to put a tariff on Chinese Tire imports is well..untimely…to say the least. Timmeh Geithner just got back from another round of promising China we would restrain our deficit (AS IF!) and now here is TOTUS starting a trade war. At whose behest?? LABOR OF COURSE!!! Good grief! Our previous post on Smoot Hawley here
…China indicated Sunday it would restrict U.S. imports of chicken and auto products after Washington’s move to slap punitive sanctions on Chinese tire imports, raising tensions in a trade dispute ahead of two planned meetings between the countries’ leaders.
Citing a jump in Chinese imports, the Obama administration said Friday it would impose stiff tariffs on Chinese-made tires for the next three years, invoking a section of trade law that China agreed to as a condition for its joining the World Trade Organization in 2001. The move essentially would cut off the source of nearly 17% of all tires sold in the U.S. last year and hit cost-conscious consumers particularly hard, as retailers will have to find alternative sources for the lower-end tires that make up much of what China sends to the U.S….
And just to follow up, TOTUS will come on down to Wall St to give another lecture and remind everyone that they are bad bad people. Despite Sheila Bair’s resistance, TOTUS is leaning HARD on FDIC and SEC to give Treasury and the Fed expanded powers..
President Barack Obama, speaking on Wall Street Monday on the first anniversary of the crescendo of the financial crisis, will discuss the administration’s plans “to wind down government involvement in the financial sector,” will push for “immediate action” on regulatory changes need to prevent future crises and admonish Wall Street to avoid the practices that led to the crisis, an administration official said. The president’s remarks, follow similar comments from the Treasury and Federal Reserve aimed at blunting criticism that they lack an “exit strategy” for withdrawing their support for the financial system with speeches and documents timed for the first anniversary of the worst moments of the crisis.
More after the break:
Updated: Regulators won’t back down…Tiny Tim curses out Sheila Bair and Mary Schapiro…
Update from MM The regulators aren’t backing down. Excellent.
…Reuters sheds more light on the turf battle between Geithner/Emanuel and the regulators:
Top U.S. bank regulators will speak out on Tuesday against some key elements of the Obama administration’s plan to reshape financial regulation, saying parts of it were unneeded or could be disruptive.
The officials’ defiance, in prepared congressional testimony obtained by Reuters, came despite a warning given to them on Friday by Treasury Secretary Timothy Geithner.
In private remarks punctuated with expletives, Geithner urged the regulators to end their turf battles and show support for President Barack Obama’s plan, according to a person familiar with the situation on Monday.
But that seemed to have little impact on John Bowman, acting director of the Office of Thrift Supervision (OTS), an agency slated for closure under the Obama plan.
“We do not support the administration’s proposal to establish a new agency, the National Bank Supervisor (NBS), by eliminating the Office of the Comptroller of the Currency … and the OTS,” Bowman said in written remarks to be given to the Senate Banking Committee at a hearing…
Since Sheila as head of FDIC, won’t just GIVE away the regulatory power to Treasury, Timmeh is mad mad mad. No doubt he stomped his foot, making him look even more like Rumpelstiltskin were that possible….
By dequalss
Timmeh and Larry Summers together are like the Hot and Cold Misers..seriously, look at the faces…then add the personalities…
Treasury Secretary Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration’s faltering plan to overhaul U.S. financial regulation, according to people familiar with the meeting….Mr. Geithner told the regulators Friday that “enough is enough,” said one person familiar with the meeting. Mr. Geithner said regulators had been given a chance to air their concerns, but that it was time to stop, this person said.
Among those gathered in the Treasury conference room were Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro and Federal Deposit Insurance Corp. Chairman Sheila Bair.
Friday’s roughly hourlong meeting was described as unusual, not only because of Mr. Geithner’s repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House. Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.
Mr. Geithner, without singling out officials, raised concerns about regulators who questioned the wisdom of giving the Federal Reserve more power to oversee the financial system. Ms. Schapiro and Ms. Bair, among others, have argued that more authority should be shared among a council of regulators.
Well, gee since only Ben, Tim, Mary and Sheila were in the room, and the argument is that Ben should get more power which Mary and Sheila are resisting, clearly he can only have been cursing and threatening Mary and Sheila…just like his boss, he has an issue with powerful women who get in his way…..frakker…It’s kind of TOTUS’ karma ain’t it? Everywhere he turns middle aged women are in his way….I’ve got news for them, Sheila is one tough ‘cookie’ she isn’t rolling over for anyone…heh..
Shorter Timmeh/Rumpelstiltskin “If I say we can turn this damned straw into gold then we can!”
Hey I tried not to make elf comparisons and then People mag named him and I kid you not, one of the sexiest men of the year. Well alrighty then…guess they haven’t seen any CW shows last season….
See MM for more coverage…
Johnny Cash courtesy of askeboy
Moderate in the Middle 