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Economy
BofA CEO confirms government coerced him into Merrill deal
Bank of America CEO Ken Lewis is fighting to keep his job because earnings at his company have plummeted. BofA's acquisition of Merrill Lynch has been a large part of the problem. Now, understanding that he is being made out to be the fall…
Pre-payments are reducing value of mortgage-backed securities
If you read my recent post on How big banks earned so much money this quarter you would see that much of the income at Wells, JPMorgan, US Bank and others came from refinancing old mortgages. While this may be a boon to present income, it…
McCulley: We need the political will to socialize the losses
Paul McCulley of PIMCO made a few comments back in March which caught my attention. Given how well banks are doing this earnings season, I thought it relevant to quote him here. The essence of his remarks was this:
Deleveraging is a…
How big banks earned so much money this quarter
We are a few weeks into earnings season and it should be abundantly clear that financial institutions are firing on all cylinders. In fact, financials are leading the broader market for the first time since 1993. Yet, loan losses have…
Simon Johnson: Too big to fail is “too big to exist”
Simon Johnson, a former IMF Chief Economist, who blogs over at the Baseline Scenario, is testifying before Congress today about 'Too big to fail' financial institutions. Below is a video in which he tells Bloomberg his thoughts on the…
GM and Chrysler to get more bailout money
Apparently the Obama Administration was just bluffing about bankruptcy for the automakers, because when push came to shove, they blinked. The automakers are to get yet more bailout funds and the dates for restructuring plans hae been…
Britain gets deflation
An increasing number of countries are recording negative year-on-year inflation numbers. I reported first on Spain, then on Switzerland. Add the U.K. to the list as well.
Deflation returned to Britain for the first time in nearly five…
Meredith Whitney: Regardless of stress tests, banks will still need more capital
The Bloomberg video below makes it seem that Whitney believes the stress tests are a sham. She says the tests are a theoretical exercise whereby banks ask: "what will our earnings power be in two years after we sell off these 'toxic'…
FDIC moves in at Great Basin Bank
From the FDIC website. More information available here:
Great Basin Bank of Nevada, Elko, Nevada, was closed today by the Nevada Financial Institutions Division, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.…
FDIC Friday Night Special: American Sterling Bank
Small banks are going bust at a pretty good clip. Apparently, there is no free ride for the likes of American Sterling Bank. Its deposits were acquired by Metcalf Bank as the FDIC took it into receivership a.k.a nationalized it. But, of…