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The bridge of student loan debt leads to second bubble

May 11, 2013 By Leave a Comment
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  USA Today is reporting that a group of bankers are warning the Federal Reserve of the $1 trillion student loan debt crisis having parallels to the housing fiasco of 2007-2008. The student loan debt is larger than the nation's outstanding credit card debt. This poses another problem for the Federal Reserve, but our mentality is debt our way to prosperity. Our children are being sold debt as a way to pay for college when savings and some financing should be a mixture to insure the yolk of debt will not destroy a generation. As a fortunate, college was paid in full and student loans were not as common 20 years ago as today. It is a hard concept to grasp the college graduates of this era with the burdensome yolk of debt as the option to pay for college. If we as a nation change our attitude, schools, parents, and the financial system could work to instruct financial literacy for our children to teach them to save and understand debt. In our free society, the concept of the status … [Read more...]

Filed Under: Donny Wise Live in Personal Finance, PERSONAL FINANCE NEWS, Real Time News Tagged With: , , , , , , , , ,

Community Banking’s Future is perfect example of regulatory disconnect to the real economy

September 9, 2012 By Leave a Comment

  The widespread driver of wealth in communities both large and small in the United States in the post war period of 1945 were the community banking system.  The role of community bankers has evolved over the last 30 years, but the current day community banker has 8% of total assets but origination of 40% of all small business loans in America. (TBC) The Future Of Community Banking By John Slater  |  Market Overview  |  Aug 21, 2012 03:55PM GMT  |  Add a Comment In a recent announcement, First Virginia Community Bank announced the acquisition of First Commonwealth Bank, a small de novo bank started in 2009. The transaction is pending regulatory approval and will be treated as stock-for-stock as the value-to-book is about 97%. That will become a common trend over the next three to five years as Wall Street projects that some 20% to 30% of banks will be merged before it's all done. Why Is This Typical Of What The Future Holds? First, the constant … [Read more...]

Filed Under: PERSONAL FINANCE NEWS Tagged With: , , , , , , ,

Bank profits, gas prices, and gold prices pose bad news for the American economy

August 31, 2012 By 1 Comment
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  MarketWatch  is reporting bank profits are recovering since the depths of the economic crisis in 2008, but loans are not showing signs of recovering in coordination with profitability. MarketWatch does give an example of graphs in relation to bank profitability and loan growth. The banks are not focusing in providing financing in the communities as day trading and buying government debt is more lucrative and profitable in relation to personal consumer loans. The return of investment is much greater for the better even though the risk factor is a systemic danger to the larger banks who are participating in this practice. In other economic news, gas prices are skyrocketing through the roof in lieu of Hurricane Issac forcing refinery capabilities to be shut down putting  more pressure on the price at the pump. MarketWatch states that gas prices are the highest this Labor Day in recorded history. That shows the state of the price situation at the gas tank. How can any … [Read more...]

Filed Under: PERSONAL FINANCE NEWS Tagged With: , , , , , , ,

Getting Banks Back Into Banking

April 25, 2012 By Leave a Comment

  http://wallstreetpit.com/91428-getting-banks-back-into-banking Getting Banks Back Into Banking Banks used to be in the business of gathering deposits and making loans. Today, they are in the business of gathering fees and making trades. Being an American banker today means living under the thumb of regulators who demand that you lend money at extremely low interest rates, while trying to avoid making bad loans that would reduce your capital and potentially require a federal bailout. The bigger the bank, the greater the pressure. In this environment, depositors are a nuisance unless you can extract hefty fees from them. You have to track their money and hold part of it in cash so you can meet withdrawal demands, and you can’t lend most of the rest at very high rates anyway. When you do lend money, you must generate reams of paperwork to satisfy your examiners. If things go badly for borrowers, you can expect to be accused of “predatory” lending. And if you … [Read more...]

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Banker’s Choice: Traditional Bank or Independent Entity

March 28, 2012 By 1 Comment

Banker's Choice: Traditional Bank or Independent Entity The banking system has gone through a metamorphosis over the last two decades. The consequence of deregulation is supranational banking entities that have footprints in multiple markets or across all fifty states, and business segments are expansive outside the traditional bank business. This expansion of the banking entities outside a geographical location and outside the traditional consumer banking role has reallocated the priorities of selective institutions away from the traditional banking role in the community as a safe haven to deposit monies and obtain loans. This decision of the banking industry to shift primary business focus on business segments not related to traditional banking business is having unintended consequences to the communities served. Several consequences include collapse in small business innovation,  robust savings and credit products beneficial to the consumer, and the financial health of the … [Read more...]

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Debt Situation in US- Is there an escape route?

March 27, 2012 By 1 Comment

Debt situation in US – Is there an escape route? By Grace Ruskin - Contributor The year 2012 is pitched to be an important year in US political scenario as well as economic one. Since the Presidential elections are scheduled to be held in November, the political decisions that will affect the economy need to be taken carefully. Dealing with government debt is not as easy as when you pay off debt with the help of debt relief services. Monetary policy can be called the great enabler which the central banks use in order to keep the interest rates at as low a level as possible for over a number of years. This has encouraged the politician to believe that sovereign debt is a lot cheaper than what it really is. David Stockman, the former Director of the Office of Management and Budget said that the politicians are not ready to take the tough steps that can impose pain, austerity and tough tradeoffs which are required to control this. However, things are changing in the current … [Read more...]

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Yahoo Fantasy Finance and Federal Reserve Bank similar

March 17, 2012 By Leave a Comment
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Early Saturday morning, I am online playing Yahoo Fantasy Finance. I make the best investment decisions when using fake money, and I am in the top 4% ranking of all players for the week and top 10% since inception. My portfolio is up 10%, and I am gaining respect. The Finance Fantasy is a little intoxicating to have zero risks and still be a winner. The Federal Reserve operates under a similar structure of zero risk and still a winner. In this comparison, Federal Reserve employee ( with access) clicks twice to create play money from thin air. The employee is able to facilitate the disbursement to the appropriate party. The employee is holding an important role, and  the employee does his job well. The employee gains respect for success among his colleagues and outside the Federal Reserve.  The recognition  and importance is intoxicating. The employee has zero risk to personal fortunes in the risk taking in performing his job. Zero risk is using the play money of the Federal … [Read more...]

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JP Morgan’s announcement boost bank stocks

March 14, 2012 By Leave a Comment

JP Morgan Chase (NYSE: JPM) made the last hour of trading even hotter with the bank's dividend and buyback announcement. The Federal Reserve gave the US largest bank by assets the blessing to raise the dividend on the bank's stock by a nickel to 30 cents a share and allowing a plan buyback of $15 billion of its stock. This announcement was just before the Federal Reserve Bank's Stress Test release by the Federal Reserve Bank on 19 banking institutions, and the performance results were made public after the 4pm market close. The blessing by Federal Reserve was more good news for the markets as the Dow surged 218 points, and the NASDAQ closed above 3000. JP Morgan did lead the industry in announcing the increase on dividends paid to its shareholders.JP Morgan Chase was up 7% to 43.39 at close of business today.... However, many banks and financials were a benefactor on JP Morgan’s announcement late Tuesday. The following DC banking/financial institutions did see significant … [Read more...]

Filed Under: Examiner.com- DC Consumer and Banking Examiner Tagged With: , , , , , , , , ,

Foreclosure Resource via Federal Reserve

March 14, 2012 By 1 Comment
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Background The Federal Reserve Board issued enforcement actions against four large mortgage servicers --GMAC Mortgage, HSBC Finance Corporation, SunTrust Mortgage, and EMC Mortgage Corporation--in April 2011. Under those actions, the four servicers were required to retain independent consultants to review foreclosures that were initiated, pending, or completed during 2009 or 2010. The review is intended to determine if borrowers suffered financial harm directly resulting from errors, misrepresentations, or other deficiencies that may have occurred during the foreclosure process. The servicers are required to compensate borrowers for financial injury resulting from deficiencies in their foreclosure processes. If you had a mortgage loan on your primary residence and believe you were financially harmed during the mortgage foreclosure process by any of the four servicers in 2009 or 2010, you can request an independent review and potentially receive compensation. The four servicers … [Read more...]

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JP Morgan is Tuesday’s winner of Fed’s stress test

March 13, 2012 By Leave a Comment
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JP Morgan Chase (NYSE: JPM) made the last hour of trading even hotter with the bank's dividend and buyback announcement. The Federal Reserve gave the US largest bank by assets the blessing to raise the dividend on the bank's stock by a nickel to 30 cents a share and allowing a plan buyback of $15 billion of its stock. This announcement was just before the Federal Reserve Bank's Stress Test release by the Federal Reserve Bank on 19 banking institutions, and the performance results were made public after the 4pm market close. The blessing by Federal Reserve was more good news for the markets as the Dow surged 218 points, and the NASDAQ closed above 3000. JP Morgan did lead the industry in announcing the increase on dividends paid to its shareholders.JP Morgan Chase was up 7% to 43.39 at close of business today.... However, many banks and financials were a benefactor on JP Morgan’s announcement late Tuesday. The following DC banking/financial institutions did see significant gains in … [Read more...]

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