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...]
Yahoo Fantasy Finance and Federal Reserve Bank similar
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...]
JP Morgan’s announcement boost bank stocks
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...]
JP Morgan is Tuesday’s winner of Fed’s stress test
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...]
Citigroup, SunTrust, and Ally Bank fail Federal Reserve’s stress test criteria
Citigroup(C), SunTrust (STI), and Ally Bank did fail the minimum tier one capital ratios of 5% under the Federal Reserve Bank's Stress Tests. The projection was Citigroup to be a winner in the latest round of stress, but 19 institutions were subject to the Fed's Stress Test. Citigroup tier one capital ratio was calculated at 4.9% or under the minimum 5.0%. The capital ratios of all 19 institutions are included below with a link to the Federal Reserve's press release. Citigroup (C) stock was off almost 4% in after hours trading. Dow Jones 13,177.68 1.68% S&P 500 1,395.95 1.81% Financial 2.99% C 36.45 6.30% Citigroup Inc. (NYSE:C) 36.45 Citigroup Inc. (NYSE:C) +2.16 (6.30%) After Hours: 35.01 -1.44 (-3.95%) Mar 13, 5:36PM EDT NYSE real-time data - Disclaimer Currency in USD 1ST Number Minimum stressed ratios assuming no capital actions after Q1 … [Read more...]
Inside Banking: DC Banks earnings, FHFA reconsideration, and Shareholders first
Donny Wise: DC Consumer Banking: Examiner.com - The health of the banking industry is at the forefront in the consideration of a sustainable economic recovery. In addition, the health of the industry can be measured through performance, market indicators including foreclosures and housing, and corporate responsibility of banks to implement business models and strategies to foster a safe and prepared industry. The local indicator in DC banking is the recent report in the Washington Business Journals stating that earnings were up for the 40 local banks in the fourth quarter of 2011. The market indicator is the recent urgent request by lawmakers for the FHFA to follow reconsideration mortgage loans to assist homeowners underwater in a mortgage loan. Third, the reckless behavior of the banks are still alive in the current economic uncertainty as banks were allowed to pay $33 billion in dividends to shareholders, and this move was allowed by the Federal … [Read more...]
Bank of America retreat and impact to DC
Bank of America is facing deep challenges on several fronts that threaten to weaken the bank even further with any negative downturns in the domestic economy or a deepening of the debt crisis in Europe. The disconnect of the bank is creating a synergy in the depth of the current problems the bank is facing. The foreclosure fiasco of Countrywide Mortgage and the bank's actions to the consumers are impacting the bank's ability to legitimately move a juggernaut of an institution through the most narrow of passages to overcome the challenges of the mammoth sized problems with bank being unscathed or weakened even further. The bank's decision to implement a foreclosure procedure with no regard to collateral damage has been a variable that has brought innocent borrowers along with willing chooser into a foreclosure process that ruins lives and communities, and the implementation of policies and procedures including fee structure and credit limit reductions with no regard to the consumer … [Read more...]
