Demographic Changes and Surprise Weakening in Corporate Profits Might Support Even Higher Prices for Treasury Bonds

In an historical rarity, the Dow Jones Industrial Average and the S&P 500 Index are both below where they were five years ago.  In contrast, the price of gold and the price of Treasury bonds have each soared.  The combination of gold rising along with silver and many other commodities while at the same time [...]


Increasingly, Europe Looks Like America of 2008

Events in Europe are following the pattern seen in the U.S. several years ago.  In Europe, financial crises in small countries are now giving way to crises in large ones.

This parallels what happened here.  In 2005, home-building stocks peaked, and the national housing market peaked around year-end.  In 2006, mortgage lenders and brokers began [...]


Friday Bank Failure Report For April 27, 2012

It has been a long time since I last reported on bank failures. Today the FDIC announced four closings so it gives me a chance to catch us up on that front. The count today for 2012 is 21 bank failures. One positive note is that the rate of bank failures has dropped, substantially. There [...]


Simon Johnson Knocks Down Libertarian Straw Men

The liberal-progressive economic website Project Syndicate is running an op-ed from Simon Johnson, former chief economist of the IMF, providing evidence that libertarianism is in the arguing stage of Gandhi’s formulation that first they ignore you, then they laugh at you, then they argue with you, then you win.  Dr. Johnson writes in The Libertarian [...]


HELOC Hell Jeopardizes Banks’ Tier I Capital

Shaky home equity lines of credit (HELOC) loans are overwhelming major banks’ Tier 1 capital which means they need more capital to meet Basel III requirements. B of A, Wells Fargo, Citigroup, and JPMorgan Chase together have about 40% of all home equity loans.

B of A estimates that only about $5 billion, or [...]


KeithGram: The Problem With Swiss Banks

S&P warned on Friday that Hungary’s bonds may soon be rated junk.

This will have major repercussions in Switzerland.  Like several island countries with troubled banking systems (e.g. Iceland, Ireland, the UK), Switzerland’s banking system has a balance sheet which is a multiple of the country’s GDP.  Needless to say, this is not due to [...]


This Year’s ‘Lehman Moment’ Might Occur Soon

The strangely-named MF Global is now the subject of the lead article of the online NYT, with the title Regulators Investigating MF Global for Missing Money.  Here’s the lede:

Federal regulators have discovered that hundreds of millions of dollars in customer money has gone missing from MF Global in recent days, prompting an investigation into [...]


Vikram Bandit States The Obvious!





This headline could almost be an Onion article: “Citi CEO cites mortgage threat to banks.” It’s like stating the obvious, loudly.

Chief Executive VikramPandit says the housing market and uncertainties plaguing residential mortgage portfolios remain the biggest threat to U.S. banks and the overall economy.

“We remain concerned about the [...]


Friday Bank Closing Report October 14, 2011

There were four bank closings Friday:

Country Bank, Aledo, ILFirst State Bank, Cranford, NJBlue Ridge Savings Bank, Inc., Asheville, NCPiedmont Community Bank, Gray, GA

I did a report on failures using Trepp data on October 11, 2011, but these above banks are new. A chart showing all closings since July 8, the penultimate report includes [...]


Bank Failure Report For September 2011

Here is the Trepp Bank Failure Report for September, 2011.

Six banks failed in September, down slightly from the seven that failed in August. The count is now 74 failures year-to-date, putting the annualized pace just below 100 for the full year 2011.

 Observations for September include:

Commercial real estate exposure was the main [...]


Too Big To Fail?

Lest we forget where all the banks went, here is a graphic from Casey Research that traces the mergers and acquisitions of the Big 4 banks. I recall back in the ’80s, a broker friend of mine had a tombstone of some deal their company did ten years before. It listed all the participating brokerage [...]