“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and born in sin. Bankers own the Earth. Take it away from them, but leave them the power to create [...]
In the wake of recent market volatility and the Federal Reserve’s Open Market Committee meeting on April 24-25, calls for another round of Fed easing, ”QE3,” have again been stoked. It is worth sorting out the pros and cons of such a move for both the U.S. economy and financial markets.
It is an axiom of Austrian economic theory that the quickest road to recovery is to liquidate malinvestments as soon as possible. That is, sell off or bankrupt those failed projects invested in on the way up the boom phase of the business cycle. Those projects which seemed profitable at the time turned out to [...]
Peter Tchir wrote a piece yesterday describing yet another hole in the banks’ balance sheets:
I am not sure I fully understand it, but to me it looks something like this:
A bank has a duration mismatch. Its funding is short-term, which means it must be rolled over frequently. This subjects the bank to the [...]
This article is one of a series of occasional white papers from the Daily Capitalist taking a detailed look at specific issues affecting the economy. In this paper we discuss bank credit, banks and their real estate loans, the so-called “liquidity trap,” and why the economy is not growing. [...]
There have been 12 bank closings since my last report (February 18).
Heritage Banking Group, Carthage, MSRosemount National Bank, Rosemount, MNSuperior Bank, Birmingham, ALNexity Bank, Birmingham, ALNew Horizons Bank, East Ellijay, GABartow County Bank, Cartersville, GAWestern Springs National Bank and Trust, Western Springs. ILNevada Commerce Bank, Las Vegas, NVThe Bank of Commerce, Wood Dale, ILFirst [...]
Trepp puts out a lot of good data on the commercial (real estate) mortgage backed securities (CMBS) market. They also have a handy page of statistical data regarding CMBS issues. The reason I follow it is that most of the economic problems in the country relate to real estate, and especially commercial real estate. CMBS are those [...]
Someone has to stop the Fed before it crushes what remains of America’s main street economy. Last Friday morning alone it launched two more financial sector pumping operations which will harm the real economy, even as these actions juice Wall Street’s speculative humors.
First, joining the central banking cartels’ market rigging operation in support of [...]
This second article on credit conditions comes from a friend of mine, Joel Maloney, a mortgage broker in Santa Barbara (805-963-1496 x124). Joel has been in this business for 30 years and has been very successful serving his clients. We were chatting about mortgage lending at a Super Bowl party and I asked him to [...]
I recently wrote about the credit situation and received several interesting comments about it. This first comment speaks for itself: a small businessman in those proverbial trenches, trying to expand his businesses. You can sense his frustration. If you think credit is easing substantially for small businesses, think again.
My wife and I opened a couple [...]
Bank credit and liquidity is something I follow closely because it is a key to economic revival.
Presently banks have been more aggressive in cleaning up their loan books which has required them to recognize troubled loans and reserve more for loan losses. Part of the trend is that bank regulators have been stricter with [...]