ppip: Wells Fargo "Earnings"
- 08/06/09 03:00 PM
Wells Fargo reported earnings on July 22nd which showed a surge in non-performing assets, not unlike the earnings report that Bank of America reported. According to a Reuters article, non-performing assets soared 45% from the first quarter. Non-performing assets typically are loans that the borrower has stopped making payments on. Wells Fargo non-performing commercial and commerial real estate loans surged 69% from the 1st quarter. While Wells Fargo, as well as the rest of the banking industry, has been the beneficiary of favorable government tax breaks, loan guarantees, TARP money, accounting principles, the PPIP, and the grand-daddy of all refinancing booms, it continues to remain under … (6 comments)
ppip: Geithner's PPIP Moving Forward
- 07/09/09 03:39 AM
Despite the fact that Congress never actually approved Geithner's plan to use TARP money to subsidize the PPIP, and despite the reality that the PPIP will do little to actually stimulate the credit markets, (the banks will only ratchet up their lending once the housing market and economy stabilize, not when they are given money; see TARP) Geithner is continuing to move forward with yet another program to help the banking sector. From the $700 billion of TARP, to hundreds of billions of loan guarantees, to preferential tax treatment, to the relaxation of mark to market accounting, the banks continue to be the focus government … (1 comments)
ppip: The PPIP Could Be Done Before It Starts
- 06/07/09 04:02 AM
The Wall Street Journal is reporting that the PPIP, the Public-Private Investment Program that was designed by Geithner, the Fed, and the FDIC, may actually never come to fruition. The program was designed to leverage billions of TARP money into nearly $1 trillion worth of tax-payer backed loan guarantees in an effort so remove toxic assets from banks balance sheets so as to "get credit moving again." There are several reasons why this plan was a fraud and I am pleased that this ship may be sank. First, if the motive was really about credit, then shouldn't the $700 billion in TARP money we … (2 comments)
ppip: Stress Test Mess II
- 05/09/09 08:52 AM
A couple of days ago I wrote a bit about the fiasco known as the Federal Reserve's stress test. Two significant points jumped out at me from the report other than the fact that the whole thing appeared more like a public relations effort more than an actual banking evaluation: "First, that Bank of America needs an additional $33.9 billion in capital. Wasn't CEO Ken Lewis quoted as saying as recently as a few weeks ago that Bank of America was going to repay the TARP in 2009? And second, Citigroup is estimated to need only $5.5 billion in additional capital. Hmm, … (1 comments)
ppip: Stress Test Mess
- 05/07/09 11:53 AM
Ok, so let me get this straight because I didn't go to a fancy school; the Federal Reserve wants us to believe that 19 of our largest banks need to raise only $74.6 billion in new capital while at the same time Geithner and the Treasury wants us to believe that we need to leverage $100 billion of TARP funds into upwards of $600 billion (or more) in tax-payer guarantees in order to remove toxic assets from the banks balance sheets as part of the PPIP. Am I missing something? If the bank problem is only a $74.6 billion dollar problem, then why don't we just … (6 comments)
ppip: But It's All About Credit, Right?
- 05/04/09 11:41 AM
How many times have we heard either politicians, talking heads, or CEOs say, "we need to get credit moving again"? As I have written about before the accepted philosophy has been that once we fixed the banking system and gave the banks enough capital, or guaranteed enough of their loans, or when we removed the toxic assets (all at the cost of the tax payer of course), that the banks will start lending again, the economy will turn around, and as Clark Griswold said in Vacation, we'll all be whistlin' Zip-a-dee-do-dah out of our you know whats as we skipped to work each day. Well, we have … (6 comments)
ppip: It's NOT About Credit
- 04/26/09 03:21 AM
For the past several months I have listened to CNBC analysts, politicians in Washington, and bank CEOs talk about the need to get credit flowing. That once we fixed the banking system and gave the banks enough capital, or guaranteed enough of their loans, or when we removed the toxic assets (all at the cost of the tax payer of course), that the banks will start lending again, the economy will turn around, and as Clark Griswold said in Vacation, we'll all be whistlin' Zip-a-dee-do-dah outta out of our you know whats as we skipped to work each day. And I will admit, they had me going for … (9 comments)
ppip: TARP Fraud
- 04/25/09 11:12 AM
While Larry Kudlow is not afraid to turn weeds into mustard seeds, I will give him this, he's also not afraid to call bull on what is taking place with TARP. In his latest bog post Kudlow illustrates how Special Inspector General Neil Barofsky's report into TARP has "opened 20 criminal probes into possible securities fraud, tax-law violations, insider-trading, and mortgage-modification fraud related to TARP." Barofsky's report states that TARP is, "inherently vulnerable to fraud, waste and abuse, including significant issues related to conflicts of interest facing fund managers, collusion between participants and vulnerabilities to money laundering." Barofsky, according to Kudlow, goes on … (10 comments)
ppip: Wells Fargo Looks To Be A "Buyer" of Toxic Assets
- 04/18/09 12:00 PM
Howard Atkins, the CFO of Wells Fargo, plans to take advantage of the now wildly popular Public-Private Investment Program, the PPIP. "We think the Public-Private Investment Program is a really good idea", Atkins said during a recent CNBC interview. And what's not to like, not only can Wells Fargo sell their toxic, now "legacy", assets that have been weighing on their books for more than they are worth, but now they can also invest in other banks toxic assets with government guarantees. In other words, they can be absolved of the bad investments they have made while at the same time they can make new investments that … (6 comments)
ppip: Larry Kudlow's Spin on Wells Fargo
- 04/12/09 10:13 AM
Whomever said the media loves bad economic and housing news has never met CNBC's Larry Kudlow. Larry Kudlow has been consistently spinning economic data for the past several months and his recent blog post about Wells Fargo's first quarter "profit" is no exception. In response to Wells Fargo's earnings report, Kudlow writes, "Wells Fargo Bank shocked Wall Street today with an earnings report that was double what the street mavens expected. Stocks shot up 200 points. What's the first message? Banks are turning profitable. They're in better shape than people think." Larry, if they are in such good shape, why then do we need … (24 comments)
ppip: Wells Fargo 1st Quarter "Profit"
- 04/11/09 09:56 AM
Wall St. is desperate. They are desperate for "good" news, for new rules, and for bailouts. Anything that will allow the banks to survive under the guise of free market capitalism, regardless of the impact it will have on the broader economy or the tax payer. On top of the $700 billion TARP, the estimated $1 trillion Public-Private Investment Program (PPIP), the easing of mark to market accounting, Wall St. can now celebrate Wells Fargo's 1st quarter "profit" which is a direct result of the losses (tax benefits) associated with their acquisition of Wachovia. I have to thank Greg Saunders for bringing this … (4 comments)
ppip: Toxic Assets Approaching $4 Trillion
- 04/07/09 12:20 PM
According to an article published by Reuters and CNBC.com, the IMF is forecasting that the number of toxic assets sitting on banks and insurers balance sheets could grow to $4 trillion by the end of the year. Additionally, it is worth mentioning that by their estimates, $3.1 trillion of these "assets" originated in the United States. The reason this $4 trillion, or even $3 trillion for that matter, is relevant is because tax payers could end up guaranteeing all of it to investors that purchase the toxic assets under the Public-Private Investment Program (PPIP) that Geithner has invented. The PPIP was designed to leverage $100 billion of the remaining TARP … (6 comments)
ppip: "Bailed-Out Banks Eye Toxic Asset Buys"
- 04/03/09 03:45 AM
"Bailed-Out Banks Eye Toxic Asset Buys". This is the headline from a report put out by Reuters today talking about how, "U.S. banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase, are considering buying toxic assets to be sold by rivals under the Treasury's $1 trillion plan to revive the financial system". Time out. I want to make sure I understand what is going on here because I didn't go to a fancy Ivy League school or work on Wall St. Back in October we were told by then Treasury Secretary Hammering Hank Pauslon that we needed … (8 comments)
ppip: Who Needs Congress When You Have The Fed, FDIC, and Treasury?
- 03/26/09 05:50 PM
Despite all of my and millions of Americans frustrations and disappointments with Congress over the past several months, as least logistically speaking, we had representation in Washington. We may not have liked what they were doing, but it is our own fault, we voted for them. That was until the Fed, FDIC, and the Treasury Department teamed up to leverage $100 billion of TARP (tax payer) money into possibly $1 trillion in loans which will be guaranteed by the FDIC so that investors can purchase the new and improved "legacy (don't call them toxic) assets" from banks. This scheme that could ultimately put the tax payer on the hook for … (7 comments)
Wells Fargo reported earnings on July 22nd which showed a surge in non-performing assets, not unlike the earnings report that Bank of America reported.
;)
;)
