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Jim Sinclair’s Commentary
Let us not be fooled by the mainstream media in cartoons, print or on the airwaves.
Debt is sitting equally on all major western financial nations.
Jim Sinclair’s Commentary
Is your bank listed here?
165 Banks On the Brink
By Philip van Doorn 02/16/12 – 06:00 AM EST
NEW YORK (TheStreet) — With year-end data for 99% of the nation’s savings and loan associations now available, there are 165 undercapitalized institutions on the TheStreet’s Bank Watch List, which is 12 more than last quarter. This is despite 13 banks being shuttered by regulators since the final third-quarter watch list was published in November.
It is important to note that any capital raised by institutions during the first quarter of 2012 will not be reflected on the Watch List.
Most banks and thrifts need to maintain Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of at least 5%, 6% and 10% to be considered well-capitalized under regulatory guidelines. Some trust banks carry lower capital requirements. The ratios need to be at least 4%, 4% and 8% for most to be considered adequately capitalized.
Two banks on the fourth-quarter watch list was actually negatively capitalized as of Dec. 30. These included New City Bank of Chicago, with whose Tier 1 leverage ratio fell to -2.38%, after the bank posted a fourth-quarter net loss of $5.2 million, and Home Savings of America, with a Tier 1 leverage ratio of -2.25%, following a fourth-quarter net loss of $7.0 million.
The largest thrift joining the watch list is the privately held Liberty Bank, FSB, of West Des Moines, Iowa, which had $934 million in total assets as of Dec. 30. The institution has been significantly undercapitalized for a year now, after a fourth-quarter 2010 net loss of $109.2 million brought it’s Tier 1 leverage ratio below 3.00%. The Office of Thrift Supervision in July of 2011 ordered Liberty Bank, FSB to bring its Tier 1 leverage ratio up to 9.00% and its total risk-based capital ratio to 12.00%, by Sept. 30, 2011. These ratios were 2.30% and 4.76%, respectively, as of Dec. 30.
Jim Sinclair’s Commentary
We deal with all the problems of economics and politics. Now here is a fellow who really does not give a damn.
The question is if he is happier?
Jim Sinclair’s Commentary
As long as our homes are worth buttkiss, unemployment will remain high and the demand for injected liquidity will only grow.
Foreclosures on the Rise Again
Published: Thursday, 16 Feb 2012 | 12:04 AM ET
By: Diana Olick
CNBC Real Estate Reporter
After a year-long reprieve from rising foreclosures, the numbers are going up again.
One in every 624 U.S. households received a foreclosure filing in January, up 3 percent from the previous month, according to a new report from RealtyTrac. Foreclosure activity froze in many states in 2011, due to processing delays after fraud, or so-called "Robo-signing," were uncovered in the fall of 2010. The thaw is now on.
"We expect the pattern of increasing foreclosures to continue in the coming months, especially given the finalized mortgage and foreclosure settlement reached in early February between 49 state attorneys general and five of the nation’s largest lenders," said RealtyTrac’s CEO Brandon Moore in a written release. "Foreclosure activity increased on a year-over-year basis for the first time in more than 12 months in Florida, Illinois, Indiana and Pennsylvania, following a pattern we saw in late 2011 in states such as California, Arizona and Massachusetts."
While states that do not require a judge to preside over foreclosure proceedings, like California, saw a jump in filings toward the end of last year, judicial states have all but stalled. That will now change, thanks to the $26 billion dollar government-lender/servicer settlement. There will still be some delays on individual state levels, but the wheels are turning again, and that means more bank repossessions and more foreclosed properties heading to the re-sale market.
Jim Sinclair’s Commentary
O my god!
Derivative CDs Tempt Savers as Banks Reap Fees
By Matt Robinson – Feb 14, 2012 9:05 PM ET
A gray-haired woman picking a flower with a young girl adorns the cover of an HSBC Holdings Plc (HSBA) brochure that promises investors both “the growth of the market†and “the security of FDIC Insurance.â€
By tying interest rates to everything from the Dow Jones Industrial Average to precious metals, the pamphlet for HSBC’s Market-Linked Certificates of Deposits explains U.S. investors have the potential to earn “enhanced returns†over as long as seven years. A separate disclosure states that they also may earn zero, getting just their original principal back after the CD matures, while brokers may collect fees of 6 percent or more. Investors that need to get their money earlier must find a buyer for the CD, risking a loss.
As the Federal Reserve holds interest rates at about zero for a fourth year, Goldman Sachs Group Inc. (GS), Citigroup Inc. and the rest of Wall Street are selling record numbers of the CDs to savers seeking the chance to earn eight times what fixed-rate deposits pay, while having principal backed by the Federal Deposit Insurance Corp. Officials at the Financial Industry Regulatory Authority, or Finra, said they’re examining whether buyers understand the risks of CDs that may lock up money in derivatives bets for as long as 20 years.
‘Hugely Profitable’
“They are hugely profitable for the issuers, much more profitable than typical CDs, and they are poorly understood by retail investors, who will not be able to figure out how much profit the issuers are making,†said Frank Partnoy, a University of San Diego law professor and formerMorgan Stanley (MS) derivatives trader. “The institutions that are selling them might as well be marketing CDs whose value depends on which team wins the Super Bowl.â€
