Banks Fight to Kill Proposed Consumer Protection Agency

Peacenik calls this shameless. Peacenik says to the bankers: "shut your pie holes." Ferchrissakes, bankers destroyed the global financial system. Crimes were committed. Not only should there be a Consumer Financial Protection Agency, but a lot of bankers should be in jail. Yet they have the nerve to lobby against regulation? Start investigating, start charging, start confiscating, and start imprisoning. Where in the hell is the media? Oh, Peacenik forgot. It is bought and paid for. It is part of the scam. Have a good weekend.

by Kevin G. Hall

Treasury Secretary Timothy Geithner, center, talks with Congressional Oversight Panel Chair Elizabeth Warren before the start of a hearing on Capitol Hill in Washington, Thursday, Sept. 10, 2009. (AP Photo/Susan Walsh)

WASHINGTON — If you doubt that U.S. banks long to return to the days of impotent regulation, you need only look at one of the financial sector's top legislative priorities: killing a proposed new agency that would be dedicated solely to protecting consumers' financial interests.

The Obama administration is asking Congress to create a new Consumer Financial Protection Agency to regulate consumer financial products ranging from credit cards to mortgages, and to simplify disclosure about them all.

Though virtually every cause of the nation's recent financial crisis was rooted in weak consumer protection, the U.S. Chamber of Commerce is leading the fight against the proposed agency on grounds that it would make credit less available and more costly. The American Bankers Association, the Independent Community Bankers of America, and the Financial Services Roundtable also oppose the measure.

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Canada's dirty subprime secret

An investigation by Globe reporters uncovers a burgeoning subprime mortgage problem that many, including Prime Minister Stephen Harper, have insisted does not exist in Canada

Greg McArthur and Jacquie McNish
Saturday, March 14, 2009

From the ramshackle, plywood deck on Brad Goodyear's rural Vancouver Island home, most people see piles of trash, a mattress, abandoned appliances and heaps of salmon fishing nets.

Mortgage lenders, however, have looked at the same property and, until recently, seen nothing but cash.

But after two decades of continually borrowing up – plowing through mortgages from Royal Bank, private lenders and credit unions, until settling on two subprime lenders – the 46-year-old fisherman has landed in a foreclosure proceeding.

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Peacenik missed this article in Saturday's Globe and Mail. Peacenik has always thought it was strange that Canada seems to have missed the worst of the banking/real estate crisis. Peacenik went for a walk on Sunday and "sold" signs were popping up everywhere. Life seemed great. But remember this article. And don't forget that while Harper is touting the health of the Canadian banking sector, he conveniently forgets to mention that this same sector has already received $75 billion in taxpayer funded bailouts.

The auto industry has long been one of the main engines of the Canadian economy. The auto industry is shrinking. Where are new jobs going to come from? Who is going to buy Canadian resources when the world is in a recession? Are the banks telling Peacenik the truth? Is Stephen Harper telling Peacenik the truth? Peacenik doesn't think so.

Europe's entire banking system on the edge of the abyss [Updated]

by gjohnsit Sat Feb 21, 2009 at 11:53:56 AM PST

This headline is scary enough.

European bank bail-out could push EU into crisis The article talks in vague terms about "secret reports". The problem is that the article has been changed. A Google search will reveal it's original headline which is much scarier.

European banks may need £16.3 trillion bail-out, EC document warns.

gjohnsit's diary:

The Telegraph changed more than the headline. They had also removed two paragraphs from the original news article. Fortunately other blogs had captured those missing paragraphs.

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It is the weekend, and Peacenik is enjoying Hockey Day in Canada, particularly Montreal playing well. Punditman encourages Peacenik to not post on the weekends. But when Peacenik sees the word "ABYSS" in a headline, Peacenik cannnot help Peacenik's self. The situation is so DIRE, (another word that Peacenik can't resist) that the media is censoring itself. That's right, the world is on the verge of PANIC (Peacenik like word). The BLACK HOLE OF DEBT (Peacenik's favorite) is insatiable. Peacenik hopes gjohnsit maybe had too much to drink on the weekend and is just being ALARMIST. But Peacenik continues to prepare for DOOMSDAY in any case. Go Leafs Go. And Peacenik thinks Sundin deserves to be cheered tonight.

NY Times Example of a Toxic Asset

by CalculatedRisk on 2/01/2009 10:32:00 PM

To date, the banks have stuck their heads in the sand and demanded that they be paid the price of good apples for bad apples.”Lynn E. Turner, a former SEC chief accountant.

Vikas Bajaj and Stephen Labaton provide us with an example of the different values for a toxic assets in the NY Times: Risks Are Vast in Revaluing Tainted Assets.

The wild variations on the value of many bad bank assets can be seen by looking at one mortgage-backed bond recently analyzed by a division of Standard & Poor’s, the credit rating agency.

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Peacenik and everyone else have been talking a lot about "toxic assets". These are the things that are wiping out the globe's finances. This New York Times article is a good primer about what a toxic asset really is. Now Peacenik understands. Do you own any toxic assets? Do you have a bank account? Do you belong to a pension plan? Do you own any mutual funds? Do you breath? Every one is exposed to these toxic assets. When their true value is finally recognized, watch out. But our dear leaders continue to assure Peacenik all will be well. Maybe they know something Peacenik doesn't. Do you believe them?

Stop Rearranging Deck Chairs on the Titanic and Nationalize the Damn Banks

By Joshua Holland, AlterNet. Posted January 30, 2009.

It's the best possible course to rescue our economy at this point; all the other options would be disastrous.

The painful but unavoidable reality of the financial crisis is that every dollar spent trying to prop up a failing bank is just good money thrown after bad; a taxpayer rip-off, short and sweet.

But in Washington, many are trying to avoid that fact nonetheless. Economist Paul Krugman wrote that the political establishment has "become devotees of a new kind of voodoo [economics]: the belief that by performing elaborate financial rituals we can keep dead banks walking." Goldman Sachs' economists estimate that those rituals might cost up to $4 trillion to perform.

It's time that the government stops flailing around with piecemeal bailouts and loan guarantees, takes over these institutions -- takes them out of private ownership -- sells off their good assets in an orderly way, trashes the toxic stuff and then resells them to the private sector down the road as leaner institutions that are dedicated to the primary purpose of banking: making loans and holding deposits.

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Peacenik doubts that nationalizing the banks is the perfect solution. There are too many dominoes falling all at once. But the banks are at the root of this crisis. Their management does not deserve a bailout. Their management deserves jail and poverty. But Peacenik thinks nationalizing the banks is part of a possible, painful, muddling thru scenario. It has to be done. The alternatives aren't working. The world is witnessing incredible real time experiments in global monetary policy. The results of these experiments are apparent within days. Shovelling money into the black hole of banking has failed. Will the muddling through scenario work? Its Friday. Peacenik says maybe. Have a good weekend.

Citigroup Goes To Sleep

It's the end of the line for Citigroup. The "group" will soon be gone as Pandit Dismantles Weill Empire to Salvage the Bank Within Citi.

Vikram Pandit is unraveling his empire to save his bank. Citigroup Inc.’s chief executive officer said yesterday he would cede control of the Smith Barney brokerage to Morgan Stanley. Pandit may also dump the CitiFinancial consumer-lending unit, tag Tokyo-based Nikko Asset Management Co. for eventual sale and rein in trading with the bank’s own capital, people familiar with the matter said.

Some current and former Citigroup executives place the blame for the firm’s troubles on Weill. He refused to spend enough on technology and failed to integrate the new companies he acquired, say people familiar with the matter.

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Peacenik can barely process all the bad financial news Peacenik is reading. Here is a story about the demise of Citigroup, one of he biggest banks in the world. It is broke. And the reaction of the media and the public? Yawn. The public has been inured to bad fiscal news now. Your bank is broke or going broke? Yawn. The Phoenix Coyotes are bankrupt? Yawn. Peacenik wonders when ATMs will suddenly stop functioning. Peacenik forgets how to bank in person. Does in-person banking still exist? Oh well, Wayne Gretzky is a great Canadian.