Category Archives: Banking industry

Promontory Decides to Reinvest Part of its $1 Billion of Ill Gotten Gains from Botched Foreclosure Reviews By Buying Hiring Former SEC Chief Shapiro

As regular readers may recall, Promontory Financial Group was one of the huge winners from the joke on the public otherwise known as the Independent Foreclosure Review. The only accurate word in that label, it turns out, was “foreclosure”.

So how is Promontory using all its lucre? Buying up even more former regulators to further its reputation as a connected insider. Mary Shapiro had barely left the SEC when she was nominated for a board seat at General Electric, which despite its image as a manufacturer, has for over two decades had nearly half its revenues coming from financial services. And now Shapiro has been signed by Promontory to help arm-twist regulators not to do their job.

Wells Fargo’s “Reprehensible” Foreclosure Abuses Prove Incompetence and Collusion of OCC

Two bankruptcy cases in Louisiana that have revealed systematic, persistent foreclosure abuses by Wells Fargo have gotten enough media attention that it is inconceivable that banking regulators don’t know about them. The lack of any intervention, or even so much as a throat-clearing by the Office of the Comptroller of the Currency is yet another proof of how the regulator apparently sees its role as fronting for banks rather than enforcing rules.

Pop Quiz: How Big Is the Bailout Of Cyprus?

By Antonis Polemitis, a venture capitalist based in Manhattan. Cross posted from Ledra Capital

Most publications talk about the €10 billion or €17 billion Cyprus bailout. Let’s take a pop quiz on the right answer.

Obama Plans to Sacrifice Ordinary Americans Yet Again in “Public/Private Partnership” Infrastructure Scam

Apparently Obama’s idea of a Holy Week sacrifice is to feed American citizens to rapacious bankers, this time through the device of “public/private partnerships” to support infrastructure spending.

Destruction of Cyprus Economy Proceeding Ahead of Schedule

When I first heard about the Cyprus ~~ritual execution~~ bailout, I had thought that the widespread predictions that the island nation’s economy would contract by 20% to 30% over the next two years were off base.

Michael Hudson Discusses Why We Need Public Banks to Prevent Cannibalization of the Economy on Real News Network

Michael Hudson continues his discussion of banking on Real News Network by focusing on the role banks played in different economies in the early period of industrialization.

Will Slovenia Be the Next Victim of German Politics?

The IMF says that Slovenia will need to issue €3 billion in bonds this year. The country may be forced to seek painful assistance from the Troika. Will Germany be the heavy as it was with Cyprus?

The Capital Controls in Cyprus and the Icelandic Experience

Cyprus has imposed temporary capital controls. This column sheds light on how temporary and how damaging they are likely to be, based on Iceland’s experience. The longer controls exist, the harder they are to abolish. Icelandic capital controls, which have been ‘temporary’ for half a decade, deeply damage the economy by discouraging investment.

Yanis Varoufakis: The Good, the Bad and the Extremely Ugly (Aspects of the Cyprus Deal)

Yves here. The longer you look at the Cyprus “rescue,” the worse it looks. As you can learn from our compendium in today’s Links, the Cypriot economy is already reeling. It’s straining under the extended bank holiday, which is scheduled to end Thursday. Moreover, the impact of losses radiating from number two bank Laiki are already propagating through the island.

And that’s before we get to the wider ramifications. Whether Germany understands it or not, it has delivered a fatal blow to the Euro project. How long it continues is anyone’s guess, but the Balkanization of the financial system that the Eurocrats have set in motion means they won’t be able to go the US/Japan zombification route.

Free Trade and Unrestricted Capital Flow: How Billionaires Get Rich and Destroy the Rest of Us

Yves here. This post highlights an issue that gets far too little attention: how the “free trade” agenda has been used to promote a capital mobility agenda, and why that works to the detriment of ordinary citizens. It focuses on the real economy side of the free-flowing capital experiment; we’ll discuss next week how the Trans-Pacific Partnership is an alarming advance in this process of grinding down what is left of the middle class to benefit of the rich.

David Dayen: OCC, Fed Stonewalling Congressional Oversight of Independent Foreclosure Reviews

A couple months ago, Elizabeth Warren and Elijah Cummings opened what they described as an investigation into the Independent Foreclosure Reviews. We all knew the IFRs deserved some form of response by Congress, and we knew that the OCC and the Fed wanted no part of any questioning of their latest gift to predatory banks and their fraudulent practices.

But we didn’t know how much they would try to stonewall this investigation right from the outset – at least not until today, when Warren and Cummings released some of their recent correspondence with the federal regulators.

Michael Hudson Explains How Deficit Hysterics Target the Wrong Type of Debt

I was at the Atlantic Economy conference the week before last, and Michael Hudson got in one of the best quips: “Helicopter Ben has taken off and has been dropping money all over Wall Street. But he hasn’t dropped any on Main Street.” He has an informative talk with Paul Jay of Real News Network on why the fixation on public debt is wrongheaded, and we should worry about private debt instead.

Will Cyprus Be Contained? (Updated)

In March 2007, Fed chairman Ben Bernanke said that he thought the impact of losses on subprime mortgages was likely to be contained. It took five months for events to start proving him wrong. August 2007 marked the onset of the first acute phase of the global financial crisis, when the asset backed commercial paper market seized up.

Last week, in a press conference, Bernanke indicated that he thought the likelihood of the crisis in Cyprus having larger ramifications was limited, and avoided using the “c” word. But the message was similar to that of March 2007.

So are we likely to see the sort of delay between the assessment and the onset of trouble, as we did in 2007, or is Cyprus a nothingburger, as the Troika and many investors contend?

Repeat After Me, Cyprus Is (Was) Not a Tax Haven

Cyprus is over as an international banking center, which the Financial Times reports was one of Berlin’s objectives for its rescue. However, the business press (and yours truly following them) has referred to Cyprus as a tax haven. That description is part of the PR campaign to justify punishing the island.