Welcome to Banking Update, a roundup of articles and news from around the Internet. Exactly how do you keep your money safe, will Bank of America fail in 2012, a potential housing bottom, Fannie and Freddie executives line their pockets, foreclosures take a short break for the holidays and why this great recession just won’t end. On to the links-
Many people fear that their money is no longer safe anywhere. One analyst argues that the financial system is actually more unstable than it was in 2008 and makes some suggestions on what to do and not do.
If one of the “too big to fail banks” fails in 2012, it will most likely be Bank of America. Shareholders of Bank of America have seen their shares collapse by 58% in 2011, almost as big a collapse as in 2008 when Bank of America had to be rescued by the U.S. government. The drop in Bank of America’s share value represents a massive $80 billion loss of wealth by long suffering shareholders.
Did government housing policies force Fannie Mae and Freddie Mac to invest in subprime mortgages? Bill Black argues that the reason revolves more around Fannie and Freddie executives seeking to line their own pockets.
Has the housing market bottomed? Big hedge funds are betting on a recovery.
Foreclosures take a break for the holidays except in Virginia which has the shortest foreclosure time in the nation. By contrast, New York homeowners who default on their mortgage, can expect to live “rent free” for 3 years.
The “great recession” (depression) that just won’t end. Why there is no confidence in the restorative power of the economy and why another macro economic shock could result in devastating deflation.
That’s it for today – best wishes for a Happy New Year!