The combination of all time lows in mortgage rates along with the collapse in real estate values has resulted in all time record housing affordability. During the inflation racked 1980’s, interest rate increases by the Federal Reserve resulted in double digit mortgage rates. High mortgage payments froze most home buyers out of the housing market […]
Bank “Stress Tests” Results Due In March – Don’t Expect Anyone To Fail
January 30, 2013 By 2 Comments
Under the Dodd-Frank Act, the Federal Reserve is required to conduct stress tests which are forward-looking exercises to determine whether large institutions have sufficient capital to absorb large losses and support operations under severely adverse economic conditions. The supervisory stress tests include examining capital ratios, revenue and the size of potential losses. The Federal Reserve […]
FDIC Issues 71 Enforcement Actions Against Banks and Individuals In December
January 25, 2013 By 1 Comment
The FDIC today issued the list of 71 enforcement actions taken against banks and individuals in December 2012. In the previous month, there were a total of 72 enforcement actions taken. The December enforcement actions include the following: 11 consent orders 1 prompt corrective action 13 civil money penalties 12 section 19 orders 14 orders […]
Negative Real Interest Rates – The Invisible $290 Billion Tax On Savers
January 24, 2013 By Leave a Comment
Whatever happened to the concept of earning interest on savings? Since the start of the financial crisis in 2008, the Federal Reserve has aggressively suppressed interest rates to near zero. The Fed’s rationale for lowering interest rates was to get the economy back on track by lowering borrowing costs for both consumers and businesses. Lower […]
The Rally In Big Bank Stocks May Be Over
January 23, 2013 By Leave a Comment
For over the past year, the stocks of big banks have rallied significantly. Lower loan losses, a stabilization of the real estate market and a settlement with the government over shortcomings in foreclosure proceedings have all contributed to a growing conviction by investors that the worst is over for the banking industry. Here’s a look […]
1st Regents Bank, Andover, MN, Closed By Regulators
January 18, 2013 By Leave a Comment
1st Regents Bank, Andover, MN, was closed today by the FDIC and state regulators. In its role as receiver, the FDIC sold the failed bank to First Minnesota Bank, Minnetonka, MN, which will assume all deposits of 1st Regents. Established in May 2001, 1st Regents was a small bank with only $50.2 million in total […]
Westside Community Bank, Washington, Closed By Regulators – First Bank Failure of 2013
January 11, 2013 By Leave a Comment
Westside Community Bank, University Place, Washington, became the first bank closing of 2013. Regulators from the Washington State Department of Financial Institutions closed the bank today and appointed the FDIC as receiver. To protect depositors, the FDIC sold failed Westside Community Bank to Sunwest Bank, Irvine, CA. Westside Community Bank was established in March 1995. […]
Warren Buffett – “I Don’t Understand Why People Hate Bank of America”
January 3, 2013 By 4 Comments
Warren Buffett is probably confused. In a recent poll, consumers rated Bank of America as the second “absolute worst company in America.” How could so many people hate a bank which has provided generations of Americans with financing to build homes and businesses across America? Even as Bank of America seemed like it was headed […]
Bank Savers Get Zero Returns – Is It Time To Invest In Bond Funds?
January 3, 2013 By Leave a Comment
Many former bank savers, disgusted by the near zero rates offered on their savings by banks, have increasingly turned to bond funds as a means of harvesting interest income. Since 2008, when the Federal Reserve decided to force interest rates to unprecedented lows, investors have poured a staggering $1 trillion into bond funds. Will 2013 […]
2012 Bank Failures Lowest Since 2008 As Regulators Close 51 Banks
December 31, 2012 By Leave a Comment
During the past five years we have witnessed the greatest financial turmoil since the Great Depression. Hundreds of giant bank failures rocked the nation, real estate values crashed, trillions of dollars of wealth vanished overnight and millions of Americans lost their jobs. Although a relative calm has been restored due to unprecedented actions by both […]