Isiah 1:17- Learn to do well. Seek justice, Relieve the oppressed, Judge the fatherless, Plead for the widow.
[VIDEO] If Dave Ramsey wasn't that clear about what happened other than trying to state that what happened to Silicon Valley Bank and Signature Bank isn't likely to happen at a bank near you. I think there were some points in this discussion without bringing up politics or the culture war about where these banks went wrong. There were some mismanagement and perhaps the expectation that the Federal gov't will swoop in and save the day. So perhaps mismanagement because Uncle Sam got you!
[VIDEO] I haven't read too much on this particular issue. What I know about this is that the mgmt at Silicon Valley Bank seemed to have done a bad job of insuring they had enough money on hand to stay afloat. They also put a lot of money into investments that don't mature until years later, which also means well they still don't have enough money on hand for lending and deposits.
Of course if you follow Tucker or Glenn Beck they make this about the economy under Joe Biden. They make this about the wokeness that pervades the work culture at these banks. And of course back to the starting point that I made, the bank was mismanaged especially the money was mismanaged.
I think Dave Ramsey calls it down the middle. If you're worried about the banking system don't worry about it. It wasn't just Silicon Valley that failed it's also Signature Bank. He mainly puts the crisis in terms of both of these banks that what allowed them to collapse and be taken over by the Federal Gov't isn't very pervasive in other banks such as Chase. According to him so far the public still has faith in Chase and hopefully other banks.
Also I understand both of those banks I mentioned that failed mostly catered to tech industry startups. Alas another contribution to these failures may have been the cyclical nature of the tech industry. It seems solid but let's not forget they're prone to layoff and downturns also.
[VIDEO] Watkins tends to go on and on, however, what if he's right when he says ultimately that banks will become obsolete. In what way? Well I'm finding out how banks will only give you so much for your money.
So hopefully many of you have money in an interest-bearing account and we're in an environment of high inflation. I've been looking at interest rates for such accounts checking or savings and I realize I'm not getting a decent return. So one thing that Watkins would suggest is for example use some of your savings not all of course and that's my advice and put it into the stock market to start.
When you think about it the bank is doing roughly the same thing. With your money that you put into an account they're using that money to lend. That's capital for them and in an inflation environment I would think that if interest rates aren't great and probably not the best return.
Detroit's revitalization hopes are getting a boost from one of the deepest-pocketed players in U.S. finance.Above Chase CEO Jamie Dimon is being interviewed on NBC's Today program. This is certainly good news for Detroit.
JPMorgan Chase, the nation's biggest bank, will announce Wednesday that it is investing $100 million in Detroit over five years, strengthening the city's redevelopment efforts, speeding up blight removal, helping train city residents for new jobs, and making mortgage money available for home loans.
About half the cash will come in the form of loans and the rest in grants. Chase has been working for several months developing the program, which will be announced Wednesday at a luncheon featuring Gov. Rick Snyder, Mayor Mike Duggan and JPMorgan Chase Chairman and CEO Jamie Dimon.
Dimon told the Detroit Free Press that the idea started last fall when Detroit was going through its painful bankruptcy.
"Obviously Detroit was having issues," Dimon said. "I got together some of our senior people and said what can we do that's really neat, that could be really creative."
Chase is already a leading Detroit lender to consumers as well as to businesses.
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| Detroit skyline by D rek/flickr |
A fresh settlement between Detroit and two global banks to erase a Wall Street bet that overwhelmed the city’s budget could be the first crucial element of the city’s Chapter 9 bankruptcy restructuring.Hopefully in the near future there will be further details!
The amount of the new deal is still confidential, and it still needs judicial approval. It comes as emergency manager Kevyn Orr is putting the finishing touches on a comprehensive restructuring proposal that’s expected to be released this week.
With more than 100,000 creditors waiting to see what the city is expected to offer — and 700,000 residents hoping for a better city — Orr is expected to propose dramatically slashing its $18 billion in debt and liabilities and redirecting cash to core services, including police, fire and blight removal.
“If there’s one thing certain about the plan that will be filed shortly, it’s going to change many things very substantially,” said Bruce Bennett, an attorney for Jones Day, Detroit’s lead bankruptcy law firm
Which means that the government, that one lender that can't and won't pull out from the student loan bubble until it finally blows up, will be even more on the hook, and require yet another bailout of this latest $1+ trillion debt house of cards.If this bubble blows up does it mean that those who are on the hook will no longer have to pay their loans?
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| A now defunct bank! |
New City Bank, the South Michigan Avenue lender for which indicted Cook County Commissioner William Beavers is vice chairman, was closed today by state banking regulators.It did at least have on notable account:
The Federal Deposit Insurance Corp. couldn't find another bank to take on the assets and deposits, and instead will pay back depositors up to the $250,000 limit at which the FDIC insures deposits.
New City had $72.4 million in deposits and $71.2 million in assets as of year-end 2011.
The bank was launched in 2003 by a group of local investors, including Mr. Beavers, a South Side alderman at the time. Mr. Beavers, who was indicted last month on charges of tax evasion, holds a small stake in the bank, which now will be wiped out. He denies any wrongdoing.
The FDIC now will take ownership of the bank's assets, including loans to U.S. Rep. Bobby Rush, D-Chicago, who ran into brief trouble with New City a few years ago over non-payment of property taxes on a home on which the bank held a mortgage.
The shutdown will cost the FDIC’s insurance fund about $17.4 million, the agency said. As of Dec. 31, New City reported $71.2 million in assets and $72.4 million in deposits. It is the 13th FDIC-insured bank to fail this year nationwide.This bank failure even hit the AP wires, the first two sentences of that article:
The bank’s most recent listing of its officers on its web site omitted any mention of Beavers, who is accused of failing to pay taxes on more than $226,000 in campaign funds he allegedly converted to personal use.
Regulators have closed a small bank in Chicago, the 13th U.S. bank to fail this year.The Sun-Times noted the last Chicago area bank to fail which was early last month. So far in Illinois according to Marketwatch, New City Bank was the second to fail this year!
By this time last year, 23 had been shuttered.
The FDIC said it will hold all assets of New City for later distribution and that customers should make loan payments as usual.
Federal bank regulators have sued two brothers of former state Treasurer Alexi Giannoulias in connection with the failure of the family's Broadway Bank in 2010.Hat-tip Newsalert!
Also a defendant in the $104 million lawsuit, filed today in U.S. District Court in Chicago, is well-known Chicago real estate developer Sean Conlon, who served on Broadway's board.
In the complaint, the Federal Deposit Insurance Corp. alleges that Demetris Giannoulias, who was Broadway's president and CEO beginning in 2006, and George Giannoulias, who was chairman of the board, along with other board members ignored regulatory warnings and approved “grossly imprudent” commercial real estate loans that resulted in millions in losses, which ultimately were borne by the FDIC when the bank failed.
The suit doesn't name Alexi Giannoulias as a defendant. Alexi Giannoulias was an officer at Broadway before getting elected Illinois treasurer in 2006.
The litigation long had been anticipated given the spectacular collapse of a bank that for years was the most profitable in the state and was a major political issue during Mr. Giannoulias' run for the Senate seat formerly held by President Barack Obama in 2010.
Bank of America, which does business with half the households in America, announced a dramatic shift Tuesday in how it does business with customers. One key change: Free checking, a mainstay of American banking in recent years, will be nearly unheard of.I said I wonder how these changes could affect the smaller banks, the neighborhood banks. Here it is:
"I've seen more regulation in last 30 months than in last 30 years," said Robert Hammer, CEO of RK Hammer, a bank advisory firm. "The bottom line for banks is shifting enormously, swiftly and deeply, and they're not going to sit by twiddling their thumbs. They're going to change."
In the last year, lawmakers in Washington have passed a range of new laws aimed at protecting bank customers from harsh fees, like the $35 charged to some Bank of America customers who overdrafted their account by buying something small like a Starbucks latte.
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So Moynihan ended overdraft charges on small debit card transactions. He says the rate of account closings have since dropped 27 percent.
To make up for lost fees, he also started thinking of new products. In August, the bank introduced a new "eBanking" account, where customers were offered a free checking account if they banked online. The catch: If they opt for paper statements, or want access to tellers for basic transactions, they would be charged a monthly fee of $8.95.
"Customers never had free checking accounts," Bank of America spokeswoman Anne Pace said. "They always paid for it in other ways, sometimes with penalty fees."
This article is worth a good read!Michael Moebs, the founder of Moebs Services, said it is now up to the smaller Main Street banks to see an opening and grab customers from the big banks.
"Free checking could become a mainstay of community banks and credit unions in the future," Moebs said.
