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Genesis Posts: 71379 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1352-W....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-08-20 07:58:04
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Karlmarxghost Posts: 2633 Incept: 2009-01-26 
Stealing Your Property
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 Well I guess no surprises here you have been talking about the "extend and pretend" and this is just solid proof of it. I'm starting to believe a bank holiday is imminent that the extend and pretend will fail. Ponze schemes never last, never, ask Madoff. They are trying like hell to reinflate another bubble to make it all work and the bubble is not coming. The middle class is tapped and their credit destroyed so even if they did want to borrow they cant. Green shoots? Nope green ****s and they are coming... ---------- My views are my view and mine alone. Karl or ticker forum does not endorse or necessarily agree with my views. DO not trade on my views or take them personally.
2009-08-20 08:12:15
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Quillbill Posts: 125 Incept: 2009-06-23
Quad City Area
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Two days ago the CEO for BB&T was on CNBC and looked into the camera and told the world that this was the deal they got. When asked if he felt guilty about taking tax payer money, he said the FDIC is not funded by taxpayers but his peers, and he was one of those peers. He bragged that BB&T exposure at maximum was 500,000,000 if the ENTIRE portfolio of Colonial collapsed. He reccomended and RTC ressurection so the FDIC would not have to use tax money when they blew thru the remaining 14 billion they had on this transaction. He ADMITTED the FDIC was under water here. And all that was said....WOW you got a great deal. He laid it out, and was not called out. ---------- US Census Results By City/State: Chicago, Illinois: Population: ****ed Los Angelas, Ca : Population: ****ed (but Stoned) Detroit, Michigan: Population: N/A (No Forwarding Address)
2009-08-20 08:17:16
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Aliveh Posts: 2610 Incept: 2008-01-18 
Los Angeles Online
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Quill, not disagreeing, if the BB&T guy really said that it is disengenuous. But, FWIW, very typical structure for FDIC-assisted takeover. I've seen the 80/20 loss share on first x and 95/5 loss share on next x dollars in at least 2 other deals. Genesis you say "As you can see from the above the entire covered portfolio, some $14 billion in assets, could be charged off (that is worth zero!) and BB&T would eat nothing. The FDIC would eat it all. " I don't read it exactly like that. First they write it down to those really impaired levels: 37% on blended basis. Then, from those levels it is 80/20 loss share on first $5 B so BB&T would eat $1 B and FDIC $4 B; then 95/5 thereafter so basically FDIC eats rest. That's my understanding. Also, BB&T says $5 B of expected credit losses and they are only raising $750 mm, so basically admitting they expect to eat $1 B and want shareholders to pitch in with $750 mm. Something doesn't jive here. That's my read on it, but I might be wrong.
2009-08-20 08:47:45
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Danno Posts: 37 Incept: 2009-06-11 midwest us
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Given the magnitude of those write-downs and the FDIC's agreement to "share" (i.e., absorb the majority) of the losses, how can the FDIC credibly state that its expected loss on the Colonial failure is only $2.8 billion?
2009-08-20 09:15:30
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Bagbalm Posts: 979 Incept: 2009-03-19
Just North of Detroit
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How did they all come to be crooks? Was it little by little or was it like our public schools being turned into indoctrination centers? Did somebody get to the business schools and teach pillage and burn?
2009-08-20 09:16:25
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Themortgagedude Posts: 3929 Incept: 2007-12-17
saint louis
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Well if BB&T says Colonials assets are worth that - what do they have the same type of asset on their books valued at? BB&T is also on my short to zero candidate list FWIW. ---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2009-08-20 09:16:59
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Themortgagedude Posts: 3929 Incept: 2007-12-17
saint louis
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1.568 budget deficit per Erin Burnett for 09. Cause they have decided not to fund FDIC until 2010 I guess. Cause that is gonna be a huge chunk of change.
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2009-08-20 09:21:39
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Templar223 Posts: 397 Incept: 2008-04-28
Champaign, IL Online
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Quote:Let's go through it. Its a good deal for BB&T, as one would expect (someone had to be basically bribed to that this trash -and boy, was it trash!) Typo I believe. John ETA: Upon finishing reading your ticker, I'm wondering if it's time I should withdraw everything except about $100 from all of my accounts. This is bull****. Banks are insolvent. And so is the FDIC. To make matters worse, FDIC is going to hit 'healthy' banks with another surcharge? Jesus H. They're all about as ****ed as we are... the ones that aren't "too big to fail." At least unless and until the US Gov can't or won't backstop them. John Last modified:
2009-08-20 09:40:07 by templar223
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Templar223 Posts: 397 Incept: 2008-04-28
Champaign, IL Online
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What are the odds of a bank closure holiday? John
2009-08-20 09:41:31
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Guyfawkes Posts: 352 Incept: 2008-09-19 Texas
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Themortgagedude wrote..1.568 budget deficit per Erin Burnett for 09. Cause they have decided not to fund FDIC until 2010 I guess. Cause that is gonna be a huge chunk of change. EXACTLY. The Federal FY ends in September, right? Just "move" that ~$280B "savings" into NEXT YEAR's expenses......which start in just a few weeks if September is the new FY. Mark Haines didn't even mention something about it - I was surprised by that. He let Erin go on and on about "reduced deficit for 2009" b/c the TARP $$$ wouldn't be needed by the FDIC in '09. ---------- It's still "We, the People".....right?
2009-08-20 09:49:26
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Sigmaseek Posts: 7 Incept: 2009-05-08
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Quote:How did they all come to be crooks? Was it little by little or was it like our public schools being turned into indoctrination centers? Did somebody get to the business schools and teach pillage and burn? This is exactly what is taught in MBA schools. Find a way to strengthen your position at the expense of disinterested or ignorant others (usually taxpayers or shareholders). Limit competition by lobbying paid off legislators. Executives are taught to pillage a company for what they can get out of it in order to strengthen their own financial position. Infiltrate the C-suite to fill other C-suites with other MBA types with the same agenda to maximize bonus payouts at every firm. It is social darwinism at its highest level, otherwise known as combat economics.
2009-08-20 09:50:24
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Torgo Posts: 389 Incept: 2009-01-14
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I agree: WTF? WTF am I doing slaving away, working for the man, when I should have just created a "bank" and gave out loans to anybody and everybody, collected huge bonuses and just walked away while someone else cleaned up the mess.
2009-08-20 09:52:41
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Charvo Posts: 219 Incept: 2008-01-21
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I was thinking about the potential for the bank holiday. The only way a bank holiday would happen is if there are numerous bank runs happening simultaneously at these zombie banks. Who in their right mind would keep their money at a zombie bank when the FDIC is essentially bankrupt? With the end of the quarter approaching, many auditors will be working overtime combing over the loan portfolios of these banks. What if the auditors find out these loan portfolios are severely handicapped and don't jive at all with the banks' books? Financial information gets leaked out all the time. It could get bad in October. I think a bank holiday would result in Bob Chapman's armaggeddon for the dollar since the Fed would have to step in with some massive cash.
2009-08-20 09:53:23
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Lucky Posts: 345 Incept: 2009-02-07
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"How in the hell does a bank get to the point where its construction loans have a real markdown of 67% from par (!)," I take it economic prospects are looking dim-to-grim?! "Regulatory agencies that have looked the other way and allowed massive, pernicious and pervasive control fraud and overstatement of valuations continue to create huge losses for the FDIC and the system as a whole." "Credit intermediation CANNOT NORMALIZE until this is STOPPED." "too disruptive.": To them. This is their endgame, ladies and gents: one last gamble to profit, risking sovereign default and loss of reserve currency status ... one last gamble .. ---------- Now it appears the 'goal' is no longer to defeat communism. The goal now appears to rabidly loot, and has entered a new desperate phase where the utilization of slave labor for mercantilist gain has extended to bankruptcy for profit, and the stealing of the meager savings of the slaves themselves.
2009-08-20 10:57:10
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Lucky Posts: 345 Incept: 2009-02-07
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pillage and burn? " ... otherwise known as combat economics." Sigma We evidently have combat prosecution also. As in, where the **** is it?! Don't tell me, this is what "a nation of cowards" deserves? Eric Holder version. Sounds like a fair money bet. ---------- Now it appears the 'goal' is no longer to defeat communism. The goal now appears to rabidly loot, and has entered a new desperate phase where the utilization of slave labor for mercantilist gain has extended to bankruptcy for profit, and the stealing of the meager savings of the slaves themselves.
2009-08-20 11:04:34
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Centurion Posts: 76 Incept: 2009-05-14 DFW
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My admittedly uneducated view of the situation after reading all of this?? Bank of Sealy (aka the citizen equivalent of yesterday's treasury bill auction) all the way. Better a 0% loss and 0% gain than taking a bath in an FDIC meltdown over the next quarter. ---------- - If you're not being shot at, it's not a high stress job. - The right to self-defence is THE basic human right. - No, I don't know everything .... I'm just REALLY good with Google. - Trying not to be a tinfoil guy. But can you really blame me after the actions of Fed & Treas?
2009-08-20 11:08:42
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Cawoodruff Posts: 55 Incept: 2008-04-17
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Gen, Typo alert "This is an absolute outrage. How in the hell does a bank get to the point where its construction loans have a real markdown of 67% from par (!), its commercial property loans have a write-down of more than 30% from par, home equity is impaired by 21% and other mortgage loans are impaired by 18%, or 37% on a blended basis, radically exceeding the bank's capitalization, and yet this institution was not seized MONTHS AGO." If you look at the slide the construction mark down is 33% they are sayin that the current value on the loan is 67% of face value. note this makes residental and other realy bad with markdowns of 79% and 92%. the total mark down is 63%. Chris
2009-08-20 11:28:05
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Praedor Posts: 41 Incept: 2009-01-06
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Quote:Did somebody get to the business schools and teach pillage and burn? This is precisely what has happened...so long as your business school fell for the Chicago School line. ---------- The ugly truth is that economics is a science in the way that medicine was a profession while it still used leeches to balance a person's vapours. Yes, some are always better than others, and certainly more entertaining, but they all tended to kill their patients. — Jesse of Le Café Américain
2009-08-20 11:58:14
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Mortgageguymn Posts: 181 Incept: 2009-03-09
North Coast
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What I heard on NPR last evening was that the BB&T/Colonial forced "merger" was unique in that for the first time, the FDIC demanded a "clawback", so that if BB&T made too much money (if the Colonial assets had been too deeply discounted, I guess), then BB&T would have to pay back a small portion of the excess profit. Riiiiiiight.... Reminds me of how we're going to make all sorts of money from the TARP... There will, of course, be no money going back to the FDIC from any "clawback". They just put that in the contract to make it look like we might have a windfall. Of course NPR fell for it. As un unrelated aside, NPR's "chief economic correspondent", Chris Farrell (who was not involved in the BB&T story), is an idiot IMO.
---------- "Neither a borrower nor a lender be." - Harold Hecuba
2009-08-20 12:26:57
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Sushihorn Posts: 6079 Incept: 2007-10-22
Arlington, TX Online
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The new Federal FY starts October 1. Bagbalm The corruption was gradual and the process assisted and accelerated by the bubble. Anyone who was "too conservative" (i.e. stuck to traditional lending standards) got run over by the retard fog a mirror lenders. The (mostly) fake profits from this lending drove the stocks and bonuses higher while the boards of more prudent institutions looked on with envy. If it had gone on only a year or two before the idiots got their comeuppance then it would not have been so bad but this went on for many years, with a slight interruption from 2000-02. The extended bubble caused people to believe that the asset price boom was permanent. We've already seen how lenders reacted to this. The consequences WITHIN the lending world were disastrous. One of the following happened to the conservative banks: 1) board fires prudent executives and hires a more "aggressive" replacement - bank becomes another retard lender 2) board sticks to its guns and keeps the prudent execs a) stock price lags allowing retard lender to buy them with inflated stock - absorbed into retard lender b) they are bought by private equity and converted into a retard lender c) the limp along as an independent, prudent institution and are now denied the fruits of prudence by propped up asset prices and special FDIC assessments ---------- http://jengafinance.blogspot.com/ Stop the looting. Start prosecuting. Do it soon. Or folks may start shooting.
2009-08-20 12:48:03
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Muscleknight Posts: 2786 Incept: 2007-06-26 Columbia, SC Online
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Isn't this price discovery and what the banks have been trying to avoid? If so since there is now a marked price on some toxic waste won't other banks have to mark their waste the same way?
---------- My Financial Avatars - http://s677.photobucket.com/albums/vv131.... The best lies have elements of truth. If my uncle jack helped you off an elephant, would you help my uncle jack off an elephant? Yesterday's Tinfoil is Today's news
2009-08-20 13:50:42
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Spigot Posts: 109 Incept: 2009-03-02
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Considering that politics is a matter of getting "some thing" done vs, the " right thing" or the "best thing" done...then this is politics, not finance, in practice. In effect if they take each bank unit and let if fail with massive losses, then force a suitor to buy it at steep discounts and lay off the rest of the liabilities to the US government (taxpayers) via whatever vehicle, such as the FDIC, PIC, etc) then they have managed the situation as a controlled implosion (building demolition within a crowded city-scape), spreading the damage out over decades, possibly. Or at least that may be their hope. That may be their thinking...or not. No, it does not re-establish the trust necessary to re-establish a functioning credit based system. Not justifying the approach, just speculating.
2009-08-20 15:22:46
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Spigot Posts: 109 Incept: 2009-03-02
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I would add that if the entire infrastructure of credit were to freeze up then the outcome might simply be starvation of a large number of people in the US and globally. Why? Because basic food stuffs such as wheat,corn,soybeans,etc would sit in warehouses, not being shipped to processors, nor from processors to product distributors. Oil would not be pumped, refined or distributed. Unless there was cash to cover the costs to the holders of those basics. In the above scenario the system would lock, possibly for months while 'leaders' tried to cobble together some semblence of a basic credit system. Prices would collapse for most things, which would mean holders of those things could not cover their costs, so would/could not sell at those prices. Meanwhile people would be without food after about 2-3 days and no fuel either. Just running through the scenario here which may have played out or could in the future play out. Either way we are a few keystrokes away from lock up on any given day, which should scare the living sh!t out of anyone with "half a brain".
2009-08-20 15:31:50
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Rocketshoe Posts: 439 Incept: 2007-09-07
Los Angeles
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This tells me that the TPTB will fight to the end to support this madness with free taxpayer money to the bitter end. At some point, everything will go Boom! overnight when math takes over. I'm trying to predict when, but I think it will happen some random morning in a 1987-like, rattle the windows, circuit-breaker fashion where everyone on the NYSE floor ****s their pants at the same time. Good times. I'm going to get a vasectomy this weekend so no one else has to suffer through this horse****.
2009-08-20 17:51:53
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