Continue reading Closing Bell: A 1,000 S&P scares the bears (AMZN, XOM, EXPE, GE, HOG, SYMC)

Closing Bell: A 1,000 S&P scares the bears (AMZN, XOM, EXPE, GE, HOG, SYMC) originally appeared on BloggingStocks on Thu, 30 Jul 2009 16:00:00 EST. Please see our terms for use of feeds.

The real elephant on the table is the fact that as it stands now, the largest banks are organized into bank holding companies, which stand outside current powers. Yes, at present the FDIC can move in and seize a bank, run it for a while before winding them down.The power to seize a major bank is so far not under FDIC authority. Under the Treasury's proposals, such authority would become law for what they call a "systemically important institution." Of course the key question is which banks would be termed "systemically important institutions."

Continue reading Will Congress pass new banking regulations this year?

Will Congress pass new banking regulations this year? originally appeared on BloggingStocks on Mon, 18 May 2009 16:40:00 EST. Please see our terms for use of feeds.

Continue reading House Speaker Pelosi wants 1933 style investigation of Wall Street

House Speaker Pelosi wants 1933 style investigation of Wall Street originally appeared on BloggingStocks on Wed, 22 Apr 2009 15:30:00 EST. Please see our terms for use of feeds.

We hear the name of Barney Frank quite often. He is Chairman of the House Financial Services Committee. His latest mantra is for more transparency in the recent bank "stress tests."

What is so hard to believe is how naive Barney Frank really is. Doesn't he know that we have an underground banking system that regulators do not even touch. The underground banking system is comprised of all the "off-the-books" transactions like CDSs, CDOs, CLOs and all means of convoluted deals that are losing money and do not even show up on "stress tests." For example, JP Morgan Chase & Co. (NYSE: JPM) is holding $87.7 trillion worth of CDSs somewhere off the books.

Continue reading Barney Frank doesn't get it: Stress tests are just the tip of the iceberg

Barney Frank doesn't get it: Stress tests are just the tip of the iceberg originally appeared on BloggingStocks on Thu, 16 Apr 2009 09:20:00 EST. Please see our terms for use of feeds.

According to a report today in The Wall Street Journal [subscription required], Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) -- those twin titans of mortgage mayhem -- are planning to dish out $210 million worth of retention bonuses over the next 18 months. James Lockhart, director of the Federal Housing Finance Agency, explained that $51 million in payouts were distributed in late 2008, with the rest of the bonuses to be disbursed through 2009 and into early 2010.

The news is already raising politicians' ire, since Fannie and Freddie are staying afloat only through the grace of government bailouts. The two lenders reported combined losses of roughly $108 billion in 2008, says the Journal, yet 80% of Freddie's employees and 61% of Fannie's payroll will score retention bonuses based on this bleak operating performance.

Continue reading Fannie Mae, Freddie Mac planning massive retention bonuses

Fannie Mae, Freddie Mac planning massive retention bonuses originally appeared on BloggingStocks on Fri, 03 Apr 2009 12:30:00 EST. Please see our terms for use of feeds.

This post was written by anonymous Minyanville contributor Minyan Peter.

Representative Barney Frank is reported to be recommending that $50 billion of TARP money be used to "alter" loans.

While the route may be circuitous and positioned as great for Joe Q. Public, I think it is important to recognize that the ultimate beneficiary is the banks.

Like the rumored tax carry-back benefit rumored on Monday, Representative Frank's proposal represents yet another potentially "non-dilutive" injection of additional government capital into the banks.

Given the United States' position as the global "capitalist" nation - and its symbolic importance in attracting global "entrepreneurial" capital, I expect that Congress will go through enormous (albeit often convoluted) steps to avoid the overt nationalization of the banking system that we are seeing in Germany and the UK.

This doesn't mean we won't see more marienette shows like yesterday's press conference with Citigroup, Inc. (NYSE: C) and the Senate, but given the public outrage to the government's overt bailout of the banks, going forward (if at all possible) I expect the means used will be far less obvious to the taxpayer.

Banks benefit from TARP originally appeared on BloggingStocks on Fri, 09 Jan 2009 17:45:00 EST. Please see our terms for use of feeds.

Today Congressman Barney Frank (D-MA) will grill the SEC on why it missed the $50 billion Madoff Securities Ponzi scheme. After all, over the last 16 years, the SEC investigated Madoff eight times and each of those times, it failed to discover the scam. This -- and so much more -- means it's time for a change in the way Washington regulates Wall Street.

And Frank is sure to use today's stage to talk. Last Monday, I appeared on a TV program in Boston "with" Frank. I put "with" in quotes because when Frank arrived at the TV studio, he made sure that me and any other guests who were to appear got thrown out of the green room so he could have it to himself. And while I was on the set with Frank -- I was scheduled to go on the show right after him -- he never even looked at me -- by contrast, every other person I have appeared with was happy to introduce themselves.

Frank likes to talk -- he used 25 of the 30 minutes (he was supposed to take up about 15 minutes). (And in the four minutes Frank left me, I gave out a few Bernie awards for the worst financial foibles of 2008.) So when he chairs hearings today, Frank will no doubt do quite a bit of talking. And he'll probably ask why the SEC officials failed to discover the Madoff scandal after receiving emails from a New York hedge fund that described his business practices as "highly unusual." As I posted, I think Frank should focus on the village that enabled Madoff.

Let's hope things get better this year.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing.

SEC is 0-8 on Madoff probes originally appeared on BloggingStocks on Mon, 05 Jan 2009 08:30:00 EST. Please see our terms for use of feeds.

Continue reading Should Congress fund a homeowners' refinance program after the bailout?

Should Congress fund a homeowners' refinance program after the bailout? originally appeared on BloggingStocks on Wed, 24 Sep 2008 18:30:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal's "Fund Track" reported that some banks struggling to raise capital may sell their money management units. National City Corporation (NYSE: NCC) is selling its Allegiant Funds, Fifth Third Bancorp (NASDAQ: FITB) is considering selling its Fifth Third Asset Management, and KeyCorp (NYSE: KEY) will possibly sell its Victory Capital Management unit.
• The Wall Street Journal also reported that Andrew Cuomo, the New York state Attorney General, is preparing to file civil securities-fraud charges against UBS AG (NYSE: UBS), possibly as early as this week. Sources said the lawsuit may include allegations of malfeasance by senior UBS executives.

• Bloomberg reported that money manager John Paulson, the owner of Paulson & Co., is launching a hedge fund that will provide capital to financial firms which have been damaged by the housing crisis. Paulson, who wants to open the fund by December, used bets against the U.S. housing market to help him earn $3.7B in 2007.
• After U.S. lawmakers reached a deal on legislation to alleviate the housing recession, the House of Representatives will today vote on a rescue plan for Fannie Mae -- Federal National Mortgage Association (NYSE: FNM) -- and Freddie Mac -- Federal Home Loan Mortgage Corporation (NYSE: FRE). Representative Barney Frank said that the package, which increases the likelihood Treasury Secretary Henry Paulson will get the authority to inject capital into the two, is "fully acceptable," Bloomberg reported.
• Oil trading losses forced SemGroup LP, which used to be America's 12th largest private company, to declare bankruptcy yesterday. Reuters noted that SemGroup LP's parent company is SemGroup Energy Partners LP (NASDAQ: SGLP).

Newspaper wrap-up: Some banks consider selling money management units originally appeared on BloggingStocks on Wed, 23 Jul 2008 08:50:00 EST. Please see our terms for use of feeds.

Democratic congressional leaders do not think the Fed's new mortgage rules go far enough and have indicated that they are considering taking power away from the Fed when it comes to protecting consumers, according to a story in today's Wall Street Journal. Senator Chris Dodd, Chairman of the Senate Banking Committee and one of the key leaders on this issue, told the Journal that the Fed's moves are a "clear signal that legislation is necessary to help protect homeowners from abusive and predatory lending practices." He also indicated that he is considering reexamining legislation he introduced last week to take power away from the central bank when it comes to consumer protection.

Rep. Barney Frank, who is chairman of the House Banking Committee, wasn't any happier with what he heard form the Fed. He told the Journal, "We now have confirmation of two facts we have known for some time. One, the Federal Reserve System is not a strong advocate for consumers, and two, there is no Santa Claus. People who are surprised by the one are presumably surprised by the other."

Bankers, seeing the writing on the wall and hoping that the Fed's changes will pacify critics, primarily supported the new rules. According to the Journal, the American Financial Services Association called the Fed's rules "measured" and the Independent Community Bankers of America said it was "an important step." But, the powerful American Bankers Association still hopes it can sway the Fed to ease the rules. It said some parts of the proposal were too rigid and "could make it harder for bankers to tailor products for their customers."

Continue reading Lawmakers hostile toward Fed's new mortgage rules

Lawmakers hostile toward Fed's new mortgage rules originally appeared on BloggingStocks on Wed, 19 Dec 2007 09:28:00 EST. Please see our terms for use of feeds.

Poker fans rejoice! House Financial Services Committee Chairman, Barney Frank, introduced a bill on Thursday that would allow Americans to gamble online once again. The bill would allow online gambling companies to apply for licenses to accept bets from U.S. citizens. Frank referred to the ban on gambling as "an inappropriate interference on the personal freedom of Americans" and called internet gambling a victimless crime. The WTO has previously declared the U.S. ban illegal.

Congratulations to Mr. Frank for standing up on this issue. I will give a piece of pie to anyone who can make a compelling case as to why it isn't hypocritical for states to offer lotteries while simultaneously cracking down on people who play online poker. How can you muster up moral outrage when you're selling the same product? This is like Hostess accusing McDonald's of marketing unhealthy foods.

If you're a political junkie closely following this issue and counting probable votes, here are a couple stocks that could be affected:

Cryptologic (NASDAQ: CRYP) - This company provides the software platforms for numerous online gambling ventures. The stock took a beating when Americans were banned from internet gambling, but has since recovered and is close to its 52-week high.

World Poker Tour Enterprises (NASDAQ: WPTE) - This company produces the World Poker Tour Series on the Travel Channel (soon to be moving to the Game Show Network) and also operates an online gambling site. While the company hasn't targeted U.S. consumers in the past, that could possibly change.

The return of online gambling? originally appeared on BloggingStocks on Fri, 27 Apr 2007 14:18:00 EST. Please see our terms for use of feeds.