On Thursday, the Federal Deposit Insurance Corp. (FDIC) is expected to propose new guidelines for private-equity investors seeking to buy failed banks. Those guidelines are intended to ensure that these largely unregulated firms don't take too many risks with troubled banks or buy and flip them.

The new rules come as private-equity firms have grown increasingly active in the banking sector. FDIC Chairman Sheila Bair said she's comfortable with the private-equity deals the agency has struck for failed banks such as IndyMac and BankUnited, but that a more structured process needs to be put in place.

Continue reading New rules for buying failed banks may deter investors

New rules for buying failed banks may deter investors originally appeared on BloggingStocks on Wed, 01 Jul 2009 17:10:00 EST. Please see our terms for use of feeds.

A few weeks ago Dodd's Senate banking committee held hearings on the need for regulation of the financial industry. Present were 10 regulators each from one of 10 different regulatory bodies. Dodd commented: "the picture of 10 people was the picture of the problem."

So it seems that we have too many regulators, none of whom were able to individually or collectively deal with the recent financial debacle. Now lawmakers are trying to figure out what to do and how to do it. Obviously there will be fierce power struggles among the existing agencies. Hal Scott, professor at Harvard University said: "its grown topsy turvy since the civil war driven by a reaction of events -- the turf was where industry always wants its own regulator that they can be more comfortable with."

Continue reading Politicians and bank regulators will battle over turf and powers

Politicians and bank regulators will battle over turf and powers originally appeared on BloggingStocks on Fri, 29 May 2009 17:00:00 EST. Please see our terms for use of feeds.

Did the FDIC give away IndyMac? originally appeared on BloggingStocks on Mon, 05 Jan 2009 10:30:00 EST. Please see our terms for use of feeds.

From TheStreet.com Network

• Failed IndyMac Sells for $13.9 Billion
• Coming Week: New Year, Same Problems?

Continue reading Cramer on BloggingStocks: Mnuchin deal for IndyMac is a great sign

Cramer on BloggingStocks: Mnuchin deal for IndyMac is a great sign originally appeared on BloggingStocks on Mon, 05 Jan 2009 09:00:00 EST. Please see our terms for use of feeds.

July 14 -- Dow 11,055 (down 45 points); trading range, 327 points

The third-largest bank failure in U.S. history made headlines after IndyMac Bancorp collapsed following a run on the bank.

An FDIC takeover of IndyMac attempted to keep operations as normal as possible, but doubts began to arise about other troubled regionals like Washington Mutual (later sold to JPMorgan Chase) and National City (now a part of PNC Financial after an October "take-under," where the company was purchased at a discount to its stock value).

But wait, there's more. After years of financial shenanigans and controversy, Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) were placed into conservatorship in a federal takeover of the government sponsored enterprises. This contributed to another slaughter in the financials, with 96% of the sector posting a loss for the session.

Oh, and if you wanted to drown your sorrows over an American-owned brew, scratch Budweiser off your list. Anheuser-Busch agreed to merge with Belgium's InBev for $70 a share, or $52 billion.

Greg Tucker is the executive editor of OptionsZone.com.

10 craziest days on Wall Street in 2008: #10 Saving our Fannie (and Freddie) originally appeared on BloggingStocks on Sat, 03 Jan 2009 10:00:00 EST. Please see our terms for use of feeds.

Continue reading FDIC may have to add cash to replenish insurance fund

FDIC may have to add cash to replenish insurance fund originally appeared on BloggingStocks on Mon, 11 Aug 2008 10:25:00 EST. Please see our terms for use of feeds.

• IndyMac Bancorp., seized on July 11 -- a Friday.
• 1st National Bank of Nevada and First Heritage Bank, both seized on July 25 -- another Friday
• And on Aug. 1, First Priority Bank of Bradenton, Fla., seized on -- you guessed it -- a Friday.

Friday is D-Day for bank seizures originally appeared on BloggingStocks on Thu, 07 Aug 2008 13:50:00 EST. Please see our terms for use of feeds.

Last week, our country suffered its second biggest bank failure in history. But since it was an FDIC insured institution, this means that depositors had nothing to worry about as long as they had less than $100,000 in each account, right?

Well, that's what I thought when I heard that $32 billion IndyMac had failed. But a commenter on my Auction Rate Securities (ARS) post -- which now has 5,235 comments from people whose money is frozen -- told a chilling story with implications for everyone who keeps money at a bank.

As he said, "I've spent the past 3 days waiting outside an IndyMac branch. it was utter chaos. some people had funds that mysteriously disappeared from the IndyMac computer logs. (under 100 grand). bumbling FDIC officials, depositors fighting, people passing out from the heat, elderly folks collapsing when they realize their life savings were not insured...and even those who had under 100 grand are having some difficulty getting other institutions to accept the IndyMac checks."

If you have deposits in a bank that looks like it's in trouble, get your money out before the FDIC takes it over. Do you really want to spend three days waiting in line to access your cash? As the commenter advised: "While you may be within the insured limits at your bank, like i was, you still want to avoid banks that are in trouble. It's not worth the hassle."

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Continue reading IndyMac depositors faint when they discover they can't get their money

IndyMac depositors faint when they discover they can't get their money originally appeared on BloggingStocks on Thu, 17 Jul 2008 20:06:00 EST. Please see our terms for use of feeds.

When Countrywide fell apart, the government moved in and began to examine the company's loan practices for fraud. Perhaps history is repeating itself. The FBI has set up an office at IndyMac (OTC: IDMC) to investigate whether its loan practices were above board.

According to The Wall Street Journal, "Failed lender IndyMac Bank is among nearly two dozen banks under scrutiny by the Federal Bureau of Investigation for possible mortgage fraud." Both the media and the bank were thin on details, very thin.

The matter, and questions at Countrywide, raise the issue of where regulators were when these firms operating as normal, standalone businesses making hundreds of thousand of home loans each year. Consumers are not terribly well-served if the FBI or any other government agency gets into the act once all of the damage has been done.

If the FBI finds any wrong-doing, what then? Is there a way to make reparations to people who may have lost their home or paid mortgage rates and additional fees which were much too high? Management at some of these lending operations may get into trouble, but the victims are unlikely to be helped.

Douglas A. McIntyre is an editor at 247wallst.com.

Fraud at IndyMac? originally appeared on BloggingStocks on Thu, 17 Jul 2008 03:57:00 EST. Please see our terms for use of feeds.

Last week, the FDIC oversaw the second biggest bank failure in U.S. history -- $32 billion IndyMac Bancorp (NYSE: IMB). I thought more would be on the way and this morning's New York Times estimates that 150 of the 7,500 U.S. banks will fail in the next 12 to 18 months. The FDIC only has $53 billion in its fund to cover bank failures so it is going to be needing much more cash, which it may get from raising insurance rates. No doubt those of us with bank accounts will pay the price.

For those looking to profit from this failure, it's time to get a hold of the FDIC's problem bank list and start estimating the ones that are most likely to get taken over. Here are some hints: look at their mortgages as a percent of total loans, their cash flow, when they have to pay back their debt, and the increase in the rate of their bad loans. The Times mentions two that are probably already on the radar of short sellers:

• BankUnited Financial Corporation (NASDAQ: BKUNA) in Florida, which trades at 77 cents a share and is probably too far gone to profit from as a short, went for $20 a share a year ago.
• Downey Financial Corporation (NYSE: DSL) in California, which trades at $1.69 today, traded at $65 a year ago.

Continue reading Profiting from the 150 banks that will fail next?

Profiting from the 150 banks that will fail next? originally appeared on BloggingStocks on Mon, 14 Jul 2008 12:37:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that worries are deepening among regulators, executives and consumers about the U.S. banking industry following the federal government's seizure of IndyMac Bancorp Inc (NYSE: IMB).
• According to a person familiar with the situation, the Wall Street Journal reported that Banco Santander SA (NYSE: STD) is nearing an agreement to buy Alliance & Leicester for around $2.38B.

• Yahoo! Inc (NASDAQ: YHOO) chairman Roy Bostock called Microsoft Corporation's (NASDAQ: MSFT) proposal "ludicrous". Bostock said that "while this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders." Yahoo reaffirmed that it is open to a sale of the company for $33 a share, the New York Times reported.

• CNet reported that the price of the Xbox 360 Pro model with a 20GB hard drive was cut by Microsoft to $299 from $349. The company also introduced introduced a 60GB model to go on sale in the U.S. and Canada in August for $349.

Newspaper wrap-up: Santander nears agreement to acquire Alliance & Leicester originally appeared on BloggingStocks on Mon, 14 Jul 2008 08:00:00 EST. Please see our terms for use of feeds.

After the implosion of IndyMac Bancorp (NYSE: IMB) and news of the deterioration of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) last week, there's bound to be a certain level of trepidation as the earnings crunch begins this coming week and many big financial companies report. Here's a look at what Wall Street was expecting (see The week in preview: Expectations as the earnings crunch begins for expectations of other reporting companies.)

Analysts surveyed by Thomson Financial are expecting the following of companies to report lower earnings when compared to the same period of the previous year.

• JPMorgan Chase & Co. (NYSE: JPM): 44 cents EPS (-63.3%) on sales of $16.4 billion (-13.2%)
• Comerica Inc. (NYSE: CMA): 51 cents EPS (-59.2%) on sales of $680.2 million (-7.3%)
• Zions Bancorp. (NYSE: ZION): 75 cents EPS (-47.6%) on sales of $627.3. million (+2.7%)
• Huntington Bancshares Inc. (NYSE: HBAN): 23 cents EPS (-32.4%) on sales of $617.1 million (+50.7%)
• Capital One Financial Corp. (NYSE: COF): $1.31 EPS (-30.7%) on sales of $4.4 billion (+7.8%)
• Wells Fargo & Co. (NYSE: WFC): 50 cents EPS (-25.4%) on sales of $10.7 billion (+7.7%)
• M&T Bank Corp. (NYSE: MTB): $1.50 EPS (-23.1%) on sales of $756.6 million (+1.6%)
• BB&T Corp. (NYSE: BBT): 69 cents EPS (-16.9%) on sales of $1.8 billion (+5.9%)
• U.S. Bancorp (NYSE: USB): 60 cents EPS (-7.7%) on sales of $3.8 billion (+8.3%)
• PNC Financial Services Group Inc. (NYSE: PNC): $1.16 EPS (-7.2%) on sales of $1.9 billion (+8.5%)

Continue reading Financials expected to post earnings declines, losses this week

Financials expected to post earnings declines, losses this week originally appeared on BloggingStocks on Sun, 13 Jul 2008 12:40:00 EST. Please see our terms for use of feeds.

I've lived through the internet bubble (and have some scars) and tried to avoid the real estate bubble (it wasn't easy). But, bubbles have a way of being painful and longlasting.

So, no doubt, the real estate bubble has been painful (may be the worst market for at least the past 50 years). But, could this be a short-run thing?

Perhaps so. In fact, this is the view from the front-cover piece in this week's Barron's [a paid publication]. Actually, there may be the start of a real estate recovery by the end of this year.

This is certainly a controversial stand. Keep in mind that inventory levels are stubbornly high (helped by foreclosures) and housing prices seem to fall further and further. What's more, the credit crunch is still here and there are serious problems with major real estate operators, such as with the implosion of IndyMac Bancorp (NYSE: IMB), as well as the deterioration of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).

OK, so why the optimism? Well, if you peel back some of the recent housing data, it appears that things are stabilizing in terms of home sales and inventories. Basically, market forces are making the necessary adjustments.

Continue reading Barron's: Real estate poised for the giddy days again?

Barron's: Real estate poised for the giddy days again? originally appeared on BloggingStocks on Sat, 12 Jul 2008 14:40:00 EST. Please see our terms for use of feeds.

TheStreet.com's Jim Cramer says both oil futures and equity futures can move these hot issues.

Will the futures pull down the oil and gas stocks today? No, I don't mean the oil futures, I mean the equity futur

Last week when oil exploded, we caught two days of trading that dropped the stocks hard. We caught a bit of a bid in the nat gases like Chesapeake (NYSE:CHK) and Devon (NYSE:DVN) but at the end of the day, but the stocks were truly overwhelmed by the simple fact that they are in the indices.

This pattern has really held down the integrateds: last week Conoco (NYSE:COP) should have exploded, but it couldn't because it is such a big part of the S&P. Chevron (NYSE:CVX) and Exxon (NYSE: XOM) are no different.

The natural gas stocks are not as big a factor, but they can be rocked down without a problem.

I am not saying to avoid looking at the oil futures. They can control the stocks. I am saying that the equity futures tide can take down anything, even when the oil futures spike hard.

Continue reading Cramer on BloggingStocks: Oil, Gas Stocks in a Tug of War

Cramer on BloggingStocks: Oil, Gas Stocks in a Tug of War originally appeared on BloggingStocks on Tue, 01 Jul 2008 09:48:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: Things aren't so bad

Cramer on BloggingStocks: Things aren't so bad originally appeared on BloggingStocks on Mon, 02 Jun 2008 10:22:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Applied Materials Inc. (NASDAQ: AMAT) Q2 profits declined on a glut of flash memory chips.
• Bally Technologies Inc. (NYSE: BYI) beat Q3 expectations and offered full-year guidance.
• Barclay's (NYSE: BCS) reported a big Q1 loss on credit-related write-downs.
• Constant Contact Inc. (NASDAQ: CTCT) saw big increases in Q1 revenues and in its customer base.
• Deere & Co. (NYSE: DE) Q2 profits rose on international demand, but results just missed estimates.
• Fluor Corp.'s (NYSE: FLR) strong Q1 results are a signal for the energy sector, says Jim Cramer.
• Freddie Mac (NYSE: FRE) Q1 loss widened on the housing slump, but not as much as forecast.
• IndyMac Bancorp Inc. (NYSE: IMB) narrowed its loss but predicted it wouldn't see a profit in 2008.
• LDK Solar Co. Ltd. (NYSE: LDK) Q1 earnings topped forecasts and it raised its outlook.
• MBIA Inc. (NYSE: MBI) reported a larger-than-expected Q1 loss due to write-downs.
• Mindray Medical International Ltd. (NYSE: MR) beat Q1 expectations and raised its full-year guidance.
• Nuance Communications Inc. (NASDAQ: NUAN) Q2 earnings were in line with analysts' expectations.
• ON Semiconductor Corp. (NASDAQ: ONNN) beat Q1 expectations and raised its Q2 revenue forecast.
• RealNetworks Inc. (NASDAQ: RNWK) beat Q1 estimates and announced share buybacks and a spin off.
• Salary.com Inc. (NASDAQ: SLRY) missed Q1 forecasts, leading to analysts' downgrades.
• Sykes Enterprises Inc. (NASDAQ: SYKE) beat Q1 estimates and raised its Q2 and full-year forecast.
• Syniverse Holdings Inc. (NYSE: SVR) beat Q1 expectations on strength in "messaging and mobil data."
• Toll Brothers Inc. (NYSE: TOL) warned of lower Q2 profits and more "challenging times" ahead.
• Website Pros Inc. (NASDAQ: WSPI) reported flat earnings despite soaring revenues and operating income.

Continue reading Earnings highlights: Deere, Freddie Mac, Applied Materials, Barclay's and others

Earnings highlights: Deere, Freddie Mac, Applied Materials, Barclay's and others originally appeared on BloggingStocks on Sat, 17 May 2008 16:10:00 EST. Please see our terms for use of feeds.

We keep coming close to losing these companies that are fighting for their lives.

Yesterday we had First Marblehead (NYSE: FMD) (Cramer's Take) on student loans.

Is CIT (NYSE: CIT) (Cramer's Take) next with its student loan portfolio (as opposed to its mobile home portfolio and its subprime portfolio...sheesh!)?

We obviously had a giant problem with MBIA (NYSE: MBI) (Cramer's Take) over the amount of capital it needs to raise. Will it have to raise capital and cut the dividend?

Continue reading Cramer on BloggingStocks: More lenders on life support

Cramer on BloggingStocks: More lenders on life support originally appeared on BloggingStocks on Thu, 06 Dec 2007 09:00:00 EST. Please see our terms for use of feeds.

Round up the usual suspects: Radian (NYSE: RDN) (Cramer's Take) - MBIA (NYSE: MBI) (Cramer's Take) - MGIC (NYSE: MTG) (Cramer's Take) - Ambac (NYSE: ABK) (Cramer's Take) - PMI (NYSE: PMI) (Cramer's Take).

Throw in walking dead ACA Capital (NYSE: ACA) (Cramer's Take) and Security Capital (NYSE: SCA) (Cramer's Take), and I think you produce what is really wrong with this market.

Anybody who takes even a casual look at the October delinquencies knows that these companies are going to be severely capital-challenged. Meanwhile, value guys like Third Avenue Management (Radian) and fellow travelers (Old Republic and PMI) make Pyrrhic stands and engender short squeezes that are mistakenly not used to recapitalize. And outfits from E*Trade (NASDAQ: ETFC) (Cramer's Take) to Fannie Mae (NYSE: FNM) (Cramer's Take) are left holding the bag on this stuff.

Continue reading Cramer on BloggingStocks: Don't ignore the mortgage insurers

Cramer on BloggingStocks: Don't ignore the mortgage insurers originally appeared on BloggingStocks on Tue, 20 Nov 2007 09:01:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Lehman downgraded the mortgage finance sector to Negative from Neutral citing the potential of over $100B in losses for the group in the coming years. Washington Mutual (NYSE: WM) was downgraded to Equal Weight from Overweight; IndyMac Bancorp (NYSE: IMB) and Countrywide Financial Corporation (NYSE: CFC) were downgraded to Underweight from Equal Weight.
  
• Applebee's International (NASDAQ: APPB) was downgraded to Underperform from Market Perform at Wachovia, as the firm sees potential downside risk if the company's acquisition of IHOP Corp (NYSE: IHP) does not go through, following mixed reviews from Proxy firms.
  
• Merriman downgraded shares of Fuel-Tech (NASDAQ: FTEK) to Sell from Neutral after channel checks indicated the competitive landscape is much more challenging than commonly perceived for the FUEL CHEM product line. Merriman sees significant risk to shares at current levels.
  
• Citigroup downgraded shares of BHP Billiton (NYSE: BHP), Anglo American (NASDAQ: AAUK) and Rio Tinto (NYSE: RTP) to Hold from Buy on valuation following the recent rally.

• Lehman downgraded the specialty finance sector to Neutral from Positive; the firm downgraded American Express Company (NYSE: AXP), Capital One Financial Corporation (NYSE: COF) and Discover Financial Services (NYSE: DFS) to Equal Weight from Overweight.
  
• Lululemon Athletica (NASDAQ: LULU) was downgraded to Neutral from Buy at Goldman Sachs.
  
• JP Morgan downgraded Dollar Tree Stores (NASDAQ: DLTR) to Underweight from Neutral.
  
• Angiotech Pharmaceuticals (NASDAQ: ANPI) was downgraded to Sector Performer from Sector Outperformer at CIBC and to Sector Perform from Outperform at RBC Capital.

Analyst downgrades: Mortgage finance sector, APPB, FTEK, BHP, AAUK and RTP originally appeared on BloggingStocks on Mon, 22 Oct 2007 10:45:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• In December, Siemens AG (NYSE: SI) disclosed questionable transactions in its telecom and power generation businesses totaling about $600M. Now that figure is estimated to be about four times that, according to the Wall Street Journal.
• Microsoft Corporation's (NASDAQ: MSFT) new video game Halo 3 has generated about $170M in sales on the first day, according to the Wall Street Journal, setting a new record in the games industry.
• Hedge fund Citadel Investment has disclosed it now owns 2.6M shares of Zale Corporation (NYSE: ZLC) for a 5.3 % stake in the company, or more than three times Citadel's position when it was last disclosed on June 30, reported Barron's Online's "Inside Scoop" column.
• The Financial Times reported that Google Inc (NASDAQ: GOOG) is planning to expand it's staff by 33%, with most of the hiring in Europe.

• A U.S. senator is asking Medtronic Inc (NYSE: MDT) to explain payments the company has allegedly made to doctors, reported the New York Times.

• According to multiple sources, IndyMac Bancorp (NYSE: IMB) has started downsizing its mortgage operations by offering voluntary severance packages to an undisclosed number of employees, reported TheTruthAboutMortgage.com.

Newspaper wrap-up: Microsoft's Halo 3 sets record originally appeared on BloggingStocks on Thu, 27 Sep 2007 09:00:00 EST. Please see our terms for use of feeds.