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Archive for December 20, 2009

Linkfest (December 20, 2009)

December 20, 2009 1 comment

In other news..

Another Chance for Small Business Loans? Seriously, why would the banks care about the real economy when they can make the government bail them out with trillions of taxpayer money. Did I mention that they have been bailed out with future tax revenues.

Still, lending remains low. Since April, Bank of America slashed its outstanding loans to small businesses by 5%, or $2.2 billion, according to the latest Treasury survey. JPMorgan’s lending total dropped by 2.5% since April, while Wells Fargo’s small business loan portfolio shed $3 billion since then, said the Treasury. Overall, the country’s top 22 banks receiving capital injections from the U.S. government have decreased total lending to small business by $11.6 billion over the period. Even when the banks do lend, some business owners say they are being asked for more advantageous terms.

BIS to Phase in Capital Rules as Conditions Improve Ya sure! People like to believe that the status quo can be restored. Having said that, the Bank of International Settlements (BIS) is not as delusional as Investment Banks (IBs).

The proposal was one of a host published in a consultation document by the Basel Committee on Banking Supervision aimed at strengthening bank capital cushions to help them withstand financial crisis. It said the new rules that emerged after the consultation process would be phased in as financial conditions improve, but with a target of the end of 2012.

Down-Payment Standards Eased Never confuse a government directive with improved housing conditions.

The changes, which are being done on a market-by-market basis, mean buyers in some parts of the country can now borrow 95% instead of 90% of a property’s value. Until recently, mortgage companies had tighter standards for these markets because of falling home prices.

‘Shadow Inventory’ of U.S. Homes Climbs, Report Says

The number of homes that may be in the pipeline for a sale because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September, according to estimates by First American CoreLogic.

House Flipping Makes a Comeback
Many people choose to believe in delusions than look at reality. Have we not traveled this road before..

The minimum bid, as set by a unit of Citigroup Inc., which had a $1.3 million mortgage on the home, was $379,900. After several minutes of bidding among investors and their representatives, some wearing shorts and flip-flops, Mr. Mirmelli won the home for $486,300. A week later, he agreed to sell it for $690,000 to a woman who moved in this month.

Not All Banks Are Created Alike

The big firms that played a central role in that meltdown, and many others that continue to dominate the financial services industry today, derive far less of their income from deposits and lending than do Main Street banks. Instead, they engage in a range of quite different activities, including trading in loans that others have generated, speculation in stocks and bonds and exotic derivatives.