This weekend Big Ben got together with his govt. cronies and they whipped up a wicked brew that is the antidote to the housing crisis and savior of all things financial. The SEC put the clamps on the shorts, the Treasury got into the mortgage underwriting business and Big Ben opened the Fed money faucet a little wider.

Hooray!??

Let's see, that's $30B for Bear Stearns, $8B for Indy Mac & now $5T worth of mortgages at Fannie and Freddie. I wonder if the cost of printing dollars has gone up with the increased raw material costs?

Our LD President Bush danced on the scene with an empty promise to drill the OCS for a few hundred thousand Bpd in 10 years and the world was right again.

Oil plunged, bank stocks soared. It must have brought a smile to their faces.

But is it reality? Have the finance gods truly been appeased?

First the good news. The market has now gone up violently for 2 straight days. Oil has now dropped for 3 days in a row! Techs and small caps are showing relative strength and the financials are leading the way higher. The put/call ratio (CPC) and the volatility index (VIX) have given buy signals. Sentiment is overwhelmingly bearish and the market is coming out of an extremely oversold condition. We even had a mild washout day on Tuesday with the NASDAQ showing the way higher with a positive close. Per our notes in the Public Chart List, we started entering select longs on Friday (7/11) during the Fannie/Freddie panic. We have had further confirmation with the VIX spike over 30 on Tuesday (7/15) followed by a sharp pullback in volatility the following day (7/16). Volatility closed flat today, but the put/call ratio rolled over giving its own new buy signal (7/17). While the March lows were violated in the SPX and Dow Jones, they held solid in both the Russell 2000 and the NASDAQ, possibly forming the illusive head and shoulders bottom in both. This relative strength in the riskier, more aggressive markets is something to watch.

So what could go wrong? I don't have the space in this post, so let's just say nothing has changed other than investor psychology. The market was scared and shorted to death and everyone was long in the oil/commodity trade. Ben, Bush and the G-men at least caused everyone to blink. Changing minds, and possibly realities, is an entirely different matter. Just breaking a few trendlines would be a nice start. At this point, this rally is nothing more than a bear market bounce. But don't sell this bounce short as it could provide a nice opportunity for gain on the long side in something other than commodities and energy stocks.

We expect this rally to challenge the 1340-1360 area on the SPX, with additional upside to the 1400-1420 area possible on an extended recovery. Until the SPX exceeds the 80 week (400 day) moving average, (currently around 1430 and dropping), this is a bear market bounce only. We recommend taking profits in the 1340-1420 area and we will add further details to this call as available. Let's not overlook the fact that the Dow, SPX and Wilshire 5000 all cut their rallies short today in the area of the previous lows. This is obviously resistance level number one. Equally intriguing is the proximity of the commodity indices to first level support. We will be buying select commodity stocks on this weakness as it doesn't come around very often and history has shown these corrections to be violent but short lived.

US Bancorp earnings dropped 18.5%, but is considered a huge success by the standards right now. Securities losses, loan charge-offs and a rise in loan loss reserves contributed to the slide.

JPMorganChase issued $2.4 billion in new write-downs and credit provisions. However, its net income of $2 billion, or 54 cents a share, beat Wall Street’s expectations of 44 cents a share, thanks to strong results in its commercial banking and treasury operations. Revenue fell 3 percent to $18.4 billion, beating expectations of $16.6 billion.

The good ones are good only by comparing them to the bad ones.

Over the last month, we have seen the trends highlighted in that note accelerate. The March lows did not hold in the SPX and the financials led the way with the XLF (Financials Select Sector SPDR) dropping a full 26% for the month at its lows just two days ago. The SPX "only" dropped almost 11% in comparison.

But in the last two trading days, both have almost halved their losses for the month with the XLF jumping almost 25% from top to bottom in two days! Of course the math still leaves XLF down over 12.5% since our writing and SPX lagging relatively in the comeback with a loss of still over 7%. Since Wrong Again Ben in December, the XLF is down over 31% with the SPX down almost 15%.

This rally has come at the same time commodities, led by oil, have corrected some. To keep perspective, we'll update our chart from last month. What was a difference of 31% in return between the SPX and CCI, has grown to over 40%, peaking at just under 50% around the July 4th break. Not bad for 7 months work. It would be irrational to not expect some profit taking after a run like that, by both shorts and longs, respectively. Is it time to rotate back to stocks? No one can be sure, but if you don't take some profits on that spread you are a PIG and we all know "bulls and bears make money. pigs get roasted."

Another even more interesting chart we are going to show again is the comparison of two widely held mutual funds, the Dodge & Cox Stock Fund (DODGX) and the Pimco Total Return Fund (PTRAX). Last month, we found the difference since December to be almost two years worth of expected gains (around 8% per year). This month, I am afraid the difference has jumped to almost three years! I personally have never met a mutual fund I liked, and I'm not really sure what excuse Dodge and Cox is giving currently, but this fund is clearly in the toilet. I guess size does matter (and what you do with it makes all the difference).

U.S. clients hold about 19,000 accounts at UBS, with an estimated $18 billion to $20 billion in assets, in Switzerland, according to the findings from the Senate probe and Justice Department prosecutors.

The findings by the Senate Permanent Subcommittee on Investigations come ahead of a hearing Thursday featuring testimony from senior officials from the Internal Revenue Service and the Justice Department related to investigations into alleged tax evasion.

The probe adds fuel to a burgeoning effort by tax authorities around the globe to shatter the veil of bank secrecy that tax havens hide behind in catering to the world's elite.

Investigators weren't able to obtain data about LGT, but said the IRS has identified at least 100 accounts with U.S. clients at the Liechtenstein bank.

Democratic Sen. Carl Levin, of Michigan, chairman of the subcommittee, is pushing legislation to tighten requirements that could force more disclosure by banks. "We are determined to tear down these walls of secrecy and to break through the iron rings of deception," he said at a briefing Tuesday.

Documents highlighted in the Senate probe include one LGT memorandum that describes a client using accounts to move funds "to the USA and Panama and may be classified as bribes."

An LGT spokesman said it provided information to the committee investigators, and characterizes as "dated" many of the documents.

The committee has subpoenaed several U.S. taxpayers, who, investigators say, maintained LGT accounts unknown to the IRS.

The four on the witness list are: Peter Lowy, of Beverly Hills, Calif., whose family controls Australian shopping-mall developer Westfield Group; Steven Greenfield, a toy importer from New York; Shannon Marsh, whose family owned a construction company in Fort Lauderdale, Fla.; and William Wu, of Forest Hills, N.Y.

According to documents cited in the investigation, the Lowy family once maintained through LGT a series of Liechtenstein-based foundations that in 2001 held $68 million in assets. The foundations are similar to trust accounts in U.S. and other jurisdictions. The Liechtenstein foundations were at the subject of a settlement between the Lowy family entity and Australian tax authorities more than a decade ago.

Attorneys for Messrs. Greenfield and Wu declined to comment. An attorney for Mr. Marsh didn't return calls seeking comment.

Robert S. Bennett, an attorney for Mr. Lowy, said his client was traveling and couldn't attend Thursday's hearing. "The Lowy family has done nothing improper," Mr. Bennett said, adding that the family believed the subcommittee report was a "rush to judgment."

For investigators and prosecutors, the biggest break has come from testimony given by former employees of UBS and LGT. UBS banker Bradley Birkenfeld pleaded guilty June 19 to helping his U.S. clients evade taxes. He told U.S. prosecutors that the Swiss bank generates some $200 million a year in revenue from U.S. clients, prosecutors say.

Investigators also have been aided by information from Heinrich Kieber, a former employee of LGT, who has turned over account data to tax authorities in Germany, Australia, the U.S. and other nations.

The data have aided investigations in several countries; in Spain Tuesday, police raided offices of several financial firms accused by prosecutors of aiding rich Spanish citizens connect with bankers in Liechtenstein.

UBS is in talks with the IRS and Justice Department. Authorities are having a tougher time seeking help from Liechtenstein, which is clinging to its secrecy laws. UBS is sending a senior wealth-management official to testify; LGT declined to offer testimony Thursday, saying its client-secrecy laws would prevent any official from answering the questions senators have.

A UBS spokeswoman said the company continues to work with authorities to correct any improprieties found by the investigation.

DARA FRESCO, a 34-year-old head teller at Canadian Imperial Bank of Commerce in Toronto made headlines earlier this year when she announced a class action claim against her employer for non-payment of overtime.

Doug Elliot, a lawyer involved in the case, calls the suit the "largest unpaid class action ever launched in Canada. We believe it will establish an important class-action precedent"

The statement of claim alleges CIBC nonmanagement employees are assigned heavy workloads that cannot be completed within standard working hours, and that, at least in Fresco's case, she was told not to claim any of it as overtime. Fresco continues to work at the bank after filing the court claim in June.

The suit is seeking $600 million in damages on behalf of 10,000 current and former customer service staff. CIBC has responded that the company has a "clearly defined" overtime policy that "exceeds legislative requirement."

The suit could take some time. Even the first step, having the lawsuit certified-that is, considered a legitimate class action suit-could take as long as a year.

Similar lawsuits in the U.S. have forced employers to pay overtime at Wal-Mart, Starbucks, Taco Bell and Radio Shack. Class action suits are less common in Canada, but if Fresco succeeds, thousands of bank workers will benefit.

Since women began filling bottom-rung bank jobs in large numbers in the mid-1900s, they have complained of poor working conditions. Trade union organizing drives in the banks started in the 1970s, but either failed or resulted in too few bargaining units to make a difference. A small feminist union in B.C. woke up the labour movement in 1976, organizing 22 bank branches in B.C. and Saskatchewan. The Service, Office and Retail Workers Union of Canada (SORWUC) managed to sign on 700 bank employees, gained a significant legal victory to unionize branch by branch and publish a book [An Account to Settle).

In a recent telephone interview, Jean Rands, a founder of SORWUC, said unpaid overtime was a key issue back then. The banks "smartened up for awhile" after the organizing drive, she said, and paid overtime to keep the unions out.

A year after SORWUC began organizing, eight women bankworkers in Willmar, Minnesota, risked jobs, friends and the opposition of church and community to embark on the longest bank strike in their country's history. Their isolated and valiant struggle was documented by Lee Grant in a film called The Willmar 8.

Today, banks are still largely unorganized, with employees experiencing layoffs and few improvements to their wages and benefits. Organized bankworkers are represented by the United Steelworkers or the Canadian Office and Professional Employees Union ata small number of bank branches and credit unions scattered across the country.

Fresco claims she is owed about $50,000 for the two to five hours of additional work she says she's put in every week during her 10-year career. She currently makes an annual salary of $30,715.

Elliott and his firm and are working with lawyers across Canada to establish that CIBC is violating the federal labour code by denying overtime pay to employees. The Toronto law firm has set up a web site (www.unpaidovertime.ca) where CIBC employees can register. Hundreds of frontline CIBC staffers have registered online to keep abreast of the proceedings.

CIBC is Canada's fifth-largest bank and posted a profit of $807 million in its second quarter, ending April 30, up from $585 million in the same quarter a year ago.

Reprinted from Herizons magazine, Winter, 2007.

Bank of America main office is located in Charlotte, North Carolina

It's FDIC Certificate is # 3510

FDIC Supervisory Region: Atlanta

Federal Reserve District: Atlanta

FDIC Geographic Region: Atlanta - Alabama, California, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia Chartering Agency: OCC - State and Federal Comptroller of the Currency

OCC Charter Number: 13044

OTS Docket Number (assigned by federal housing finance board - FHFB): N/A

Core Based Statistical Area (CBSA): Charlotte-Gastonia-Concord, NC-SC (CBSA#16740)

Consolidated Metropolitan Statistical Area (CMSA): N/A

Combined Statistical Area (CSA): Charlotte-Gastonia-Salisbury, NC-SC - CSA#172

Metropolitan Statistical Area (MSA): Charlotte-Gastonia-Rock Hill, NC-SC - MSA#1520

Office of the Comptroller: Southeast - Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia

Office of Thrift Supervision (OTS) Region: Southeast

To find a Bank of America location near you click on
http://www.bankswd.com/north-carolina/charlotte-banks/bank-of-america_3510/locations-by-state-city.html

]]> http://www.lightbluetrading.com/bank-news/bank-of-america/feed/ http://www.lightbluetrading.com/bank-news/shutdown-ubs/ http://www.lightbluetrading.com/bank-news/shutdown-ubs/#comments Thu, 17 Jul 2008 17:05:23 +0000 admin Bank News http://polifispectrum.wordpress.com/?p=399 That is the call today by Senator Levin.
As if the banking industry needs anything else to be jittery about.
Are these folks up in DC that stupid?

News Link

Federal regulators should consider revoking the US banking license of the giant Swiss Bank UBS because of its role in helping wealthy Americans evade billions of dollars in taxes, Sen. Carl Levin (D-MI) told ABC News today.

"I don't think that any bank that goes to the extent that UBS has gone through to avoid doing what their agreements with the United States require them to do, should be allowed to continue to do business unless they clean up their act," Levin said.

UBS's role in arranging "undeclared" accounts for an estimated 19,000 US citizens was one focus of a hearing by the Senate Permanent Subcommittee on Investigations, chaired by Levin today. The role of the LGT bank, owned by the royal family of Liechtenstein, was also investigated.

Levin said UBS practices resulted in its U.S. clients maintaining undeclared Swiss accounts that collectively held "$18 billion dollars in assets that have been kept secret from the the IRS."

"They wanted secrecy. UBS gave them secrecy," Levin said.

Levin revealed a list of "secrecy tricks" he said the UBS bankers used to carry out their tax haven schemes.

The list includes code names for clients, using untraceable pay phones, encrypted computers, fake trusts, counter-surveillance training, and shredding files.

Levin said UBS hid behind Swiss bank secrecy laws to hide its misconduct, and offered services in the US it was not licensed to provide.

UBS is the world's largest private bank catering to wealthy individuals.

One of its bankers, Bradley Birkenfeld, has already pleaded guilty in the US to tax evasion and fraud and is cooperating with federal prosecutors in Miami.

In a plea agreement, Birkenfeld detailed how he said he had been trained by UBS to help wealthy Americans evade taxes.

In one case, Birkenfeld told prosecutors he purchased diamonds using a US client's Swiss bank account and smuggled the diamonds into the United States in a toothpaste tube.

He called for passage of new laws to end tax haven abuses.

"Tax havens," said Levin, "are engaged in economic warfare against the United States and honest, hardworking American taxpayers."

Maybe if you stopped taxing the living shit out of peoples accounts they would keep the money here and increase the savings amounts in the US!? In turn increasing deposits in US banks, increasing the availably capital banks need to stay liquid.

Naa that would be crazy talk, they need to tax you when you make the money, tax you when you pay the govt for the money, tax you when you save the money, tax you when you invest the money, tax you for living on your property and tax you when you die so that your heirs can pay more taxes on that as well.

Moron! Fix the taxing system not shut down a bank!

Even with the $100,000 FDIC insurance refund it has been estimated that IndyMac customers that had over $100K lost a combined $43 Million dollars that will never be refunded. Most of the lost money did not come from wealthy customers but instead from responsible middle to lower class customers whom saved for retirement and had huge 401K accounts.

Southron economic experts with the University of Georgia, Florida and Alabama fear that as the "Baby Boomer" generation retires and begins to cash their savings and 401k investments out we will see more banks and credit unions collapse under the heavy economic strain.

According to the U.S. Department of the Treasury 73% wealth stored in banks and credit unions are held by baby boomers and over 89% of bonds, 401k's, pensions, and stock investments are held by baby boomers.

Doug Rivers a economist from the University of Florida had this to say about the economic storm that is headed our way...

Our economy since the late 1970's has been powered by the baby boomer generation whom inherited it from their parents whom were the World War II generation, whom has since fully retired and have begun to die off.

The next generation... generation X (1980's - 1990's) have not been saving like their parents, or their parents before them and  a lot of it has to do with the greed of the baby boomers whom were largely behind the recent housing spike and has made it hard for their children (Gen X) whih had caused our economy to be stale for the past 20 years.

Currently our economy without the baby boomers money in the banks is too weak to stand... once the baby boomers begin to retire over the next 5 years Gen X will be expected to carry the bulk of the economic weight and given the current financial reports out they will not be able to do it. For example a recent housing report shows that 98% of baby boomers own property or a house of some kind while only 23% of Gen X owns property, the rest of Gen X rents property or lives with their parents still.

I believe that we are headed for another Great Depression due to the greed of the baby boomers and individuals that rent out property and thus keep the cost of houses out of reach of Gen X. Housing is the key to the economy, and right now its in the gutter, mix that with energy and food prices soaring threw the roof thanks to speculators and greedy wall street traders and you have a recipe for another Depression... Mark my words IndyMac is the first and will not be the last... I urge all Southerners to keep some cash under their mattress or in a coffee can some where for a rainy day.

But, bank industry experts in Florida say most banking customers have little to worry about; they insist that the nation's banking industry overall is sound.

In Florida, nearly all banks and credit unions have seen what's called "nonperforming assets," largely delinquent loans and repossessed property, increase significantly in the past two years, according to data from banking analysts. Still, those nonperforming assets are low by historical standards, experts note, so there's no cause for widespread alarm.

BauerFinancial, a Coral Gables-based research firm that analyzes and rates banks, gives only two Bay-area institutions below-adequate marks for financial strength: Old Harbor Bank of Clearwater and Bay Gulf Credit Union of Tampa. That's out of 63 banks and credit unions with corporate headquarters in the area.

Lutz-based banking industry analyst Richard Bove, of investment banking firm Ladenburg Thalmann, said the vast majority of banks nationwide are in no danger of failing. Bove primarily focuses on large publicly traded banks.

"We're far away from the devastation of the late 1980s and early 1990s," Bove said, referring to that era's Savings and Loan crisis, during which hundreds of S&Ls went under, in part because of heavy exposure from real estate lending.

Banking has taken center stage recently with the failure of California-based IndyMac and worries about the future of mortgage giants Fannie Mae and Freddie Mac. Other banking giants aren't facing insolvency, but have posted big losses, such as Wachovia Bank, which lost $369 million in its most recent quarter, and Citibank, which lost $881 million.

Many banks operating in Florida also have posted losses recently, as increases in delinquent loans and repossessed properties hit the bottom line.

In general, banks aim to keep their nonperforming assets less than 2 percent of total assets, said Karen Dorway, president of BauerFinancial.

With foreclosures rising and real estate prices falling in the Tampa Bay area and statewide, the number of banks above that threshold has shot up. Of the 390 banks tracked by BauerFinancial that operate in Florida, 131 - or one-third - have nonperforming assets exceeding 2 percent.

Many of the hardest hit banks and credit unions are in Southwest Florida and Southeast Florida, which had some of the biggest spikes and sharpest declines in real estate.

Locally, Tampa's Bay Gulf Credit Union has taken hits because of problems in its auto and real estate loan portfolios. These problem loans caused the credit union to take a charge against earnings last year and the first part of this year, resulting in a loss of about $3.1 million last year and a loss of about $671,000 in the first quarter of 2008.

Despite the losses, Bay Gulf's chief executive officer, Bill DeMare, said the credit union is "well-capitalized," meaning it has enough money in reserve. "We feel pretty confident going forward," DeMare said.

Among locally based financial institutions, Bay Gulf and Old Harbor Bank of Clearwater each received two out of a possible five stars in BauerFinancial's rating system.

A rating of zero stars is the lowest level of financial strength, and five is the highest.

The ratings take into account the financial institutions' level of capital, profitability, nonperforming assets and other factors.

Old Harbor Bank's chief executive, William Short, could not be reached for comment Wednesday.

The remaining 61 banks and credit unions based in the Bay area, primarily small community banks, received scores of three stars, or adequate, to five, or superior. No local banks or credit unions received ratings of zero or one star.

"We're looking at an industry that's not as healthy as it was four or five years ago, but it's still in good shape," said Dorway, the BauerFinancial president.