Jim Sinclair’s Commentary
Two so far this weekend.
Bank Closing Information
February 10, 2012
These links contain useful information for the customers and vendors of these closed banks.
SCB Bank, Shelbyville, IN
Charter National Bank and Trust, Hoffman Estates, IL
Jim Sinclair’s Commentary
The Grim Reaper that was part of the problem now accelerates the problem.
S&P downgrades 34 Italian banks
MILAN | Sat Feb 11, 2012 1:31am IST
(Reuters) – Rating agency Standard & Poor’s downgraded 34 Italian banks on Friday, including heavyweights UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI), citing a reduced ability to roll over their wholesale debt and expected weak profitability.
The move follows S&P’s downgrade of Italy’s sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries.
In a statement, S&P said its so-called Banking Industry Country Risk Assessment had worsened to group 4 from group 3 — out of 10 groups — reflecting its more negative view on Italy’s banking system.
"Italy’s vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks’ significantly diminished ability to roll over their wholesale debt," it said.
"We anticipate persistently weak profitability for Italian banks in the next few years, and a risk-adjusted return on core banking products that may not be sufficient for banks to meet their cost of capital.
Jim Sinclair’s Commentary
Here is the latest from John Williams’ must have subscription site, www.ShadowStats.com
- Annual Trade Deficit Widened to $558 Billion in 2011, from $500 Billion in 2010, A Negative for Both the U.S. Dollar and the U.S. Economy
- Trade Could Pressure GDP Revision to Downside
- More Jobs Lost to NAFTA
No. 417: December 2011 and Annual Trade Deficit
http://www.shadowstats.com
Jim Sinclair’s Commentary
There is no practical fix to the mess of unfunded contractual obligations.
This is mope at a spiritual level.
EU Agrees Rules for $700 Trillion Derivatives Market
Published: Friday, 10 Feb 2012 | 4:41 AM ET
European Union diplomats and the European Parliament agreed on Thursday to overhaul regulation of the roughly $700 trillion derivatives market, a move that will make it easier to control one of the most opaque areas of finance.
The new regime, which could be largely in place by the end of 2012, will overhaul a market that boomed in the decade before the economic crash and was blamed for amplifying the crisis by hiding risks from regulators.
Under new EU laws, banks, hedge funds and other buyers and sellers of derivatives will be encouraged to move away from the unregulated ‘over-the-counter’ market, which accounts for almost 95 percent of all trades.
"The era of opacity and shady deals is over," said Michel Barnier, the European commissioner in charge of writing these and other new rules to reform finance.
"It is a key step in our effort to establish a safer and sounder regulatory framework for European financial markets." In the past, it has been common for multi-million-euro contracts to be recorded by no more than a fax, with only the parties involved aware of the details.
This will change under the new law, which would standardize most trading so it happens on open exchanges. Settlement of such deals will be cleared centrally, making them easier to monitor.
Jim Sinclair’s Commentary
That is not entirely correct. The choice is up to the ISDA who is run by the banks, and international investment firms.
Jim Sinclair’s Commentary
This is another hollow piece of MOPE being evangelized.
Why the Foreclosure Deal May Not Be So Hot After All
POSTED: February 9, 12:58 PM ET
So the foreclosure settlement is through.
A few weeks back, I was optimistic about it – I had been worried that it was going to contain broad liability waivers for all sorts of activities, and I was pleasantly surprised when I heard that its scope had essentially been narrowed to robosigning offenses.
However, now that the settlement is finalized, and I’ve had time to think about it and talk to people who know far more than I do about this, I’m feeling pretty queasy.
It feels an awful lot like what happened here is the nation’s criminal justice honchos collectively realized that a thorough investigation of the problem would require resources they simply do not have, or are reluctant to deploy, and decided to accept a superficially face-saving peace offer rather than fight it out.
So they settled the case in a way that reads in headlines like it’s a bite out of the banks, but in fact is barely even that. There will be little in the way of real compensation for stuggling homeowners, and there are serious issues in the area of the deal’s enforceability. In fact, about the only part of the deal we can be absolutely sure will be honored in full is the liability waiver for the robosigning offenses.
With the rest of it — collecting on the settlement, enforcement of the decrees, all the stuff put in there to balance the deal in the consumer’s direction — there will be an uphill battle from this point forward to get the banks to comply. The banks meanwhile have no such uphill battle. They will get the full benefit of the deal (a release from costly litigation) from the moment the ink is dry.