Tag Archives: bank

Business/Economics, International

No Economic Recovery for Japan. Blame Europe

The head of Bank of Japan announced that as long as Europe struggles with a credit crisis, the value of the Japanese yen will keep going up.  That’s bad when Japan’s economy is based on exports. The more their yen is worth, the more their products will cost.

Masaaki Shirakawa said the result is that more and more Japanese companies will move their operations to other countries.  That means unemployment in Japan will only go up.

The Japanese Labor Ministry reported that there are now, officially, 2.88 million Japanese who can not find jobs.  They also said that while unemployment has been going up, the number of jobs available are unchanged.

Business/Economics, Idaho, U.S.

Occupy Idaho: Bank sues Mayor for business loan, Mayor says her business is not in trouble

Coeur d’Alene Mayor Sandi Bloem was shocked to learn that her jewelry store is being sued for more than $80,000.

Panhandle State Bank says the lawsuit is over a $75,000 loan made back in 2005.  Bloem says she was in the process of renegotiating the loan, and never had any indication the bank was going to sue.  She says her jewelry store is not in financial trouble, even though the bank says she failed to pay off the loan.

 

Business/Economics, International, U.S.

What Economic Recovery? Federal Reserve Bank revises growth forcast downward, blames Europe

No surprise, the U.S. Federal Reserve Bank revised its economic growth forecast downward.

Back in June the bank predicted U.S. growth at 2.9% (which is still bad, it needs to be above 3% to be good).  Now they revised it downward by one percent, to 1.9%.  Can you say stagnation?

Federal Reserve Chairman Ben Bernanke said the expanding crisis in Europe has made the future of the U.S. economy increasingly unclear.

Business/Economics, Idaho, U.S.

What Economic Recovery? Home Federal Bank lay offs hit Idaho & Oregon

“We continue to see high unemployment nationally and in our local markets. And the outlook for improvement in economic growth, which we believe is necessary to drive loan demand, remains questionable.”-Len Williams, Home Federal Bancorp

Home Federal Bank will close six branches in Idaho and Oregon.  Officials hope it will save the bank U.S.$1 million in the next year.

A total of 35 people will lose their jobs.  20 in Idaho and 15 in Oregon.  10 of the Idaho lay offs will come from changes to Home Federal’s mortgage operations.

Home Federal Bank reported a $4.1 million loss in 2010, and so far this year has lost $2.6 million!

Business/Economics, U.S.

Corporate Incompetence: FDIC sues failed bank executives, board of directors were the cause of Georgia’s biggest bank failure ever, more proof that the bad economy is the fault of Corporate America

In 2009, Silverton Bank, in Georgia, failed.  The FDIC spent $385 million taking over the bank, it was the biggest bank failure in Georgia’s history.

Now the FDIC is suing the former board of directors, for gross incompetence.

The FDIC alleges that Silverton executives engaged in “extravagant spending on unnecessary items”, with “a complete disregard of a declining economy.”  Also,  they accuse the bank’s top dogs of “robotically voting for approval of transactions without exercising any business judgment.”

Business/Economics, International, U.S.

What Economic Recovery? World Banks tightening their grip on money

On Saturday, June 25, the Basel Committee on Banking Supervision announced that all major international banks, and central banks (like the U.S. Federal Reserve) are going to increase their capital reserves.

This means they are going to hold onto more money and issue less loans.  Some banks refer to capital reserves as putting their money to ‘rest’ (aka bank reserves, desired reserves).

The Basel Committee on Banking Supervision refused to give a list of which banks will be holding back on their money.  This is an indication that the major international, and central banks do not expect any short term improvement in the world economies.

The increase in capital reserves is to help banks handle monetary emergencies, like traditional “runs on banks”.  Just how long does the Basel Committee on Banking Supervision think the economy will suck?  The new tighter control on money will be implemented in phases, becoming fully in effect in 2018.  Mmmm, it’s 2011 now, uh oh!

Business/Economics, U.S.

What Economic Recovery? Bank failures continue, now it’s local banks going down

Already for 2011, 43 banks have failed.  According to the FDIC, 157 banks failed in 2010, 140 failed in 2009, 25 in 2008 and only 3 in 2007.  Notice a trend?

According to Forbes, the U.S. banking industry has, for the first time in 27 years, reported a drop in revenue.  Down 3.2% for the first quarter of 2011.

It’s interesting that the Federal Deposit Insurance Corporation claims no banks failed in 2005, or 2006.  U.S. media have incorrectly stated that until 2006 there were no failures (Washington Post), but the FDIC list shows there were several bank failures every year from 2000 to 2004.  For some reason 2005 & 2006 had none.

The concern for 2011 is that the bank failures are hitting local community banks harder, instead of the larger regional and national banks.  One reason could be that the bigger banks got bailout money from the Federal Reserve, and U.S. taxpayers.  The local banks did not.

However, the Wall Street Journal is reporting that 98 banks that got bailout money are on the verge of failing.

 

Business/Economics, U.S.

Proof the Federal Reserve works for Corporate America, and Foreign Banks, not you

“Why wasn’t the Fed providing these same sweetheart deals to the American people? The Fed was practicing socialism for the rich, powerful and the connected, while the federal government was promoting rugged individualism to everyone else.”-Warren Gunnels, adviser to Senator Bernie Sanders

The Federal Reserve is a privately run bank.  It operates to make a profit.  It is not interested in helping out the average U.S. taxpayer, because there is no profit in it. It’s only natural that the biggest customers of the Federal Reserve are corporations, like financial institutions and banks, including foreign banks, and governments.

Under court order it was revealed that the Federal Reserve made at least 46 “emergency” loans to the Arab Banking Corporation, and the Libyan government is a 59% stake holder in that bank.

The Federal Reserve has also bailed out two major European banks, as well as many U.S. corporations.  The “Fed” makes its money off the interest it charges for those loans.  That includes the money it “loans” to the United States.  That’s right, our money, the not so almighty dollar, is borrowed from the Federal Reserve.

We little guys are ripped off, because the big low interest lows made to credit card companies, and banks, are used to provide high interest loans to us.  I remember a time when the low interest loans to corporate America were supposed to be passed on to the consumer, in the form of low interest loans.  That’s what former President Ronald Reagan claimed when he argued for a drop in interest rates from the “Fed”.

Since the late 1990s interest rates to corporate America have been going down, while interest rates to us little guys has been going up.  Also notice that interest rates on your savings accounts have been going down as well (and they wonder why American’s don’t save their money in the banks!?).

It’s not just individual consumers that are getting ripped off.  If you’re not a big corporation, just a small business, you’ve been ripped off as well.  There’ve been several regional businesses where I live, that have folded up, not because they didn’t have sales, but because their banks refused to extend credit, or canceled their credit altogether.

Basically the Federal Reserve is now only interested in being able to turn a big profit off their low interest loans.  It can’t do that with small time businesses or individuals.  That’s because they’re operating a WalMart type of business plan, that is making profit off high volume, not high prices.  The only way you can make big profits off high volume, low price, is to have customers that can afford to buy in high volume.

If the Federal Reserve is charging half a percent interest, it needs to make loans in the billions of dollars, in order to make a profit from that half a percent interest.  Logically only big corporations and governments, can take on that big of a loan.

So maybe the Federal Reserve is not “…practicing socialism for the rich, powerful and the connected…” as an adviser to Senator Sanders claims, but is simply acting as any other big corporation would in search of big profits.  After all, the “Fed” is the most powerful corporation in the United States (again it is NOT a government agency).  But this is just more reason why our money should not be controlled by the Federal Reserve.

By the way, know how much the “Fed” made in profits last year?  $81.7 billion.


 


Business/Economics, International, U.S.

Chinese bankers say dump U.S. dollar, buy other currencies

Several banking officials in China, have stated that they Chinese government needs to “reduce” and “diversify” their foreign currency holdings.

Tang Shuangning, chairman of China Everbright Group said China must reduce its excessive foreign exchange reserves and further diversify its holdings.

Zhou Xiaochuan, governor of China’s central bank, said that China’s foreign exchange reserves “exceed our reasonable requirement”.

Xia Bin, a member of the monetary policy committee of the central bank, said China should further diversify its foreign exchange holdings.

According to western media reports, most of China’s foreign currency holdings are in U.S. dollars.  This is part of why the value of the U.S. dollar hasn’t dropped as far as it should have.  But if the Chinese government listens to its bankers, then the dollar could crash.

When the Chinese bankers say China must reduce its current foreign currency holdings they’re talking about U.S. dollars.  They’re saying the Chinese government has too many, based on how bad the U.S. economy is.

When the Chinese bankers say they want the Chinese government to diversify foreign currency holdings, they mean they want to get rid of U.S. dollars and buy money from countries that have good economies, like Russia, India, South Africa and several South American countries.

 

Business/Economics, International, U.S.

World Bank & IMF not happy about economic situation

“We are one shock away from a full-blown crisis.” Robert Zoellick, World Bank President

The World bank is run by the United States, and if the current situation within the U.S. is any sign, then the world economy, influenced by the World Bank, is in trouble.

The International Monetary Fund is worried as well: “Especially because of youth unemployment… there is now a risk that this will be turned into a life sentence, and that there is a possibility of a lost generation.”-Dominique Strauss-Kahn, IMF chief

One analyst says fiscal and monetary policies might actually make things worse: “What they do is they very often pressure government to adopt what we call pro-cyclical policies. The economy’s weak and in recession, they want them to cut spending or raise taxes. And that can be very dangerous, I mean you can slip back into recession, you can make a recession worse.”- Mark Weisbrot, Center for Economic and Policy Research

Officials with the World Bank, and the IMF, say food prices, citizen security, justice and jobs, are the main issues for international economic stability.  Yet history shows that the policies of the IMF and World Bank actually cause some of the problems: “The International Monetary Fund and the World Bank say that they are interested in reducing poverty. All their actions however said otherwise. Their actions have instead raised the poverty level and created under-development.”-Andrew Garvin Marshall, Center for Research on Globalization

The president of the World Bank has always been a United States citizen, since 1944.