http://www.zerohedge.com/article/bearish-signs-regionalnon-tbtf-banks
Something is going to happen soon...
Something is going to happen soon...
Big Short Bets on Regional Banks
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This rally is the biggest bunch of fools gold you will ever see in your life. People are going to get smoked all over again.
Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman
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By Mark Deen and David Tweed
Sept. 13 (Bloomberg) -- Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.
âIn the U.S. and many other countries, the too-big-to-fail banks have become even bigger,â Stiglitz said in an interview today in Paris. âThe problems are worse than they were in 2007 before the crisis.â
Stiglitzâs views echo those of former Federal Reserve Chairman Paul Volcker, who has advised President Barack Obamaâs administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing âexcessively.â
A year after the demise of Lehman forced the Treasury Department to spend billions to shore up the financial system, Bank of America Corp.âs assets have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group Plc, 43 percent owned by the government, has taken over the activities of HBOS Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking assets of insurer Fortis.
While Obama wants to name some banks as âsystemically importantâ and subject them to stricter oversight, his plan wouldnât force them to shrink or simplify their structure.
Stiglitz said the U.S. government is wary of challenging the financial industry because it is politically difficult, and that he hopes the Group of 20 leaders will cajole the U.S. into tougher action.
G-20 Steps
âWe arenât doing anything significant so far, and the banks are pushing back,â he said. âThe leaders of the G-20 will make some small steps forward, given the power of the banksâ and âany step forward is a move in the right direction.â
G-20 leaders gather next week in Pittsburgh and will consider ways of improving regulation of financial markets and in particular how to set tighter limits on remuneration for market operators. Under pressure from France and Germany, G-20 finance ministers last week reached a preliminary accord that included proposals to claw-back cash awards and linking compensation more closely to long-term performance.
âItâs an outrage,â especially âin the U.S. where we poured so much money into the banks,â Stiglitz said. âThe administration seems very reluctant to do what is necessary. Yes theyâll do something, the question is: Will they do as much as required?â
Global Economy
Stiglitz, former chief economist at the World Bank and member of the White House Council of Economic Advisers, said the world economy is âfar from being out of the woodsâ even if it has pulled back from the precipice it teetered on after the collapse of Lehman.
âWeâre going into an extended period of weak economy, of economic malaise,â Stiglitz said. The U.S. will âgrow but not enough to offset the increase in the population,â he said, adding that âif workers do not have income, itâs very hard to see how the U.S. will generate the demand that the world economy needs.â
The Federal Reserve faces a âquandaryâ in ending its monetary stimulus programs because doing so may drive up the cost of borrowing for the U.S. government, he said.
âThe question then is who is going to finance the U.S. government,â Stiglitz said.
To contact the reporters on this story: Mark Deen in Paris at markdeen@bloomberg.netDavid Tweed in Paris at dtweed@bloomberg.net
Last Updated: September 13, 2009 14:38 EDT
Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman
Share | Email | Print | A A A
By Mark Deen and David Tweed
Sept. 13 (Bloomberg) -- Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.
âIn the U.S. and many other countries, the too-big-to-fail banks have become even bigger,â Stiglitz said in an interview today in Paris. âThe problems are worse than they were in 2007 before the crisis.â
Stiglitzâs views echo those of former Federal Reserve Chairman Paul Volcker, who has advised President Barack Obamaâs administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing âexcessively.â
A year after the demise of Lehman forced the Treasury Department to spend billions to shore up the financial system, Bank of America Corp.âs assets have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group Plc, 43 percent owned by the government, has taken over the activities of HBOS Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking assets of insurer Fortis.
While Obama wants to name some banks as âsystemically importantâ and subject them to stricter oversight, his plan wouldnât force them to shrink or simplify their structure.
Stiglitz said the U.S. government is wary of challenging the financial industry because it is politically difficult, and that he hopes the Group of 20 leaders will cajole the U.S. into tougher action.
G-20 Steps
âWe arenât doing anything significant so far, and the banks are pushing back,â he said. âThe leaders of the G-20 will make some small steps forward, given the power of the banksâ and âany step forward is a move in the right direction.â
G-20 leaders gather next week in Pittsburgh and will consider ways of improving regulation of financial markets and in particular how to set tighter limits on remuneration for market operators. Under pressure from France and Germany, G-20 finance ministers last week reached a preliminary accord that included proposals to claw-back cash awards and linking compensation more closely to long-term performance.
âItâs an outrage,â especially âin the U.S. where we poured so much money into the banks,â Stiglitz said. âThe administration seems very reluctant to do what is necessary. Yes theyâll do something, the question is: Will they do as much as required?â
Global Economy
Stiglitz, former chief economist at the World Bank and member of the White House Council of Economic Advisers, said the world economy is âfar from being out of the woodsâ even if it has pulled back from the precipice it teetered on after the collapse of Lehman.
âWeâre going into an extended period of weak economy, of economic malaise,â Stiglitz said. The U.S. will âgrow but not enough to offset the increase in the population,â he said, adding that âif workers do not have income, itâs very hard to see how the U.S. will generate the demand that the world economy needs.â
The Federal Reserve faces a âquandaryâ in ending its monetary stimulus programs because doing so may drive up the cost of borrowing for the U.S. government, he said.
âThe question then is who is going to finance the U.S. government,â Stiglitz said.
To contact the reporters on this story: Mark Deen in Paris at markdeen@bloomberg.netDavid Tweed in Paris at dtweed@bloomberg.net
Last Updated: September 13, 2009 14:38 EDT
Fifth Third Bancorp Expects 3Q Loan Losses To Be $775M
Last update: 9/16/2009 10:24:19 AM
By Matthias Rieker
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Fifth Third Bancorp (FITB) said it expects third-quarter losses tied to defaulting loans to rise 24% from the second quarter, to approximately $775 million.
Kevin Kabat, the Cincinnati bank's chairman and chief executive, told investors at the Barclays Capital Global Financial Services Conference that he expects losses from delinquent loans to stabilize "in the next couple of quarters," but that his bank has built a strong reserve for loan losses and that he does not expect Fifth Third to need to add significantly to that reserve this quarter.
He said Fifth Third is working on shifting the fees it charges customers away from penalties and more toward services the bank provides, perhaps a nod to one potential focus of President Obama's plans to form a consumer protection agency.
Kabat also said he continues to be interested in acquisitions, but sees weak loan demand. âWe expect conditions in Florida to remain difficult until the end of the year," he said, but added that he sees signs of improvement in Michigan; Florida and Michigan are two of the markets that caused much pain to Fifth Third's loan portfolio.
In a filing with the Securities and Exchange Commission ahead of Kabat's presentation, Fifth Third said it "currently expects net charge-offs to include approximately $110 million in net charge-offs related to (Shared National Credits) compared with $17 million in the second quarter."
Such losses from syndicated loans are "higher than we expectedâ¢," Kabat said. However, the filing said the bank expects losses from shared national credits to improve "significantly" in the fourth quarter.
Fifth Third said it expects commercial loan losses to be approximately $500 million to $525 million and consumer loan losses to be approximately $250 million to $260 million. The bank expects nonperforming loans, those for which repayment is doubtful, "to increase approximately 20% from $2.8 billion at the end of the second quarter to approximately $3.4 billion at the end of the third quarter, with approximately $150 million of the growth related to SNC credits," the bank said in its filing.
"Operating trends for the third quarter are expected to be broadly in line with trends previously expected and communicated at the time of our second quarter 2009 earnings announcement on July 23, 2009," Fifth Third's filing said.
Kabat said the bank remains interested in purchasing failed banks from the Federal Deposit Insurance Corp. and other acquisitions, though Fifth Third would only make acquisitions in markets where it already has branches - the Midwest, Georgia, and Florida - and only if they are sizable enough to improve the bank's market share.
-By Matthias Rieker, Dow Jones Newswires; 212-416-2471; matthias.rieker@dowjones.com
(END) Dow Jones Newswires
September 16, 2009 10:24 ET (14:24 GMT)
Last update: 9/16/2009 10:24:19 AM
By Matthias Rieker
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Fifth Third Bancorp (FITB) said it expects third-quarter losses tied to defaulting loans to rise 24% from the second quarter, to approximately $775 million.
Kevin Kabat, the Cincinnati bank's chairman and chief executive, told investors at the Barclays Capital Global Financial Services Conference that he expects losses from delinquent loans to stabilize "in the next couple of quarters," but that his bank has built a strong reserve for loan losses and that he does not expect Fifth Third to need to add significantly to that reserve this quarter.
He said Fifth Third is working on shifting the fees it charges customers away from penalties and more toward services the bank provides, perhaps a nod to one potential focus of President Obama's plans to form a consumer protection agency.
Kabat also said he continues to be interested in acquisitions, but sees weak loan demand. âWe expect conditions in Florida to remain difficult until the end of the year," he said, but added that he sees signs of improvement in Michigan; Florida and Michigan are two of the markets that caused much pain to Fifth Third's loan portfolio.
In a filing with the Securities and Exchange Commission ahead of Kabat's presentation, Fifth Third said it "currently expects net charge-offs to include approximately $110 million in net charge-offs related to (Shared National Credits) compared with $17 million in the second quarter."
Such losses from syndicated loans are "higher than we expectedâ¢," Kabat said. However, the filing said the bank expects losses from shared national credits to improve "significantly" in the fourth quarter.
Fifth Third said it expects commercial loan losses to be approximately $500 million to $525 million and consumer loan losses to be approximately $250 million to $260 million. The bank expects nonperforming loans, those for which repayment is doubtful, "to increase approximately 20% from $2.8 billion at the end of the second quarter to approximately $3.4 billion at the end of the third quarter, with approximately $150 million of the growth related to SNC credits," the bank said in its filing.
"Operating trends for the third quarter are expected to be broadly in line with trends previously expected and communicated at the time of our second quarter 2009 earnings announcement on July 23, 2009," Fifth Third's filing said.
Kabat said the bank remains interested in purchasing failed banks from the Federal Deposit Insurance Corp. and other acquisitions, though Fifth Third would only make acquisitions in markets where it already has branches - the Midwest, Georgia, and Florida - and only if they are sizable enough to improve the bank's market share.
-By Matthias Rieker, Dow Jones Newswires; 212-416-2471; matthias.rieker@dowjones.com
(END) Dow Jones Newswires
September 16, 2009 10:24 ET (14:24 GMT)
