Who benefited by US support of AIG

Image by h.koppdelaney via Flickr

Barclays $7.0
Deutsche Bank 6.4
BNP Paribas $4.9
Goldman Sachs $4.8
Bank of America $4.5
HSBC $3.3
Citigroup $2.3
Dresdner Kleinwort $2.2
Merrill Lynch $1.9
UBS $1.7
ING $1.5
Morgan Stanley $1.0
Societe Generale $0.9
AIG International Inc. $0.6
Credit Suisse $0.4
Paloma Securities $0.2
Citadel $0.2
Total $43.7

Related articles by Zemanta

• AIG Loses $100 Billion and Counterparties get $50 Billion - Really? (firedoglake.com)
• Who Stole our Country? (rebeldoctor.blogspot.com)

PIMCO - IO Feb 2009 Gross Beep Beep

PIMCO - IO Feb 2009 Gross Beep Beep: "But stopping the decline of asset prices can be and has been attempted in numerous, seemingly uncoordinated ways. Recapitalization of the banks has been the major thrust, in the hopes that banks would extend credit which would reinvigorate asset pricing. Those who argue strongly for a recapitalization of the banking system, however, may be missing the distinction between the banking system as we once knew it, and the “shadow banking” system that superseded it. Jim Bianco, who heads up the research tank bearing his own name, brought the difference to mind in a recently produced piece entitled, “When Will The Banks Start Lending?” His conclusion was that banks already were – lending – but it was the “shadow system” (my words) that was holding up the parade. According to his analysis, shown in Chart 1, securitization has for several years exceeded bank loans as a percentage of private credit market debt. In contrast to recent headlines, however, banks have been picking up their lending, but it has been the “shadow banks” that have faltered. That makes sense. While banks may have tightened their lending standards, fresh capital from the TARP has made it possible to make new loans. The shadow banks, however – hedge funds, investment banks, and str"

PIMCO - IO Feb 2009 Gross Beep Beep

Image via Wikipedia

PIMCO - IO Feb 2009 Gross Beep Beep: "PIMCO’s advice to policymakers is as follows: you can’t bail out everyone, yet economic recovery is not possible unless certain critical asset sectors are not only reliquefied, but rejuvenated in price. The prior Administration’s focus on the banks has been critical but unidimensional. The shadow banking system with its leverage and financial innovation, powered a near 25-year global economic expansion, but it is the delevering of those hidden quasi-banks that is now threatening its petrification. Policymakers should not focus entirely on one-off bailouts of large real estate developers, municipalities, or even credit card issuers like they have with Citi, BofA, and AIG. Rather, they should recognize that supporting critical asset prices such as municipal bonds, CMBS, and even investment grade corporate bonds is a necessary step towards eventual economic revival. Capitalism at its philosophical and practical center depends on credit, and while new loans can be and are being advanced via the banking system, it’s a much more difficult task to force shadow banks to lend. That lending depends on securitization which in turn depends on stable and eventually higher asset prices than currently exist. The original focus of the TARP was on asset prices, but the prior Administration quickly lost its way or perhaps its"

Related articles by Zemanta

• Bank bailout: What's in the plan (money.cnn.com)
• CDS Demonization Watch, Gretchen Morgenson Edition (portfolio.com)
• Top 10 News Stories of the Year (time.com)

Zero Hedge

Image via Wikipedia

Zero Hedge: "So does the upcoming bailout have the makings of actually fixing the structural problems in the economy? Some thoughts on the various approaches, from BAC:

Aggregator Bank

This is an off balance sheet vehicle that pools multiple bank’s bad assets into one “Bad Bank” or “Aggregator Bank” that can both manage and dispose of the bad assets it buys from banks. To alleviate the pricing problem, the bad bank could focus on trading account securities and loans that have been most heavily marked down. By either taking these at the latest mark, or standardizing these marks across banks of the (relatively) more price transparent assets, the pricing issue – setting the correct price to protect taxpayers – could be avoided. The impact of this move would remove further downside uncertainty for the banks, freeing them up from those assets (while at the same time transferring all future upside to the government as well). However, that pool would be limited to those deemed sufficiently marked down to be able to avoid both price uncertainty and the potential that by setting too low of a price, further capital inadequacy issues would be exacerbated. These were the core problems of the first TARP program.

Ring fencing

This approach has two attractions. First, it avoids having to deal with the pricing issue. This is important for loans with no ready price an"

Related articles by Zemanta

• Let's start a bank (economist.com)
• E. Glen Weyl: Put the Bankers Back to Work (huffingtonpost.com)
• Meet Small Banks That Are Doing It Right (abcnews.go.com)
• Everybody's Business: From Bad to Worse, but Far From the Worst (nytimes.com)

Banks on Life Support

Image via Wikipedia

The coming tidal wave of consumers falling behind on their credit cards and other debt will keep banks in sorry shape for the next year or more, Oppenheimer analyst Meredith Whitney told CNBC Wednesday.

“The big banks are going to be on life support for at least 18 months, if not 36 months,” she said. “The big banks will not fail, but the big banks will not grow, in my opinion, for at least another two years.”

Her remarks underscore recent comments by the nation’s top bankers. Bank of America CEO Ken Lewis says he anticipates the credit card industry will experience record losses. Lewis’ predecessor Hugh McColl recently told the San Francisco Business Times that it will take time for the economy to work its way through unwinding the credit bubble. And when he says time, he’s talking years, not months.

“Individuals are over-leveraged,” he said, adding that he’s speaking as an industry observer and not on behalf of BofA (NYSE: BAC).

Related articles by Zemanta

• Meredith Whitney: Banks On Life Support For Next 18 Months
• Bruce Hammonds Retires as Head of Bank of America Global Card Services
• After $1tn cost of housing collapse, America is now bracing itself for the credit card bill
• Credit Card Crunch

Bloomberg.com: Exclusive

Image via WikipediaBarclays Dickers on Loan Waivers as European Banks Fight More Writedowns: Royal Bank of Scotland Group Plc and Barclays Capital are staving off writedowns by propping up European companies with plummeting loan values."

Related articles by Zemanta

• Barclays issues surprise trading statement
• Barclays in £1bn credit writedown

Bloomberg.com: Exclusive

Bloomberg.com: Exclusive: "Making a Point

When Bair found herself in control of IndyMac in July, she used the bank to make her point. She suspended foreclosures on $15 billion worth of mortgages and sought to work out deals for the 60,000 borrowers who were behind in payments.

``My hope is that the program for IndyMac Federal Bank will be a catalyst for others across the country to modify their loans more rapidly and systematically,'' she told lawmakers at a hearing last month."

Related articles by Zemanta

• IndyMac Bank Closed by OTS - FDIC Named Conservator
• IndyMac assets seized after unprecedented run
• Failed IndyMac under investigation by FBI