Bailout Fail

Large Depositors in Cyprus Lose 47.5% of Their Deposits. Good!

"If the principle of 'depositor beware' were allowed to spread across the world and down to every dollar or euro deposited, the world would then have something resembling a free market in banking. Every banker would know that a bank run on his bank could wipe it out at any time. Bankers would become far more careful with depositors’ money. Banking would become less inflationary. The world would be better off. The bankers in the rest of Europe are terrified that the 'Cyprus solution' will spread to their nations. That would place final authority in the hands of depositors. This thought terrifies bankers." Continue reading →

Continue ReadingLarge Depositors in Cyprus Lose 47.5% of Their Deposits. Good!

Obama’s Auto Industry Bailouts in 2009: Taxpayers Lose, Big Time

"Despite surges in revenue and a catalog of new vehicles produced by the U.S. auto industry, taxpayers are still suffering from the 2009 bailouts, as General Motors (GM) would have to peddle their stock for $95.51 per share for taxpayers to break even, according to a government watchdog report published Wednesday. Even with a 25-percent spike in the price this year, that’s still well over twice what shares are selling for today, with the price currently lingering around $37 per share — meaning there’s little faith that taxpayers will break even on the nearly $50-billion GM bailout." Continue reading →

Continue ReadingObama’s Auto Industry Bailouts in 2009: Taxpayers Lose, Big Time

IMF approves 1.7 bn euro loan payout to Greece

"The International Monetary Fund released 1.72 billion euros ($2.29 billion) in aid for Greece on Monday after completing a review of the country's performance under the international rescue program. The latest disbursement means that Greece has received a total of roughly 8.24 billion euros ($10.94 billion) from the IMF under the bailout coordinated with the European Union and the European Central Bank in March 2012. Greece was first bailed out for 110 billion euros in 2010 but when that failed, got a second rescue worth 130 billion euros plus a private sector debt write-off totaling more than 100 billion euros." Continue reading →

Continue ReadingIMF approves 1.7 bn euro loan payout to Greece

Should Detroit’s Bankruptcy Be an Early-Warning Sign for Washington?

"There’s no way a bailout of Detroit goes through the House of Representatives. Heck, I don’t even think it could make it through the Senate. So some folks on the left would be justified if they asked why the high rollers on Wall Street supposedly deserved a bailout a few years ago but they don’t get one today. The answer, of course, is discrimination by color. But I’m not talking black vs white. The color that matters in politics is green. The financial industry dispenses huge campaign contributions to both sides of the aisle, and the bailout was their payoff. Public employee unions, by contrast, give almost every penny of their money to Democrats." Continue reading →

Continue ReadingShould Detroit’s Bankruptcy Be an Early-Warning Sign for Washington?

Cyprus Depositor Bail-In Set At 47.5%

"The government of Cyprus, the Bank of Cyprus and international lenders have come to an agreement that will recapitalize the bank and allow it to remain solvent: all depositors at the bank will have 47.5% of all funds above the deposit insurance threshold of $100,000 seized to pay for the bank’s bad debts. Since the original depositor bail-in plan was announced in March, the idea has been very warmly received by governments around the world. The governments of Japan, Canada, the European Union, Switzerland, Australia and New Zealand have all endorsed or taken preliminary steps toward potentially implementing similar plans if necessary in their own countries." Continue reading →

Continue ReadingCyprus Depositor Bail-In Set At 47.5%

TARP Audit: Housing Recipients Re-Defaulting in Alarming Numbers

"Nearly one-third of the homeowners who got help through the government's main foreclosure prevention program are defaulting again on their mortgages, according to a government watchdog's report. The Home Affordable Modification Program (HAMP) has worked on 1.2 million mortgage modifications since it started four years ago. Of those, more than 306,000 borrowers have defaulted again on their loans, and another 88,000 are at risk as well. The Special Inspector for the Troubled Asset Relief Program (SIGTARP), which conducted the review, said homeowners are also more likely to default again on the modified loans the longer they stay in the program." Continue reading →

Continue ReadingTARP Audit: Housing Recipients Re-Defaulting in Alarming Numbers

TARP Audit: Housing Recipients Re-Defaulting in Alarming Numbers

"Nearly one-third of the homeowners who got help through the government's main foreclosure prevention program are defaulting again on their mortgages, according to a government watchdog's report. The Home Affordable Modification Program (HAMP) has worked on 1.2 million mortgage modifications since it started four years ago. Of those, more than 306,000 borrowers have defaulted again on their loans, and another 88,000 are at risk as well. The Special Inspector for the Troubled Asset Relief Program (SIGTARP), which conducted the review, said homeowners are also more likely to default again on the modified loans the longer they stay in the program." Continue reading →

Continue ReadingTARP Audit: Housing Recipients Re-Defaulting in Alarming Numbers

Greece May Need Billions More in Emergency EU Aid

"The Greek recovery may be facing yet another hurdle. According to German daily Süddeutsche Zeitung, the beleaguered country needs another massive influx of money if it is to avoid insolvency. The paper cites an unnamed official at the European Commission as saying that the "financial gap" could be as large as €10 billion. The news comes at a difficult time for Greece and its relations with Germany. German Finance Minister Wolfgang Schäuble is highly unpopular in Greece for his consistent insistence on austerity. And with German elections looming in September, it seems unlikely that additional aid money for Athens will be forthcoming anytime soon." Continue reading →

Continue ReadingGreece May Need Billions More in Emergency EU Aid

Idea of Euro Exit Finds Currency in Portugal

"A book by a Portuguese economist achieved a small feat on its release last month: It instantly topped Portugal's bestseller list. The book, 'Why We Should Leave the Euro' by João Ferreira do Amaral, has helped ignite a public debate in Portugal about the real cause of the country's economic pain. Communist parties in Portugal and Cyprus have turned against euro membership. Two parties in Italy's Parliament want a euro referendum. And two small anti-euro parties recently formed in depression-hit Greece. Even in prosperous Germany, angst about the cost of euro-zone bailouts has led to the launch of an anti-euro party, Alternative for Germany." Continue reading →

Continue ReadingIdea of Euro Exit Finds Currency in Portugal