Elizabeth Warren Reads Riot Act to Holder for Not Prosecuting Big Bank Mortgage Fraud

Okay, so Senator Warren actually wrote a polite, detailed letter to Attorney General Holder. There was no shouting or acrimony.

However, in Washington, for a freshman senator to imply in official correspondence made public that the Department of Justice is not doing its job in investigating, prosecuting and even fining banks and secondary lenders in regards to multiple counts of mortgage lending violations is akin to a freshman at high school accusing the principal of letting teachers steal milk money from the desks of students.

It may be professional in tone, but Warren's letter is a direct challenge to the criminal impunity provided to and limited fines assessed by the DOJ on Wall Street for their multiple schemes to defraud both mortgage borrowers and investors.

The Huffington Post featured the letter, which bluntly states:

I am concerned that this might be yet another example of the federal government's timid enforcement strategy against the nation's largest financial institutions. I believe that if DOJ and our banking regulatory agencies prove unwilling over time to take the big banks to trial or even require admission of guilt when they cheat consumers and break the law -- either out of timidity or because of a lack of resources -- then the agencies lose enormous leverage in settlement negotiations.

There are a number of federal agencies involved in the lax regulation and minimal punishment (no jail time) of the financial industry for its role, particularly in the creation of a toxic subprime mortgage scam, in the economic collapse that burst open in the autumn of 2007. Read more >>

Bank Of China Declares Moratorium On Transfers, Online Banking

A Bank of China HK$20 note 

From Caijing, google translated. We hope the gist of the narrative in Mandarin is far less scary, because if the translation is even remotely accurate, then all hell may be about to break loose in China.

From Caijing: Bank of China, Bank of suspension of transfers morning counters were unable to apply for online banking

Update: Customer service said, now silver futures transfer service has been fully suspended, online banking, the counter can not be handled, and now has the background system response, recovery time is not yet known

Following the ICBC, the Bank of China also go awry again. This morning, the Bank of China Bank moratorium on transfers, online banking, counters are inoperable.

10:00 many, many people began to receive messages sent to the Bank of China, "the end result of the Bank of China Bank failures, bank customers can not carry on through the Bank transfers, please Bank online banking, bank counter or use of other bank transfer system, Bank system will be restored promptly notify you." large number of transfer business banking needs of the people turned to online banking, counter, but according to the instructions of the public still found text messages can not handle.

Reporters call the BOC, customer service said, now silver has been fully suspended phase transfer services, online banking, the counter can not be handled, and now has the background system response, recovery time is not yet known.

As of 12:00, the Bank customer service said handle part of the user's online banking has been restored. Read more >>

Job Insecurity High as Layoffs Show Huge Surge

The number of planned layoffs at U.S. firms fell in March but downsizing by retail companies still helped the first quarter rack up the largest amount of cuts in over a year, a report showed on Thursday. Employers announced 49,255 planned job cuts last month, down 11 percent from 55,356 in February, according to the report from consultants Challenger, Gray & Christmas.

But March's layoffs were still up 30 percent from the same time a year ago, the fourth time in the last six months that monthly job cuts have been higher than the year before. For the quarter, there were 145,041 workers let go, up 5.6 percent from the fourth quarter of last year. It was the worst quarter for layoffs since the third quarter of 2011.

Retailers cut the most employees in March, announcing 16,445 layoffs, up from 2,279 in February. In the first three months of the year, retail firms have cut 25,400 jobs, second only to the financial sector's 33,819 for 2013 so far. Read more >>

Retirement confidence at record low

Despite improving economic conditions, a record percentage of American workers remain worried that they won't be able to afford retirement.

They're worried about their jobs, high debt levels and rising living expenses, according to a survey released Tuesday by the Employee Benefit Research Institute.

Only 13% of workers surveyed said they "feel very confident" that they will be able to retire comfortably — less than half the percentage reported in 2007. Nearly half -- 49% -- said they were "not too" or "not at all" confident.

A large chunk of the workers surveyed have little or no retirement savings. Of those who provided estimates, 57% reported household savings and investments of less than $25,000, which included 28% of respondents who said they had less than $1,000. Only 24% reported savings of $100,000 or more.

Debt is standing in the way of saving. More than half of workers reported having a problem with their level of debt, while only about half of those surveyed said they could definitely cover $2,000 worth of unexpected expenses within the next month. Read more >>

Study Shows More Americans Are Raiding 401(k) Accounts To Pay Bills

A new national study shows that too many of us are cashing out 401(k) accounts to pay bills. If that retirement account is calling your name, a financial expert advises you to stop listening.

When the bills pile up and money is tight, many people turn to their 401(k) accounts to help ease the bind.

Downingtown, Pa. CPA Jacquelyn Basso says it’s not a good idea to raid your retirement; you’re getting money now that you’ll need to live on when you’re older. Read more >>

Young adults too broke to get loans

It's not because legions of Americans under age 35 have suddenly become fiscally responsible. It's more likely that their shaky economic foundations either prevent them from qualifying for a loan or even thinking about applying for one, according to those studying the trend.

"It's a sign of economic struggle, not economic success," said Richard Fry, senior economist at the Pew Research Center. "They don't have the mortgage, but they don't have the house."
The center found that young adults' debt levels dropped nearly 14% between 2001 and 2010, while rising 63% for those age 35 and older, according to a recent Pew study.

The real-world ramifications are eye-popping. The share of younger households owning their primary residence fell to 34% in 2011, down from 40% in 2007. Only 66% owned or leased at least one vehicle in 2011, down from 73% four years earlier, as car loans plunged. Credit card balances have also fallen.

The only debt on the rise is student loans. In 2007, just over a third of young households had outstanding student debt. That jumped to 40% in 2010. Read more >>

Banking job cuts near 160,000

Banks worldwide are shedding jobs as stricter regulations and euro zone worries take their toll on trading income and investment banking units. Many began outlining layoffs plans 18 months ago and are now cutting more deeply as they reassess their entire business to cope with tougher capital rules, while some are cutting because of acquisitions or mergers they are involved in.

Switzerland's UBS in October added 10,000 job cuts to the 3,500 it had earmarked last year, after deciding to exit most of the rates and debt trading. Staff cuts announced since mid-2011 or reported to be in the works at major banks have now reached 158,000.

Below are aggregates of various redundancy rounds. They are likely to be conservative figures, as not all banks have announced lay-offs publicly, and the number does not take into account smaller investment banks, boutiques and brokers. Read more >>

Wal-Mart, Amex to Offer Alternative to Debit, Credit Cards

The two companies said Monday that Bluebird, which began during a pilot program late last year, will have no minimum balance and no monthly, annual, or overdraft fees. They said that the only fees that will be associated with the card will be transparent and within the user's control, such as out of network ATM withdrawals by consumers that don't have direct deposit.

Wal-Mart Stores and American Express view the card as an alternative to debit and checking accounts, which will help consumers better manage and control their finances. The companies say Bluebird was built on feedback from consumers, who said they were bothered by the rising fees related to checking accounts and debit services.

"Our customers tell us that they're tired of navigating a complex maze of do's and don'ts to avoid the ever growing list of fees found on checking products," Daniel Eckert, vice president of financial services for Walmart U.S., said in a statement. Read more >>

Manhattan Office Vacancies Rise the Most in Three Years

Manhattan’s office vacancy rate jumped the most since 2009, when the market was reeling from the U.S. credit crisis, as financial companies cut jobs and tenants held back from taking space amid concern the economy will slow.

The rate reached 9.6 percent in the third quarter, an increase of 0.6 percentage points from the previous three months, Cushman & Wakefield Inc., a New York-based commercial real estate services firm, said in a report today. That was the biggest jump since the third quarter of 2009, when the bankruptcy of Lehman Brothers Holdings Inc. and its aftermath spurred a surge in vacancies in the largest U.S. office market.

The recent increase in empty space reflects job cuts in banking and finance, the city’s biggest private office-using industry, according toKen McCarthy, senior economist at Cushman. Financial-services companies eliminated about 9,600 jobs in New York from May to August, he said in an interview, citing data from the U.S. Bureau of Labor Statistics. Read more >>

British Bank gets slap on wrist for Laundering hundreds of billions in tainted money with Iran

New York’s top banking regulator reached a settlement on Tuesday with Standard Chartered over charges that the British bank laundered hundreds of billions of dollars in tainted money with Iran and deliberately lied to regulators.

The bank agreed to pay $340 million to the Department of Financial Services, which is led by Benjamin M. Lawsky. “The parties have agreed that the conduct at issue involved transactions of at least $250 billion,” Mr. Lawsky said in a statement.

Tuesday’s cease-fire between the state regulator and Standard Chartered marks a big win for the department, which was formed last year.

As part of the settlement, the bank will install a monitor for at least two years to vet the bank’s money laundering controls. In addition, the bank agreed to put in permanent officials who will audit the bank’s internal procedures to prevent offshore money laundering. Read more >>

Many Use Payday Loans to Cover Food, Rent

Many people think of payday loans as a way to cover an unexpected emergency – such as a car repair or medical expense – until your next paycheck comes in. But nearly seven in 10 people who use the short-term, high-fee loans rely on them for recurring, everyday expenses such as rent, food, utilities or car payments, according to a report published Wednesday.

And instead of using them for one quick fix, many are either seeking extensions or borrowing similar amounts again and again. That’s putting many people in debt to payday lenders for months at a time, at very high cost. “It’s not because of some unusual need that people are turning to payday loans. It’s because of some regular need,” said Nick Bourke of the Pew Center on the States, which published the report.

Payday lenders defend their industry, saying today's economic  reality is that many people regularly need a financial bridge to their next paycheck. “Of course there’s recurring use for this product. It’s often the best option for millions of Americans that are looking to manage their financial obligations,” said Amy Cantu, spokeswoman for the Community Financial Services Association of America, a trade group for payday lenders.

The Pew researchers found that parents are more likely to use payday loans than people without kids, especially if the household income is less than $50,000 a year, about the nation's median. In addition, people who are separated or divorced are more likely to use them than those who are married or single. Read more >>

Europe's Next Bailout: Italy

Business Insider
While analysts have been making a big deal about the bank bailout in Spain this morning, it is important not to forget about Europe's next-biggest problem: Italy.

Yields on Italian government bonds are shooting through the roof today, as investors wonder how much stronger Italy's banks are than Spain's.  In neither case, it would appear, to they believe that the bailout has divorced financial sector stress from that on the government.

The Italian FTSE MIB has also lost all its earlier gains, now down 0.6 percent today.

Check out Italian 10-year yields, up 23 bps so far today:

Read more >>

3 Portuguese Banks Lose More Than 660 Million in 5 Days

Bank Millennium 

Cut the rating of Spanish banks and the poor performance of the largest Portuguese banks have caused a loss of more than EUR 660 million in capitalization of the BES, Millennium bcp and the BPI.

Within a year, the market value of the BES, Millennium bcp and the BPI fell 61%. Only at the end of last week, after the rating of Spanish banks have been revised downwards again, the three Portuguese private banks lost more than 660 million in market capitalization.

BES was the bank most penalized, having lost about 570 million of value in exchange, as a result of a fall of 22.26% in the share price. Millennium bcp, that seemed no longer able to fall much more, yet depreciated 4.85%, with its share to fall up to 9.6 cents.

Translated Source

No Retirement Savings for Half of Americans: Survey

Source CNN
About 49% of Americans say they aren't contributing to any retirement plan, according to a new survey conducted by LIMRA, a trade association for the financial services industry. "The findings from this survey were disturbing, given that people will increasingly need to rely on their personal savings to make ends meet in retirement," said Matthew Drinkwater, associate managing director at LIMRA's retirement research division.

People ages 18 to 34 are the least likely to be saving, with 56% reporting that they are not currently contributing to a retirement plan like an IRA or a 401(k). "In order to have the adequate savings necessary to meet their financial needs in retirement -- which could last 20 or more years -- it is critical that these individuals begin saving systematically early in their working years," Drinkwater said.

Nearly half of consumers said they aren't planning to contribute to an IRA because they can't afford to, and only a quarter of Americans have worked with a financial professional to plan for retirement, the survey found.

The Rich Are Getting Richer And Everyone Else is Going Deeper Into Debt

Growing income inequality has led to ballooning debt loads for the bottom 95% of Americans.

 The bottom 95% of Americans have seen debt levels balloon compared to their earnings over the past 20 years or so, as falling incomes made them more dependent on credit to maintain their lifestyles. In 1983, the bottom 95% had 62 cents of debt for every dollar they earned, according to research by two International Monetary Fund economists. But by 2007, the ratio had soared to $1.48 of debt for every $1 in earnings.

The bottom 95% had incomes of roughly $160,000 or less in 2007, including capital gains. And then there's the top 5%. Their debt-to-income level actually fell during the same period, from 76 cents of debt for every dollar earned in 1983, to just 64 cents in 2007. And experts say the picture hasn't changed much since then. 

The debt divide is a result of the growing income gap between the wealthiest Americans and everyone else. The top 5% saw their share of total income rise to 34% in 2007, up from 22% in 1983. This excludes capital gains, which pump up the income of the rich even more since they are more likely to invest. More...

Mortgages Now On Sale at Costco

costco feeding frenzy (Photo credit: jovino)

Not only can Costco shoppers find bulk-packs of chicken wings, 24-rolls of toilet paper and large-screen TVs at a discount, they can now land themselves a mortgage.

After a year of testing, Costco is rolling out a full-service mortgage lending program on its website in partnership with First Choice Bank, a New Jersey-based community bank, and 10 other lenders.

Costco's partners have issued more than 10,000 mortgages to members under the program. But Lauren Kutschka, Costco's manager of financial services, expects that number to swell as the warehouse retailer markets the service more aggressively to millions of members in its stores and in its weekly publication Connection. More...

Student Loans: The Next Bailout?

Here’s what we do know about student loan debt: it’s roughly $1 trillion in size, greater than either auto or credit-card debt and second only to mortgage debt in the U.S.

Borrowers in their 30s today owe $28,500, on average. The debt burden has soared just as — and partly because — the recession hit, so younger graduates carrying the highest balances are hit with the double whammy of a weak job market (that still isn’t showing any sign of rapid improvement).

And this all comes as globalization and technological change have upended once-reliable career paths, wiped out many mid-level professional jobs and leave low-paying fields in health, food and beverage services, and retail as among the fastest growing job markets over the next decade. More...

Planned job cuts up 14% in 2011

Planned job cuts dropped in December but were up 14% overall for 2011, according to a report from outplacement consulting firm Challenger, Gray & Christmas.

December's total of 41,785 announced lay-offs was a 1.6% drop versus November, and was the lowest monthly total since June. Total announced job cuts for 2011, however, hit 606,802, up from the 529,973 announced in 2010.

The increase in cuts was driven primarily by lay-offs in government and financial sector jobs, which together accounted for 41% of all announced job losses.

With pressure on governments at all levels to cut spending and the European debt crisis still unresolved, both these sectors are "likely to continue to struggle in 2012," Challenger CEO John Challenger said in a statement accompanying the report. More...

Jim Rogers: U.S. doesn't deserve AA+ credit rating, much less triple-A

Image via WikipediaThe U.S. doesn't deserve a AA-plus credit rating, much less triple-A, commodity bull and noted investor Jim Rogers told CNBC on Monday.

Rogers said the country was unlikely to be able to pay off its debt and Standard and Poor's rating cut had come too late and should have happened long ago.

"It seems to me it's physically, humanly impossible for the U.S. to ever pay off its debt," Rogers said. "They can roll it over and continue to play the charade, but the U.S. is bankrupt."

Rogers’ comments came during a CNBC interview with the head of sovereign ratings at Standard and Poor's, David Beers.

Beers said that according to S&P's calculations, total U.S. public debt, which includes local, state and federal government debt, will be $11 trillion this year, and will rise to $14 trillion in 2015 and to $20 trillion by 2021.

To put those numbers into perspective, according to the U.S. government's Bureau of Economic Analysis, U.S. annual gross domestic product (GDP) totaled $15 trillion in the second quarter of 2011. More...

Mortgage industry employees still signing unread documents and using fake signatures

Image via WikipediaMortgage industry employees are still signing documents they haven't read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures.

County officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as "robo-signing," remain widespread in the industry.

The documents have come from several companies that process mortgage paperwork, and have been filed on behalf of several major banks. One name, "Linda Green," was signed almost two dozen different ways.

Lenders say they are working with regulators to fix the problem but cannot explain why it has persisted. More...