Monthly Archives: April 2016

Forbes: Five Biggest U.S. Banks Control Nearly Half Industry’s $15 Trillion In Assets

This is an article in 2014.

DEC 3, 2014 @ 10:37 AM

Bank concentration

Forbes:

The wreckage of the financial crisis led to pages upon pages of financial reform aimed at ending the era of Too Big To Fail, but six years after the banking system blew up the five biggest firms control 44% of the $15.3 trillion in assets held by U.S. banks according to data compiled by SNL Financial. Those banks — JPMorgan Chase JPM -0.63%, Bank of America BAC -1.56%, Wells Fargo WFC -0.85%,Citigroup C -0.96% and US Bancorp USB -1.02% — collectively held $6.8 trillion in assets as of Sept. 30.

JPMorgan holds just over $2 trillion in assets, or 13.1% of the industry’s total, followed by BofA at $1.5 trillion (9.9%), Wells Fargo just under $1.5 trillion (9.7%) and Citi at $1.4 trillion (9%), before a substantial dropoff to US Bank at $387 billion (2.5%).

SNL’s analysis, which considered only commercial banks, notes the drastic increase in banking industry concentration over the past few decades. In 1990, the five biggest U.S. banks held less than 10% of industry assets, but that figure has steadily marched higher ever since, pausing only for the year from 1999 to 2000. Today, Wells Fargo, the third biggest bank, controls basically the same percentage of assets the entire top five did in 1990.

That increased concentration is largely thanks to banking industry consolidation that accelerated in the 1990s then hit overdrive after Sandy Weill’s controversial deal to create the modern Citigroup prompted the repeal of Glass-Steagall, the legislation that forced a separation of church and state between commercial and investment banks.

On a side note: According to the OECD, general government gross debt (federal, state, and local) in the United States in the third quarter of 2012 was$16.3 trillion, 108% of GDP. We are at $16.3 trillion in debt while the 5 big banks combined assets could wipe out most or all of the government gross debt. Real sad and yet too dangerous that Congress and government have given so much financial power to the 5 big banks…

Sanders
“Today, you have six financial institutions, the largest six, that have assets that are the equivalent of 60 percent of the GDP of the United States of America.”

Bernie Sanders on Tuesday, October 4th, 2011 in an interview with MSNBC

True

Source: Politifact

 

Is Bernie Sanders Right About The Big Banks?

Summary

The liberal Democratic presidential candidate has advocated breaking up the big banks.

He correctly points out that three of the four biggest U.S. banks entering the 2008 financial crisis are bigger today.

Capitalism’s creative destructive process would have cleansed the banking system, accomplishing Bernie’s goal.

“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.” – Jesse Livermore

Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria – Sir John Templeton

Life and investing are long ballgames. – Julian Robertson

Introduction

While driving in my home state of Indiana, I heard a radio advertisement by Bernie Sander’s presidential campaign that caught my attention. To paraphrase the personally approved campaign message by Bernie, he describes how three of the four largest U.S. banks that emerged from the 2008 financial crisis have gotten bigger, hinting that the “Too Big To Fail” problem that plagued the banks back then, is an even bigger problem today.

As an ardent believer in capitalism and as someone who has benefited more than many thought possible and been punished worse than many thought possible by decisions in the financial markets, I strangely find myself in agreement with Mr. Sanders.

With that premise, I wanted to take a look at the state of the largest banks today compared to their standing in 2008 and 2007.

Thesis

The largest U.S. banks are indeed larger today and pose a greater risk to the financial system.

The Biggest Banks In 2007

The following is a list of the world’s biggest banks by assets in 2007. The table is from an October 1, 2007, article by author Dan Keeler, published in the Global Finance magazine.

Europe dominated the world’s largest banks by assets in 2007, with Barclays (NYSE:BCS), UBS (NYSE:UBS), BNP Paribas (OTCQX:BNPQY) (OTCQX:BNPQF), and Credit Agricole (OTCPK:CRARY), (OTCPK:CRARF), taking the top four spots, followed by the first U.S. bank in 2007, Citigroup (NYSE:C), at number five. For comparison and reference, Barclays had approximately $2 trillion in assets and Citigroup had $1.9 trillion.

Read on.

A New Twist on Splitting Chairman-CEO Roles at JP Morgan

JPMorgan Chase shareholders should support a proposal to consider an independent chairman, proxy adviser Glass Lewis & Co. said.

The difference in this shareholder proposal, which will be up for a vote at the firm’s annual meeting on May 17, is that it does not specifically target Jamie Dimon, who holds both the chairman and chief executive officer titles.

While the measure is similar to ones shareholders have rejected in the past, it says the board could wait until Dimon leaves New York-based JPMorgan before implementing the plan.

“We ultimately believe vesting a single person with both executive and board leadership concentrates too much responsibility in a single person and inhibits independent board oversight of executives on behalf of shareholders,” Glass Lewis wrote in a report this week and obtained by Bloomberg.

Proxy advisers typically advocate for separating the two most powerful roles at a corporation. But companies and majorities of voting shareholders often ignore the advice.

Read on.

Saterbak Dissected – By Californians for Justice

Deadly Clear

A Guest Post By Californians for Justice

Judith McConnellSaterbak v JPMorgan [Saterbak v JPMorgan, D066636 (Cal. Ct. App. March 16, 2016) Appellate Court attempts to over rule the California Supreme Court requires response from all. Presiding Judge Judith McConnell.

Below is an analytical response to the horrific ruling and opinion from the San Diego Appellate court that directly challenges the recent Yvanova vs. New Century Mortgage Corporation ruling from the Cal Supreme Court. We suggest that folks read this analysis and forward it with their comments to Kamala Harris (California State Attorney General) requesting her office to strongly object to this Saterbak ruling, and request that the Attorney General request that the Supreme Court de-publish the Appellate ruling.

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Protester Blockade Forces Trump To Ditch Car, Approach CA Event On Foot

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Welcome to California, Donald! This is pretty sad that this protest is at the Hyatt Regency in Burlingame since I stayed at that hotel for an event years ago. Burlingame is nice city to visit. It is too bad that the city is trashed because of Trump’s visit and rally. It will be interesting the outcome of Clinton and/or Sanders’ campaign visit in that area and that is if either one of them visits the city.

 

As the GOP frontrunner’s motorcade neared the Hyatt Regency Hotel, the cars made a U-turn and pulled to the shoulder of the freeway, allowing Trump and his entourage to disembark and proceed to a side entrance on foot.

Outside the event, protesters carried signs decrying Trump’s rhetoric about immigrants and minorities. A few knocked barricades aside in an effort to enter the hotel and were pushed back by security guards wielding batons.

 

 

Former SunTrust Mortgage VP, his wife, her brothers sent to jail for mortgage fraud

This conspiracy was all in the family

For Mohsin Raza, his wife, Humaira Iqbal, and her brothers Farukh Iqbal and Mohammad Ali Haider, committing mortgage fraud really was a family affair.

And, as it turns out, the family that plays together also goes to jail together.

According to the U.S. Attorney’s Office for the Easter District of Georgia, Raza, his wife, Humaira, and her brothers will each serve time in federal prison for their roles in a scheme that saw the group falsify loan documents and commit mortgage fraud while all four were employed by SunTrust Mortgage in the 2000’s.

The U.S. Attorney’s Office stated that in 2005, Raza was hired to serve as vice president at SunTrust Mortgage, and the company then tasked him with opening a new office location in Annandale, Virginia.

Raza staffed the office with his wife and her brothers. Farukh Iqbal and Mohammad Ali Haider joined the company and served as loan officers.

From the time they joined the company until they left in 2007, the group falsified loan applications for borrowers and purchased fake tax documents to support the false loan applications.

According to court documents, SunTrust Mortgage underwriters approved the loans, which totaling several million dollars, based in large part upon the fake documents in the files, and ultimately borrowers were given loans to buy homes that they could not afford.

Read on.

Notices issued to all those named in Panama Papers: Government

NEW DELHI: Government today said in the Lok Sabha that it has issued notices to all the people named in the Panama Papers but tax laws do not allow the proceedings to be made public till cases are filed in courts.

Responding to questions on tax evasion and black money, Finance Minister Arun Jaitley said in the Panama Papers leak case, notices have been issued to all those whose names have appeared.

The minister explained that Section 138 of the Income Tax Act bars the proceedings of a case be made public till a case is filed in a court.

Meanwhile, responding to another supplementary, Minister of State for Finance Jayant Sinha said the government is looking into papers received from HSBC and Panama and the various laws, including the one on foreign black money, are being invoked.