Melvin Willis, a 22-year-old activist from Richmond, Calif., tried to put Wells Fargo CEO John Stumpf under citizens’ arrest last week.
Guess who was escorted away by security guards?
Click here to read my column on MarketWatch.
Banking Crisis
The economic collapse of Cyprus could come as early as Monday if the Mediterranean island nation can’t secure a bailout by then.
Click here to read more from Reuters. (UPDATE: Deal reached. Click here to read about it.)
Cypriots are cutting it close with 11th hour meetings with European Union leaders on Sunday.
If Cyprus defaults on its debt and makes a messy exit from the European Union, it sets a precedent for other nations to do the same. Already, it is the fifth of 17 member nations to require a bailout, and no one quite knows how its problems could spread. One of Cyprus’ problems, of course, is that it bought the bad debt of another troubled EU member, Greece.
With so much at stake, it’s astonishing to watch Europe scramble over the weekend. With so much at stake, chances are good leaders will have to figure out something. If they can’t, it’s a good sign the global strategy of kicking that proverbial can down the road, is nearing the end of the road.
The idea of taxing bank deposits didn’t go down so well on the financially sinking island of Cyprus.
Click here to read the latest on that from The Wall Street Journal.
But the fact that European banking authorities even proposed this confiscatory solution is a bad sign of what could happen when banks fail and debt-ridden nations no longer have the political will or the ability to bail them out.
America, of course, is a long way from even considering a proposal like this. It doesn’t have to because it’s central bank can keep printing money. Today, in fact, the Federal Reserve is expected to say that it will continue purchasing bonds and mortgage-backed securities to the tune of $85 billion a month.
Holding interest rates as near to zero as possible – like the Cyprus Solution – is just another way to punish savers for the sins of the borrowers who helped cause the banking crisis.
Click here to read my column on MarketWatch.
If you or I stood accused of laundering money for Mexican drug cartels or moving blood money around for the terrorist state of Iran, do you think prosecutors would let us off with a fine?
This is what they do for banks. HSBC is reportedly nearing a deal to pay a $1.9 billion settlement to settle money laundering charges. Click here to read the details from the New York Times.
These are major, international crimes being alleged, yet no one is going to the pokey.
On Monday, British bank Standard Chartered settled similar charges for $327 million settlement.
The lesson here is simple: Always to make more money than you’ll have to pay if you get caught. This is why the scandals never end.
If Vikram Pandit’s abrupt exit from Citigroup is a surprise, it’s a nice one.
How difficult is it to run a bank while the federal government showers it with billions of dollars in bailout money, and then the Federal Reserve lowers interest rates to zero and starts buying up billions in mortgage-backed securities that few others dare to buy.
All’s that’s left to do is jack up credit card rates as high as 30% and – abracadabra – you’ve got a license to print money.
The most telling thing about Mr. Pandit, and this bumbling oversized bank, is that Citi paid him about $200 million for his hedge fund and soon had to close it down.
Under Mr. Pandit’s tenure, Citi has been the worst performing of the too-big-to-fail banks.
I go along with just about everything former Federal Deposit Insurance Corp. CEO Shelia Bair has said about Mr. Pandit. Her new book, Bull By The Horns, is filled with observations about Mr. Pandit, like “he wouldn’t have known how to underwrite a loan if his life depended on it.”
Click here to read some Ms. Bair’s most recent comments. She says Citi’s board is finally doing its job by getting rid of him. My only question is what took so long? The guy is an empty suit.
Click here to read a column I wrote about Mr. Pandit in 2010. He couldn’t even answer a simple question posed to him by an audience member where he was speaking.
How much will Citi pay for its next too-big-to-fail CEO?
When the father of the too-big-to-fail bank suddenly announces that it’s time to break up the too-big-to-fail banks, it’s probably time to break them up.
In what will go down in history of a classic example of “Now, he tells us,” former Citigroup CEO Sandy Weill told CNBC the big banks should be broken up so that they do not impose additional risks on taxpayers. Citigroup, which he built through a series of mergers, required a $45 billion bailout from the federal government.
Weill’s comments are just more proof that even bankers are getting sick of banks. Or maybe they are just beginning to realize that they will be more valuable in pieces.
Click here to read my column in The Sunday Wall Street Journal.
“Hmm. Let’s see,” said the too-big-to-fail bank executive. “What ridiculously stupid, self-destructive thing can we accomplish today?
“I know, let’s sue ourselves.
“Yes, let’s sue ourselves. Let’s file a complicated foreclosure lawsuit against ourselves!”
This is apparently what some bailed-out bankers have been thinking as they continue to sift through the wreckage of their self-inflicted mortgage disasters. Click here to read a story by Zach Carter of the Huffington Post called “Bank of America Sues Itself.”
My thanks to Carter for digging up a similar piece I wrote in 2009 about Wells Fargo suing itself.
Click here to read that yarn, which I’d heard about from lawyers in Tampa, Fla. who run the Consumer Warning Network. Somehow, I’d forgotten all about this bizarre tale. Glad to see it cited years later.
This situation still makes me laugh out loud at my keyboard. And the next thing you know, these same bankers will be lobbying for tort reform, complaining about how all the lawyers are just ruining their business.
Citigroup didn’t just hide bad mortgages from the government, it celebrated its employees who did this most successfully.
Click here to read my column in The Sunday Wall Street Journal.
A $25 billion settlement between the federal government, 49 states, and America’s five biggest banks does little to address the causes of the housing crisis.
Click here to read my column in The Sunday Wall Street Journal.
Click here to watch me talk about it with Matt Flener, anchor at Denver’s NBC affiliate 9News.
So now the Obama Administration and the Justice Department is setting up a mortgage fraud task force?
Three years after the height of a financial crisis caused by systemic mortage fraud?
So far, I can only think of one mortgage company CEO who has been sent to prison, Paul R. Allen, 55, of Oakton, Va., former CEO of Ocala, Fla.-based Taylor Bean & Whitaker. Click here to read my column on that case. Meantime, plenty of little people have gone to jail for peddling mortgages as fast as they could to meet market demand. Click here for my column on one of them.
Anthony Accetta, a former U.S. attorney who used to prosecute mortgage fraud, was seething at the obvious cases of mortgage fraud at the highest levels of Wall Street before the financail crisis began. Now, he’s concerned that the government has put off investigations for so long that prosecutors risk running into statutes of limitations. He was beside himself after Obama’s announcement, calling it too-little, too late.
“Does he think we’re all stupid?”
