Some news items are catching our attention.
Stress Test + PPIP + CAP = getting banks to recognize losses
In the FT we read:
"The government’s toxic assets plan will force banks such as Citigroup, Bank of America and Wells Fargo to take large writedowns on their loans, requiring them to raise more capital from taxpayers or investors, executives and analysts have warned. Senior bankers say the authorities’ latest drive, announced on Monday, to cleanse financial groups’ balance sheets by encouraging investors to buy troubled residential and commercial mortgages will prompt banks to record losses on those portfolios. “The unspoken fear here is that selling off loan portfolios would lead to more government capital injections into major banks,” said an executive at a large bank."
Goldman Sachs is going to repay 10 bln of funds received from the government’s TARP recapitalization plan. Bonuses are more important than anything else, it seems, for the greedy boys of GS. Some smaller banks have already signaled plans to repay TARP money, citing concern over changes in terms of the scheme and compensation restrictions. Marin Bancorp, IberiaBank, Signature Bank, Sun Bancorp and TCF Financial have all applied to repay a combined $689m of TARP funds.
The rally in equities, fixed income, the $ selloff… all seemed to be losing momentum yesterday, although some deceleration/pullback is to be expected after the 50 bps move in treasuries post-FOMC and the historic rally in US shares on Monday.
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Stress Test + PPIP + CAP = getting banks to recognize losses
In the FT we read:
"The government’s toxic assets plan will force banks such as Citigroup, Bank of America and Wells Fargo to take large writedowns on their loans, requiring them to raise more capital from taxpayers or investors, executives and analysts have warned. Senior bankers say the authorities’ latest drive, announced on Monday, to cleanse financial groups’ balance sheets by encouraging investors to buy troubled residential and commercial mortgages will prompt banks to record losses on those portfolios. “The unspoken fear here is that selling off loan portfolios would lead to more government capital injections into major banks,” said an executive at a large bank."
Goldman Sachs is going to repay 10 bln of funds received from the government’s TARP recapitalization plan. Bonuses are more important than anything else, it seems, for the greedy boys of GS. Some smaller banks have already signaled plans to repay TARP money, citing concern over changes in terms of the scheme and compensation restrictions. Marin Bancorp, IberiaBank, Signature Bank, Sun Bancorp and TCF Financial have all applied to repay a combined $689m of TARP funds.
The rally in equities, fixed income, the $ selloff… all seemed to be losing momentum yesterday, although some deceleration/pullback is to be expected after the 50 bps move in treasuries post-FOMC and the historic rally in US shares on Monday.
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