Are America’s banks prepared to sell their toxic assets? AMERICA’S government is a willing buyer of bad assets, but are its banks willing sellers? If a lender flogs a loan or security for less than the value at which it is booked on its balance-sheet, it suffers a loss, depleting its capital. It follows that if banks’ carrying values are still above those that state-sponsored bidders want to pay, they will not sell voluntarily. Just how optimistic are banks’ books? Two-thirds of the Treasury scheme’s purchasing power will be directed towards legacy loans. America’s ten biggest banks had plenty of these—$3.6 trillion at the end of 2008, or about a third of their assets. However by global convention loans are not marked to market, but carried at cost and impaired gradually. Some categories of risky loans, for example to private-equity firms, have been written down. But the vast majority of loans have not. In aggregate the carrying value of the top-ten banks’ loan books was 3% above the market price in December. That gap may not seem much, but it amounts to over $110 billion; if it were crystallised, it would wipe out a quarter of these banks’ tangible common equity, their purest form of capital. The loss is also likely to be concentrated on the dodgiest loans, making them hard to sell. ...

If in doubt, tweet. That’s what one woman did after waiting for her delayed mortgage application to be approved, according to a story in The Telegraph. Tweeting, if you’re not aware, is the act of getting a message out on Twitter, a social networking tool that allows you to share your current status with the rest [...]

March 31, 2009 — Philadelphia Fed President Charles I. Plosser outlines key principles for sound and effective central banking. He discusses how these principles provide guidance for some of the regulatory and supervisory challenges facing the Fed.

We have now come to the point where the “systemically unimportant” banks of Main Street must, along with the nation’s taxpayers, bail out the “systemically important” Wall Street firms. Not only are a handful of Wall Street CEOs holding a gun to the taxpayers’ heads, they have the banks of Main Street America looking down the barrel as well.

Effective May 1, 2009, Fannie Mae will accept for delivery loans originated in 2009 using the higher of the current permanent high-cost loan limits, or the temporary loan limits that were in place for loans originated in 2008 that were applicable to jumbo-conforming mortgage loans.

Posted By: The Federal Reserve’s latest moves to push down mortgage rates quickly raised expectations about helping the housing recovery, but it may be months before the impact is entirely apparent and the effects may not all be positive, say people in the real estate and housing industries. Topics: | | | | | | | | | Sectors: MEDIA:

Speech at the 13th Annual University of North Carolina Banking Institute, Charlotte, North Carolina

WASHINGTON, March 30 -- The American Bankers Association will host Washington's largest gathering of bankers on March 31 - April 1 at the Marriott Renaissance hotel to hear from key government officials on banking issues.

Posted By: Reuters Fannie Mae, the largest provider of U.S. home funding, on Monday said it shrank its gross mortgage portfolio in February while increasing its mortgage bond issuance mainly due to home loan refinancings. Topics: | | | Companies: MEDIA:

See how the world's leading investment banks are fearing during the credit crunch

"Here is a take-home quote from Charles Mackay's classic tome Extraordinary Popular Delusions and the Madness of Crowds, written in 1841: 'Men think in herds... [and] they go mad in herds.' Just as the astute investor should have resisted joining the thundering herd's mad euphoria, I suggest you resist joining in the current stampede of despair."

WASHINGTON -- President Barack Obama wants to hear from the chief executives of some of the country's biggest banks as he caps a week in which he clarified his overall plan for stabilizing the financial system.

The American Bankers Association will host Washington’s largest gathering of bankers on March 31 – April 1 at the Marriott Renaissance hotel to hear from key government officials on banking issues. More than 750 bankers from across the country will attend ABA’s annual Government Relations Summit and carry ABA’s priority legislative issues to Capitol Hill. Featured speakers for Tuesday, March 31 include: Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee (9:00 – 9:30 a.m.) Scott Polakoff , Acting Director of the Office of Thrift Supervision (9:35 – 10:00 a.m.) John Dugan , Comptroller of the Currency (10:00 – 10:45 a.m.) Featured speakers for Wednesday, April 1 include: Sen. Jon Kyl (R-Ariz.), member of the Senate Judiciary Committee (8:30 -9:00 a.m.) Sheila Bair , FDIC Chairman (9:30 – 10:00 a.m.) Members of the press are invited to attend the portion of the summit during which government speakers will deliver their addresses. The Marriott Renaissance is located at 999 9th Street, NW. NOTE: Cameras must be set up by 8:00 a.m. on both days. Mult-box will be available.

New York Fed purchases $33 billion net ($47 billion gross) in agency mortgage-backed securities.

March 26, 2009 tg-72 Treasury Outlines Framework For Regulatory Reform Provides new Rules of the Road, focuses first on containing systemic risk The crisis of the past 18 months has exposed critical gaps and weaknesses in our financial regulatory system. As risks built up, internal risk management systems, rating agencies and regulators simply did not understand or address critical behaviors until they had already resulted in catastrophic losses. These failures have caused a dramatic loss of confidence in our financial institutions and have contributed to severe recession. Our financial system failed to serve its historical purpose of helping families finance homes and college educations for their children or of providing affordable capital for entrepreneurs and innovators – enabling them to turn new ideas into jobs and growth that raise our living standards. The President's comprehensive regulatory reform is aimed at reforming and modernizing our financial regulatory system for the 21st century, providing stronger tools to prevent and manage future crises, and rebuilding confidence in the basic integrity of our financial system – for sophisticated investors and working families with 401(k)s alike. As Secretary Geithner stated in his testimony today, "To address these failures will require comprehensive reform -- not modest repairs at the margin, but new rules of the road. The new rules must be simpler and more effectively enforced and produce a more stable system, that protects consumers and investors, that rewards innovation and that is able to adapt and evolve with changes in the financial market." Four Broad Components of Comprehensive Regulatory Reform: Addressing Systemic Risk : This crisis – and the cases of firms like Lehman Brothers and AIG – has made clear that certain large, interconnected firms and markets need to be under a more consistent and more conservative regulatory regime. It is not enough to address the potential...

Freddie Mac (NYSE: FRE) announced today that beginning with March 2009 REMIC settlements, the company will offer Reverse REMIC Giant PC securities, a new mortgage-related security intended to provide liquidity to the U.S. residential mortgage market and new options for investors.

Washington, DC – The Federal Housing Finance Agency today reported that the average interest rate on conventional 30-year, fixed-rate, mortgage loans of $417,000 or less decreased 6 basis points to 5.03 percent in February. The average interest rate on 15-year, fixed-rate loans of $417,000 or less decreased 19 basis points to 4.92 percent in February. These rates are calculated from the FHFA’s Monthly Interest Rate Survey (MIRS) of purchase-money mortgages. These results reflect loans closed during theFebruary 23-28 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late January.

submits: The TARP money, which in case anyone has forgotten is a taxpayer subsidy to the largest banks, was supposed to help recapitalize the banks so that they would lend money. For people with even a tiny knowledge of accounting, like me, this was never a credible idea. Money, after all, is fungible. In other words, if you give Citi (C) $30B and it lends $30B there is no way to know how much it would have lent without a the subsidy. The Treasury Secretary knows this, but many members of Congress and other lay people do not which is why, on the one hand, they ask the banks to produce nonsensical reports about "how the money is spent", while on the other complain about the fact that they spend money to compensate their employees.

Atlanta Fed President and Chief Executive Officer Dennis Lockhart speaks about the importance of credit to the flow of trade at a conference in Paris, France.

Sheila Bair's band of bank watchdogs is about to get even busier.