Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65990 Tue, 30 Apr 2024 12:37:58 GMT Republic First Bank Collapses And Seized By FDIC http://implode-explode.com/viewnews/2024-04-30_RepublicFirstBankCollapsesAndSeizedByFDIC.html iehi-feed-65785 Mon, 01 May 2023 15:18:28 GMT First Republic Bank Is Seized by Regulators and Sold to JPMorgan Chase - The New York Times http://implode-explode.com/viewnews/2023-05-01_FirstRepublicBankIsSeizedbyRegulatorsandSoldtoJPMorganChaseTheNe.html Regulators seized control of First Republic Bank and sold it to JPMorgan Chase on Monday, a dramatic move aimed at curbing a two-month banking crisis that has rattled the financial system.

First Republic, whose assets were battered by the rise in interest rates, had struggled to stay alive after two other lenders collapsed last month, spooking depositors and investors.

First Republic was taken over by the Federal Deposit Insurance Corporation and immediately sold to JPMorgan. The deal was announced hours before U.S. markets are set to open, and after a scramble by officials over the weekend.

Later on Monday, 84 First Republic branches in eight states will reopen as JPMorgan branches.

JPMorgan will "assume all of the deposits and substantially all of the assets of First Republic Bank," the F.D.I.C. said in a statement. The regulator estimated that its insurance fund would have to pay out about $13 billion to cover First Republic's losses. JPMorgan also said that the F.D.I.C. would provide it with $50 billion in financing.

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iehi-feed-65758 Sun, 19 Mar 2023 19:40:57 GMT UBS Group doubles offer and acquires Credit Suisse for $2B http://implode-explode.com/viewnews/2023-03-20_UBSGroupdoublesofferandacquiresCreditSuissefor2B.html iehi-feed-65750 Sun, 12 Mar 2023 22:51:59 GMT Crypto-Friendly Signature Bank Shut Down by State Regulators http://implode-explode.com/viewnews/2023-03-13_CryptoFriendlySignatureBankShutDownbyStateRegulators.html iehi-feed-65745 Fri, 10 Mar 2023 17:47:46 GMT Silvergate shutting down operations, liquidating after crypto meltdown http://implode-explode.com/viewnews/2023-03-11_Silvergateshuttingdownoperationsliquidatingaftercryptomeltdown.html Silvergate bank, a central lender to the crypto industry, said on Wednesday that it's winding down operations and liquidating its bank. The stock plunged more than 36% in after-hours trading.

Silvergate has served as one of the two main banks for crypto companies, along with New York-based Signature Bank

. Silvergate has just over $11 billion in assets, compared with over $114 billion at Signature. Bankrupt crypto exchange FTX was a major Silvergate customer.

"In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward," the company said in a statement.

All deposits will be fully repaid, according to a liquidation plan shared on Wednesday. The company didn't say how it plans to resolve claims against its business.

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iehi-feed-65744 Fri, 10 Mar 2023 17:26:40 GMT Silicon Valley Bank Implodes http://implode-explode.com/viewnews/2023-03-11_SiliconValleyBankImplodes.html Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.

Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank's normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank's official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.

As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.

The rise in interest rates was choking the VC- and startup-heavy bank. It was trying an 11th-hour attempt to sell itself in recent days.

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iehi-feed-65638 Thu, 30 Jun 2022 01:01:35 GMT Mortgage Industry Faces More Mass Job Layoffs http://implode-explode.com/viewnews/2022-06-29_MortgageIndustryFacesMoreMassJobLayoffs.html iehi-feed-65632 Wed, 29 Jun 2022 16:48:59 GMT Canada Banning Foreign Home Buyers For Two Years http://implode-explode.com/viewnews/2022-06-29_CanadaBanningForeignHomeBuyersForTwoYears.html iehi-feed-65611 Thu, 02 Sep 2021 18:12:51 GMT Foreclosure Moratorium Alert! Homeowners Scramble To Find Help http://implode-explode.com/viewnews/2021-09-02_ForeclosureMoratoriumAlertHomeownersScrambleToFindHelp.html iehi-feed-65405 Mon, 29 Jun 2020 13:38:39 GMT FLORIDA COVID19 UPDATE: Florida Creates $250M Assistance Fund http://implode-explode.com/viewnews/2020-06-29_FLORIDACOVID19UPDATEFloridaCreates250MAssistanceFund.html iehi-feed-63981 Wed, 30 May 2018 03:33:19 GMT How Will ECB, Fed React to Italian Political Crisis? http://implode-explode.com/viewnews/2018-05-29_HowWillECBFedReacttoItalianPoliticalCrisis.html ... unclear is how the European Central Bank will respond to the turmoil kicked up by Italy, and some strategists say ECB President Mario Draghi would be sure to retain stimulus as needed. The ECB is expected to announce in September that it will put aside its asset purchases, but if Italy's woes spill into the broader economy, that could be in doubt.

"He's completely lost control of the Italian bond market in two weeks," said Boockvar. "I think he's going to do his best to verbally calm nerves, but as far as legally using his balance sheet to help, I don't see what he can do."

But some traders appear to see the Italian situation as enough of a red flag to slow the Fed, particularly after the U.K. Brexit vote led to a market correction.

"The market is still pricing in a Fed hike for next month. It's already in the cards. Why would the Fed not raise interest rates, given the kind of economic data we expect this week?" said Chandler. "Where I really see this having an effect is on the back end, the September hike."

Robert Sinche, chief global strategist at Amherst Pierpont, does not see enough damage from Italy to slow the Fed.

"I think this will be a lot of noise, but I've seen this movie three or four times before. Italy stays in [the euro zone], and life goes on. There could be a little more uncertainty over the summer. They've realized that, which is why they pushed up the election to late July/early August," he said.

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iehi-feed-63917 Thu, 03 May 2018 00:04:47 GMT U.S. stocks close lower on fears the Fed may raise interest rates four times this year http://implode-explode.com/viewnews/2018-05-02_USstockscloseloweronfearstheFedmayraiseinterestratesfourtimesthi.html iehi-feed-63613 Tue, 06 Feb 2018 18:58:22 GMT The Fed's unprecedented slap at Wells Fargo may cost the bank more than merely $400 million this year http://implode-explode.com/viewnews/2018-02-06_TheFedsunprecedentedslapatWellsFargomaycostthebankmorethanmerely.html The bank says this reprimand will cost them between $300 million and $400 million in earnings this year, but that is less than 2 percent of its total 2017 earnings of $22 billion. If that is indeed all it costs the bank, and they successfully pass their review in September, then it's possible that the stock's recent declines could be the end of Wells Fargo's worries.

That said, some analysts have been surprised how quickly the bank was able to estimate an implied quantitative cost for what is essentially a qualitative and broad issue at the bank. In light of that, Wells Fargo passing its review on September 30th will not be a precise science.

Furthermore, there is also the question of long term damage and market share losses from the limit on growth and negative press, particularly at a time when rivals are freer to lend and grow than they have been for years. This is highlighted by rival JP Morgan's recent push into new markets -- many where Wells Fargo has a big presence.

Should they fail the review later this year, and the cap on assets remains, then the extent of impact on Wells Fargo will be far more significant.

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iehi-feed-63372 Thu, 07 Dec 2017 23:03:14 GMT US Bank Exits Wholesale http://implode-explode.com/viewnews/2017-12-07_USBankExitsWholesale.html iehi-feed-63203 Thu, 26 Oct 2017 00:57:03 GMT Well Played - The Republican Tax Cut Strategy | Mandelman Matters http://implode-explode.com/viewnews/2017-10-25_WellPlayedTheRepublicanTaxCutStrategyMandelmanMatters.html ... perhaps even more important was the passage of "reconciliation instructions" that makes a future tax bill filibuster-proof... a final tax cut bill will now only need 51 votes to pass as opposed to 60, and that means it could be passed by Republicans alone.

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The Senate's plan calls for $473 billion in cuts from Medicare over 10 years and more than $1 trillion from Medicaid, which shouldn't be making anyone happy. However, according to a Congressional Budget Office estimate, the bill will also cut spending by more than $5 trillion over the next 10 years, although details are missing.

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With the mid-term elections now only a year away, Republicans are clearly desperate. Having failed in their efforts to repeal and replace the Affordable Care Act, aka Obamacare, and with no other legislative accomplishments to speak of, they are understandably worried about losing the majority in the House of Representatives next fall.

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My point here is that when Republicans were trying to repeal Obamacare, voters made their voices heard, and both attempts failed as a result. This time around, we shouldn't expect the GOP to make the same mistakes they made last time around. In fact, we should expect Republicans to make almost any deal if doing so will make the bill pass.

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iehi-feed-62160 Sat, 29 Apr 2017 12:46:43 GMT $1B Louisiana bank failure is costliest since financial crisis http://implode-explode.com/viewnews/2017-04-29_1BLouisianabankfailureiscostliestsincefinancialcrisis.html Regulators on Friday seized New Orleans-based First NBC Bank in the costliest bank failure since the financial crisis, with cleanup costs estimated at $1 billion .

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The billion-dollar loss comes from the difference in the FDIC's obligations and what it can expect to collect from the assets. The last time the FDIC paid more than $1 billion to absorb losses was when two banks in Puerto Rico failed in 2010.

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First NBC was founded in 2006 and proclaimed its mission to be helping Louisiana rebuild from Hurricane Katrina. The bank got in trouble in part because it became unusually reliant on projects that revolve around federal tax credits for low-income or less developed areas. The bank would finance projects and get tax credits good in the future. But regulators decided that First NBC was overstating the value of those tax credits, forcing the bank to write down their value. Regulators increased scrutiny and ordered the bank to raise capital, but the bank had to set aside another $86 million in the last three months of 2016 to cover increasing loan losses.

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iehi-feed-62149 Thu, 27 Apr 2017 14:53:20 GMT Canada's Biggest Mortgage Lender Crashes; Gets Rescue -- End of Line For Housing Bubble? http://implode-explode.com/viewnews/2017-04-27_CanadasBiggestMortgageLenderCrashesGetsRescueEndofLineForHousing.html Today... the stock of Home Capital Group cratered by over 60%, its biggest drop on record, after the company disclosed that it struck an emergency liquidity arrangement for a C$2 billion ($1.5 billion) credit line to counter evaporating deposits at terms that will leave the alternative mortgage lender unable to meet financial targets, and worse, may leave it insolvent in very short notice.

As part of this inevitable outcome, one which presages the company's eventual disintegration and likely liquidation, Bloomberg reports that the non-binding rescue loan with an unnamed counterparty will be secured by a portfolio of mortgage loans originated by Home Trust, the Toronto-based firm said in a statement Wednesday. Home Capital shares dropped by 61% in Toronto to the lowest since 2003, dragging down other home lenders. Equitable Group Inc. fell 17 percent, Street Capital Group Inc. fell 13 percent, while First National Financial Corp. declined 7.6 percent. In short, the Canadian mortgage bubble has finally burst.

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iehi-feed-62114 Fri, 21 Apr 2017 01:27:53 GMT Ocwen Sued, Shut Down in Multiple States http://implode-explode.com/viewnews/2017-04-20_OcwenSuedShutDowninMultipleStates.html There are bad days, and worse days, and there are days like Ocwen Financial Corporation (OFC) had on Thursday. The company was not only sued on multiple grounds by both the Consumer Financial Protection Bureau (CFPB) and the State of Florida, but saw its operations effectively shut down by the North Carolina Commissioner of Banks.

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First, the North Carolina commissioner, Ray Grace, issued a cease and desist order against the company after a determination that it "has engaged in, or is engaging in, or is about to engage in, acts of practices constituting violations of state and federal law and applicable regulations."

... On February 28, 2015, Florida, Maryland, Massachusetts, Mississippi, Montana, and Washington conducted a multi-state examination of the company covering operations from January 1, 2013 to the examination date. That examination identified several violations of state and federal law including consumer escrow accounts that could not be reconciled and willful and ongoing unlicensed activity in certain states. The examination also found that the company's financial condition was deteriorating.

The order alleges the company subsequently failed to respond to requests for information on its apparent unlicensed activity and company executives were warned the violations were unacceptable and would not be tolerated. OFC partially addressed these violations after a lapse of two years, but the Commissioner's order states that unlicensed activity is believed to continue in some jurisdictions.

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In December 2016 OFC and state regulators entered into a Memorandum of Understanding (MOU) which required OFC to retain an independent auditing firm to perform a comprehensive audit and reconciliation of all escrow accounts with a report submitted to and approved by the MMC by January 13, 2017.  On that date, the company informed the MMC that the $1.5 billion cost of that audit was beyond its financial capability and asked to sample 457 accounts out of the 2.5 million it had serviced over the initial audit period.  The company has also failed to provide a suitable going-forward business plan to address its financial condition.

The Cease and Desist Order requires OFC to immediately cease acquiring new mortgage servicing rights and acquiring or originating new residential mortgages until it provides a sufficient analysis of its financial condition and provides state regulators with a reconcilement of its escrow accounts showing that consumer funds are appropriately collected, accounted for, and distributed.  OFC has 20 days in which to request a hearing.

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iehi-feed-61994 Fri, 31 Mar 2017 19:55:42 GMT Puerto Rico Set To Get "Greece'd" - Brad Setser http://implode-explode.com/viewnews/2017-03-31_PuertoRicoSetToGetGreecedBradSetser.html 3) While creditors have complained that Puerto Rico isn't doing enough, I worry that there is still too much consolidation too fast: Puerto Rico's output is projected to fall by another 10 percentage points over the next five years, which would make Puerto Rico's ten year economic contraction as deep as that experienced by Greece.

Sadly, this is a realistic outcome if you combine five to six percentage points of consolidation, a multiplier of 1.5 (especially as much of the consolidation is offsetting a fall in federal funding) and negative trend growth. There is a real risk that the coming contraction generates further outmigration, undermining the basis for any eventual recovery. Puerto Ricans are not required to stay on on-island. A shrinking population ultimately means a shrinking tax base.

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Basically, Puerto Rico tried to avoid a draconian consolidation after its 2007 slump through running down pension assets (and for a while running up debt) and by taking advantage of Obama era policy changes--but now has run out of rope.

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iehi-feed-59923 Tue, 31 May 2016 17:26:53 GMT IMF Begins Distancing Itself From Neoliberalism http://implode-explode.com/viewnews/2016-05-31_IMFBeginsDistancingItselfFromNeoliberalism.html