Things are not so good at the Banks

[monsoon]

......

Back to the point at hand, there is a lot of blame to go around for the current housing mess, and certainly some of it sits with the banks and lending institutions. I guess everyone thought that housing would keep going up, despite the fact that it had been overvalued for more than a decade......

[Raintree21]

It's why I keep saying go to the credit unions if you can but if not at least try to find a small community based bank. There are a number of them in the Charlotte area.

[monsoon]

.... I think your beef should be with Gramm Leach Bliley - the late-1990s legislation signed into law by President Clinton that permitted banks, thrifts, securities broker/dealers and insurance companies to all have common ownership. .....

[Commoner]

LOL nice try. The sponsors of bill, Phil Gramm & James Leach, are GOP supply siders of the worst sort. Phil Gramm, until recently on McCain's campaign staff, has demonstrated time and time again that he is clueless on what matters with the economy. (at least in terms of the average person) I might be wrong but I don't believe Clinton had the political capital to veto this bill. In the Bush years once the effects of this bill came into full effect and the lack of oversight, and the endless printing of worthless paper by the Fed to hold down interest rates has all led to the mess we have now.

This economy is not going to be fixed until controls are slapped back on the banks, interest rates are allowed to rise significantly, and the government is forced to stop deficit spending. Its easy enough to know which political party "won't" do this, but this is what has to happen .

[GRDadof3]

I don't mean to hijack the thread, but yes, I do think the average American reads at a higher level than a 10th grader. Just because most publications are written that way doesn't mean that people's reading comprehension can't handle something higher.

This post makes an interesting point about what people are willing to read in terms of grade level: http://lighthouse-writing-tips.blogspot.co...n-audience.html

Back to the point at hand, there is a lot of blame to go around for the current housing mess, and certainly some of it sits with the banks and lending institutions. I guess everyone thought that housing would keep going up, despite the fact that it had been overvalued for more than a decade.

On the flip side, the market tends to correct itself. As prices continue to fall, more people will buy homes helping to offset the current problem.

Assuming there's anyone left to give them a loan, of course.

[Raintree21]

So back to the topic at hand which is how the bankis are doing and their future here in Charlotte...

Just talked to a friend of mine who says he starts on Monday with BOA downtown. He said one of his first questions was, am I going to have a job in 6 months if I come to work for you. The response was they consider themselves pretty much stable and may do a little bit more restructuring but are otherwise done with their job cuts.

[monsoon]

Jim Cramer, a financial talking head for MSNBC, after patting himself on the back a few times said the FDIC was in a panic and will wave the 10% rule for banks and as a result only 4 banks would remain. The 4 would be:

• Bank of America

• Wells Fargo

• US Bank Corp.

• JP Morgan

Sorry Wachovia. However take this as an opinion from a cable news talking head as in almost the next breath he posthumously referred to Jimmy Carter, the 39th President. "may he rest in peace" They had to correct him on air that Jimmy Carter is still alive. LOL.

[Commoner]

Jim Cramer, a financial talking head for MSNBC, after patting himself on the back a few times said the FDIC was in a panic and will wave the 10% rule for banks and as a result only 4 banks would remain. The 4 would be:

• Bank of America

• Wells Fargo

• US Bank Corp.

• JP Morgan

Sorry Wachovia. However take this as an opinion from a cable news talking head as in almost the next breath he posthumously referred to Jimmy Carter, the 39th President. "may he rest in peace" They had to correct him on air that Jimmy Carter is still alive. LOL.

[rockhilljames]

Sorry, but that woman at that blog you linked to is wrong. She's only giving her opinion in the matter, and she writes tennis journals. I'm going to go out on a limb and say that most tennis players do not fit the "average American" demographic. Did you miss the link I provided regarding the Dept. of Education's assessment of American reading levels? First of all, there are tens of millions of Americans who can't even read English, period. 50% of American adults can't even read a book written at the 8th grade level* They are either considered "illiterate", or don't speak English as their primary language. Secondly, I personally have written and submitted articles for corporate newsletters, online publications and the like. Consistently I am told that my writing is too complex for the average reader (even in an insurance/financial services company environment), and my first drafts are sent back to me to be "dumbed down" to about the 10th grade level.

*http://education-portal.com/articles/Illiteracy:_The_Downfall_of_American_Society.html

I'm really surprised that such an astute group of members here doesn't know that this is common knowledge in the communications world.

Back to the topic at hand, most mortgage documents, purchase agreements and building contracts are written by corporate attorneys, in "legal-ese". It takes an attorney to decipher most of the stipulations and their ramifications to the buyer. Couple that with the average reading level of about 8th or 9th grade on the buyers' side of the table, and it's a situation that is just ripe for abuse. I know a lot of people here tend to lean toward Ayn Rand type Libertarian philosophy, but the more we move in that direction, the more trouble this country gets in. The housing industry needs more oversight, post haste, starting with the lenders.

[GRDadof3]

My first reply to this got deleted so let me try again.

I disagree. My own experiences writing for public consumption makes me qualified to have an informed opinion on this subject, I disagree with the studies you site and the methodologies they use and feel that the "dumbing down" of writing in this country being performed by USA Today and Newsweek are hurting rather than helping.

I also feel that it is the responsibility of the applicant to understand the loan that he or she is applying for. If they don't understand the terms they should ask, simple as that.

I also agree that Cramer is more interested in ratings and his sound effects than sound financial advice.

[atlrvr]

Please let's not contine the conversation about average reading levels....everyone can agree to disagree

[wheatie]

If Sarbanes-Oxley was the answer to the Enron type reporting scandals, why has there been no proposals to rein in the housing industry? Especially since the damage being done to the American economy right now far blows away any damage that Enron and a host of other companies inflicted. Should the Enron investors have just exercised a little more "personal responsibility", or just asked more questions? I already know the answer. Because our current congress is incompetent.

[monsoon]

The State of Connecticut filed a lawsuit against Bank of America today due to the lending practices of their subsidiary. A copy of the summons has been placed on the state website and you can can view it here. Of interest is defendant #1 named in the lawsuit. Countrywide Financial Corporation, Bank of America Corporate Center, 100 North Tryon, Charlotte, North Carolina, 28255.

The summons makes for an interesting read and answers the questions raised above on what exactly did Countrywide do that was so bad. At least this is is the State of Connecticut's version of what they did. By my count, BofA is now having to contend with lawsuits filed the attorney generals of 3 different states due to the actions of Countrywide.

BTW, The local news seems to have completely missed this one, but you can find plenty of articles if you just search news.google.com.

[Commoner]

The State of Connecticut filed a lawsuit against Bank of America today due to the lending practices of their subsidiary. A copy of the summons has been placed on the state website and you can can view it here. Of interest is defendant #1 named in the lawsuit. Countrywide Financial Corporation, Bank of America Corporate Center, 100 North Tryon, Charlotte, North Carolina, 28255.

The summons makes for an interesting read and answers the questions raised above on what exactly did Countrywide do that was so bad. At least this is is the State of Connecticut's version of what they did. By my count, BofA is now having to contend with lawsuits filed the attorney generals of 3 different states due to the actions of Countrywide.

BTW, The local news seems to have completely missed this one, but you can find plenty of articles if you just search news.google.com.

[monsoon]

Wachovia again revised its 2nd quarter earnings (losses) report to show an even larger loss than what was reported last month. In a somewhat related move they also increased the number of layoffs they announced last month by another 600+ jobs.

[Commoner]

Wachovia again revised its 2nd quarter earnings (losses) report to show an even larger loss than what was reported last month. In a somewhat related move they also increased the number of layoffs they announced last month by another 600+ jobs.

[monsoon]

West Virgina becomes the 5th state to sue Bank of America's subsidiary Countrywide. The state attorney general Darrel McGraw Jr. accuses the bank of making loans to West Virginia consumers on terms that were unaffordable and unconscionable. BofA's stock price is now taking a hit due to the amount of litigation that it has brought onto itself by it's association with Countrywide. There is a notice placed on the state's website here.

Meanwhile adding insult to injury, earlier this week a business owner got quite a surprise when making a withdrawal from a Virgina BofA branch to pay her employees. The surprise was an exploding dye pack meant for criminals that exploded in the poor woman's car temporarily blinding her and coating the inside of her car with red dye. The woman had to get the local NBC affiliate involved who contacted the corporate offices in Charlotte before she was offered restitution for all the damage including a trip to the hospital. This according to their website.

[Charlotte_native]

Meanwhile adding insult to injury, earlier this week a business owner got quite a surprise when making a withdrawal from a Virgina BofA branch to pay her employees. The surprise was an exploding dye pack meant for criminals that exploded in the poor woman's car temporarily blinding her and coating the inside of her car with red dye. The woman had to get the local NBC affiliate involved who contacted the corporate offices in Charlotte before she was offered restitution for all the damage including a trip to the hospital. This according to their website.

[monsoon]

The former head of the IMF, Kenneth Rogoff, said yesterday that one of the big banks in the USA will fail over the next few months and said the worst part of the financial crisis, is yet to come.

“The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say the worst is to come,” ..... “We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one — one of the big investment banks or big banks,”

I would say the "whoppers" in the USA are:

• Citicorp

• BofA

• JPM/Chase

• Wachovia

Are there any other contenders for this list?

[atlrvr]

Wells Fargo

Goldman Sachs

Merrill Lynch (arguably the closest to failing)

Morgan Stanley

[Commoner]

The former head of the IMF, Kenneth Rogoff, said yesterday that one of the big banks in the USA will fail over the next few months and said the worst part of the financial crisis, is yet to come.

[monsoon]

It looks as if on top of the 5 state lawsuits Bank of America is now going to have to defend the first class action lawsuit brought against its subsidiary Countrywide. It accuses the lender of deceptive and unfair practices that were ruinous to their customers. No telling how large this one might get as they are applying for class action status to cover all people who did business with them in Washington State. You can read the complaint here.

[jednc]

Meanwhile adding insult to injury, earlier this week a business owner got quite a surprise when making a withdrawal from a Virgina BofA branch to pay her employees. The surprise was an exploding dye pack meant for criminals that exploded in the poor woman's car temporarily blinding her and coating the inside of her car with red dye. The woman had to get the local NBC affiliate involved who contacted the corporate offices in Charlotte before she was offered restitution for all the damage including a trip to the hospital. This according to their website.

[monsoon]

Bank of America and Wachovia get a huge reprieve from the mess they and their subsidiaries created over the past 5-6 years with taking risky gambles in the mortgage and real estate market. The US Government has decided to take over Fannie Mae and Freddie Mac which is where the majority of these bad loans have been dumped and now it's going to be the US Taxpayer that will absorb all the losses these corporations helped to create. So essentially the US government ends up borrowing another $300B to bail out the major banking corporations in the USA. Not surprising the head of BofA, Ken Lewis has already lauded this form of corporate welfare.

Anyone that would suggest the biggest players in the United States operate in the "free market" only needs to look at this example to see it isn't so.

[Commoner]

BofA kicking the tires on Lehman Brothers today. Net effect wouldn't be huge for Charlotte if something happens, but noteworthy nonetheless. BofA takes a lot of heat on this board (well, a lot of heat is directed at them but nobody knows if they're aware of it) but their rescue of Countrywide has been applauded by analysts and policy makers. This would make the Countrywide rescue look insignificant in comparison. Lots of good will to be earned amont potential clients and counterparties here.