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Back in the summer we wrote about an IMF report that flagged Deutsche Bank as the “most important net contributor to systemic risks” (see “‘Deutsche Bank Poses The Greatest Risk To The Global Financial System’: IMF“). Those who read our site frequently were likely not terribly surprised by the IMF’s conclusion.
Among the G-SIBs, Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse. In turn, Commerzbank, while an important player in Germany, does not appear to be a contributor to systemic risks globally. In general, Commerzbank tends to be the recipient of inward spillover from U.S. and European G-SIBs. The relative importance of Deutsche Bank underscores the importance of risk management, intense supervision of G-SIBs and the close monitoring of their cross-border exposures, as well as rapidly completing capacity to implement the new resolution regime.
That said, we suspect the latest ranking of global systemically important banks (G-SIBs) by the Financial Stability Board may be a bit more surprising to our readers, among others, as it features two of America’s largest banks right at the very top.
Four hundred animals who live at an animal sanctuary in New Smyrna Beach, Florida may face euthanasia now that Bank of America has seized ownership of the property.
Tina Richardson has lived and paid rent at the property with her husband for years, and in that time, she has accumulated a large collection of miniature ponies, dogs, cats, goats, wild hogs, donkeys, roosters, turkeys, pigeons, raccoons, and opossums.
“[I have] goats and chickens and ducks and 28 cats and seven dogs, and anything that wanders in here and finds a home. So it’s kind of hard to say what all I really have,” Richardson told local ABC affiliate, WFTV-9.
An earlier version of WFTV’s report said Fannie Mae, the notorious government-sponsored mortgage company, had taken ownership of the home. This reference can be verified through a version of the article aggregated by WIHO, a Florida news outlet. However, the reference to Fannie Mae was eventually removed from the original article. Anti-Media asked the WFTV journalist, Lauren Seabrook, to clarify, and she confirmed the county said Bank of America now owns the property the Richardsons are vacating.
The SEC announced on Thursday that Bank of America’s Merrill Lynch unit admitted wrongdoing and has agreed to pay $415 million to settle charges that it “misused customer cash to generate profits for the firm.”
According to the statement, Merrill violated the SEC’s Consumer Protection Rule by misusing customer cash that rightfully should have been deposited in a reserve account, freeing up billions to finance its own trading activities as a result.
Bank of America has announced that it will fire as many as 8,000 employees within its consumer division the FT reports.The core reason given for the headcount reduction in this instance is that digital banking is picking up the pace, and has reduced the need for “back office staff” and bank tellers.
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Did you know that there are 5 “too big to fail” banks in the United States that each have exposure to derivatives contracts that is in excess of 30 trillion dollars? Overall, the biggest U.S. banks collectively have more than 247 trillion dollars of exposure to derivatives contracts. That is an amount of money that is more than 13 times the size of the U.S. national debt, and it is a ticking time bomb that could set off financial Armageddon at any moment. Globally, the notional value of all outstanding derivatives contracts is a staggering 552.9 trillion dollars according to the Bank for International Settlements. The bankers assure us that these financial instruments are far less risky than they sound, and that they have spread the risk around enough so that there is no way they could bring the entire system down. But that is the thing about risk – you can try to spread it around as many ways as you can, but you can never eliminate it. And when this derivatives bubble finally implodes, there won’t be enough money on the entire planet to fix it.
For now, negative rates as a policy tool remain a “work in progress”, judging by the current inflation levels across Europe. But the rise in household savings rates amid so much central bank support is paradoxical to us, and mimics what we highlighted in the credit market earlier this year. Companies in Europe are deleveraging, not releveraging, and are buying back bonds not stock.
– Let The Kool Aid Flow: Bank Of America “Predicts” No Recession In The Next Decade (ZeroHedge, Aug 6, 2015):
One year ago, as part of its always entertaining long-run forecasting exercise, Bank of America predicted that GDP growth in 2015 and 2016 would be 3.3% and 3.4% respectively. Fast forward one year, when in its updated “long-run” forecast, Bank of America’s crack economist Ethan Harris admits he was off by “only” 30% in his prediction of next year’s GDP, and instead of 3.3%, he now “forecasts” 2015 GDP to be… 2.3%. But the punchline is this: “if history is our guide, at some point in the next decade the US will experience a recession, but predicting a recession far in advance is almost impossible. We plan to update this table on a regular basis.”
– Bank Of America Begins 66-Day Countdown Until The “Ghost Of 1937” Returns (ZeroHedge, June 16, 2015):
The last time the Fed tried to exit a period of massive balance sheet expansion coupled with ZIRP – back in 1937 – its strategy completely failed. The Fed tightening in H1’37 was followed in H2’37 by a severe recession and a 49% collapse in the Dow Jones. This is the ghost of 1937 and it is about to make a repeat appearance.
– Consumer Spending Tumbles: BofA Blames Snow, Oil; Claims Its Models Are Right, Reality Is Wrong (ZeroHedge, March 10, 2015):
Stick a fork in the now proven wrong theory that plunging gas prices would boost consumer spending. Why? Because 4 months after the full impact of tumbling gas price was said to become apparent, consumer spending is not only not picking up, it is in fact slowing down more, especially in those places where there was snow in the winter, and gasp, where oil price actually fell the most!
Ridiculous? No. This is what the latest Bank of America card data survey reveals. To wit:
– Western Banks Cut Off Liquidity To Russian Entities (ZeroHedge, Dec 16, 2014):
As Zero Hedge first reported today, shortly before noon one (and subsequently more) FX brokers advised clients that any existing Ruble positions would be forcibly closed out because “western banks have stopped pricing USDRUB“, over concerns of Russian capital controls. Ironically, it was this forced liquidation of mostly short RUB positions that pushed the RUB higher, which in turn had a briefly favorably impact on energy commodities and risk assets, as the market had by then perceived the Ruble selloff as excessive. Of course, since nothing had actually changed aside from a temporary market technical, the selloff promptly resumed into the close of trading once the market finally understood what we had explained hours previously.
And unfortunately for the bulls, various falling knife-catchers, and those who hope the Russian situation will stabilize imminently with or without capital controls, it appears things in Russia are about to get a whole lot worse because as the WSJ reports, the next driver of the Russian crisis is likely to come from within the banking system itself because “global banks are curtailing the flow of cash to Russian entities, a response to the ruble’s sharpest selloff since the 1998 financial crisis.”
Presenting Russia’s banks: now cut off from the outside world as the second cold war goes nuclear, at least when it comes to the financial system:
Take a ‘wild guess’ what his next incarnation will be! 🙂
– “What’s Up, You F—ing N—-r?” – What a Debt Collector Hired by Bank of America Said to a Customer (Liberty Blitzkrieg, Dec 13, 2014):
I can’t believe I missed this one. Although the following happened back in 2010, given how captured our entire society remains by the “too big to fail and jail” banks, it’s worth putting this in front of readers. Here’s the disturbing encounter. From ABC News:
Back in 2010, an ABC News investigation found that a Texas-based company Bank of America had contracted to make debt collection calls were using racist and obscene language to try to coax debts from customers.
“What’s up, you f—ing n—-r?” said one of the collection agents in a message to 32-year-old Allen Jones of Dallas, who at the time owed $81 on his Bank of America credit card.
“This is your f—ing wake up call, man,” the debt collector said in a message left at Jones’ home at 6:30 a.m. Then another call: “You little, lazy ass bitch, get your mother f—ing ass up and go pick some mother f—ing cotton fields, bitch.”
– For Bank Of America, Crime Is Now An Ordinary Course Of Business (ZeroHedge, Oct 16, 2014):
Between Q4 2011 and Q3 2014 Bank of America produced “Net Income” of $15.9 billion. However, the amount of added back “one-time, non-recurring” legal expenses is a stunning $28.9 billion: two of every three dollars, non-GAAP as they may be, comes from Bank of America engaging in criminal activity… and getting caught for it! So perhaps an even more relevant question than how long will the EPS “addback” bullshit continue, is how long will the regulators and enforcers allow Bank of America to exist as an organization for which two-thirds of its “ordinary course business” is, for lack of a better word, crime?
– Bank Of America Has A Message For Its European Depositors: “We May Charge You” (ZeroHedge, Sep 15, 2014):
Because Mario Draghi wasn’t joking about that whole NIRP thing. And yes, negative deposit rates mean just that.
As the letter says, don’t worry: Bank of America has an extensive team of “liquidity and investment management solutions” experts who will gladly advise you to rotate your money out of deposits and into financial stocks, preferably that of BAC itself.
– Bank of America agrees to $17bn fine over mortgage fraud – report (RT, Aug 20, 2014):
America’s second largest lender has reached a $17 billion settlement with US federal authorities over selling bad mortgages, according to sources close to the negotiations.
The bank will pay out $10 billion in cash and $7 billion for consumer relief – such as modified home loans and refinanced mortgages, AP reports, citing officials close to the negotiations. The final verdict is due on Thursday.
The fine will be the largest single compensation settlement, beating out JPMorgan Chase & Co’s $13 billion penalty paid in November 2013. Citigroup, another major US bank, had to pay $7 billion in July.
– The Price To Keep Bankers Out Of Jail: $110 Billion And Rising (ZeroHedge, Aug 14, 2014):
Six years after the greatest financial crisis in modern history, not a single prominent – and bailed out – banker (or frankly any for that matter) has gone to prison. Still, in the great squid pro non-jail quo, regulators and the DOJ have had to be appeased somehow. That “somehow”, as has been revealed over the past several years, is with quarter after quarter of massive legal charges, settlements, penalties and so on. Of course, since the banks wouldn’t exist in the first place if it wasn’t for a multi-trillion taxpayer bailout, they don’t mind because the math is quite simple: being converted into a government utility is better than being bankrupt anyday. Also, it is shareholder money, not an actual clawback (oh, the horror).