BF2S Forums Treasury statement confuzzels me

That threshold of holdings referred to by "amounts required to be considered well capitalized" is an FDIC threshold.  If a bank falls below it, then it is subject to takeover by the FDIC.

My opinion on the overall financial situation with banks is that (a) they currently have sufficient cash on-hand, but (b) the projected loan defaults to Americans who should have never gotten a loan in the first place EXCEEDS the amount of (a).

Thus, bail-out.

Then why is Skank of America being called a zombie bank?

Agent_Dung_Bomb wrote:

ATG wrote:

Then why is Skank of America being called a zombie bank?

My guess is that even if they are well capitalized they are not loaning money as would be expected.

So the government should take it over and 'refinance' things?  Sorry, saw Carter's affordable housing bite us -And that was when there was a just one hand involved.  How bad will it get when the government can get its full choke on?

They are "well capitalized" because the toxic debt that is owed to them shows on their books as being an asset or capital. What the nimrods did was to use mark to market and marked the prices on the toxic debt assets when the "assets were at the height of the market. That showed huge profits and they all gave each other pats on the back and took huge bonuses.

Now the market has tanked and they are afraid  to write off those assets because when you account for the losses and the fact that the assets are leveraged, these banks are upside down on the investments and are now completely insolvent.

Everyone knows they are dead, but no one is willing say it and pull the plug.
Watch AIG is in the same boat

The govt is eventually going to wade all the way into this mess and pay off on the bad debts and credit default swaps etc and put us all in the poor house.

What the govt should be doing is pushing these banks and AIG over the edge as fast as possible. Euthenize them now and let the rest of us get on with life.

But I want to refi in a couple months or so.  You think the rates will stay low, and are they the same way with residential loans as well.

Values seems to be ok around here still, hope they don't tank soon.  I've put a lot of sweat equity into this place, it better appraise well enough.

CC-Marley wrote:

Agent_Dung_Bomb wrote:

ATG wrote:

Then why is Skank of America being called a zombie bank?

My guess is that even if they are well capitalized they are not loaning money as would be expected.

They raised my APR from 10.49 to 20.99 for no reason.

Miss a payment on another card?

Kmarion wrote:

ATG wrote:

Skank of America

Zing!

I talked to a few bankers today to get some commercial rates. They said that they are all nervous and are refusing to lend without a balloon.
Those dirty bastards are scared they'll get stuck holding notes at reasonable rates (say around 7%).. you can forget about anything less than 20% down too.

There is a chance that we'll be hitting some pretty high inflation soon.  I'm assuming that they are protecting against this.  It is looking more and more like the 1970's is returning.

OrangeHound wrote:

CC-Marley wrote:

Agent_Dung_Bomb wrote:

My guess is that even if they are well capitalized they are not loaning money as would be expected.

They raised my APR from 10.49 to 20.99 for no reason.

Miss a payment on another card?

Kmarion wrote:

ATG wrote:

Skank of America

Zing!

I talked to a few bankers today to get some commercial rates. They said that they are all nervous and are refusing to lend without a balloon.
Those dirty bastards are scared they'll get stuck holding notes at reasonable rates (say around 7%).. you can forget about anything less than 20% down too.

There is a chance that we'll be hitting some pretty high inflation soon.  I'm assuming that they are protecting against this.  It is looking more and more like the 1970's is returning.

No I did not. Credit   Score is 734.

ATG wrote:

''Currently, the major U.S. banking institutions have capital in excess of the amounts required to be considered well capitalized.This program is designed to ensure that these major banking institutions have sufficient capital to perform their critical role in our financial system on an ongoing basis and can support economic recovery, even under an economic environment that is more challenging than is currently anticipated.

So...if the banks have excess capital why are they being referred to as zombies and taken over by the new administration?


http://www.cnbc.com/id/29347482/site/14081545/for/cnbc/

They aren't. You know, for starters.

I think they are hesitant to lend in this environment, even though they (on paper, at least) have the appropriate amount of capitalization to do so. Unfortunately, the only thing that will make them money is lending...which is also exactly what is needed to stop and reverse the economic contraction we're facing.

So...either they are letting emotion rule their judgment...or they aren't as solid as their ledgers would lead one to believe.