IEHI Feed: The Bank Implode-o-Meter http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60773 Thu, 29 Sep 2016 21:28:20 GMT Wells Fargo Troubles Mount With Penalty for Soldier Repos http://bankimplode.com/viewnews/2016-09-29_WellsFargoTroublesMountWithPenaltyforSoldierRepos.html Wells Fargo & Co., reeling from weeks of pummeling over fraudulent customer accounts, was sanctioned by the Justice Department over improperly repossessing cars owned by members of the military.

Federal authorities are punishing the San Francisco-based lender for as many as 413 alleged violations of the Servicemembers Civil Relief Act, according to a statement Thursday from the Justice Department, which said the bank agreed to pay more than $4 million to compensate borrowers involved in unlawful repossessions spread over seven years. The bank's regulator, the Office of the Comptroller of the Currency, also fined the company $20 million for a decade of transgressions, the agency said in a statement.

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iehi-feed-60772 Thu, 29 Sep 2016 19:58:55 GMT Deutsche Bank under pressure as hedge funds cut exposure http://bankimplode.com/viewnews/2016-09-29_DeutscheBankunderpressureashedgefundscutexposure.html Deutsche Bank came under mounting pressure this evening after it emerged that some hedge funds worried about its financial health had started to trim their exposure to the troubled lender, sparking fresh fears about its future.  

About 10 funds that use Deutsche's prime brokerage business -- a division that services hedge funds - are believed to have reduced their positions with the bank in recent days by shifting some of their derivatives holdings to different firms and withdrawing some cash.

See also Martin Armstrong's comments.

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iehi-feed-60771 Thu, 29 Sep 2016 18:42:20 GMT Bank Of England Governor Warns Of ZIRP/QE "In Perpetuity" http://bankimplode.com/viewnews/2016-09-29_BankOfEnglandGovernorWarnsOfZIRPQEInPerpetuity.html iehi-feed-60769 Thu, 29 Sep 2016 01:41:27 GMT Housing Bubble? Here's why I dumped my last US property http://bankimplode.com/viewnews/2016-09-28_HousingBubbleHereswhyIdumpedmylastUSproperty.html Hockey stick charts make me want to sell immediately. They're screaming indicators that we're entering another housing bubble. It's not just Dallas; home prices across the United States are at or near their all-time highs, eclipsing the previous peak set a decade ago.

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In fact, in the Dallas market, the ratio of home prices to income actually exceeds the level it was at during the previous housing boom. So, relative to income levels, home prices are becoming EXTREMELY expensive. This means that home prices are passing their all-time highs on both a relative AND absolute basis.

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iehi-feed-60768 Wed, 28 Sep 2016 23:42:02 GMT As Real Estate Market Turns, Donald Trump's Billions Lose Their "4-Handle" http://bankimplode.com/viewnews/2016-09-28_AsRealEstateMarketTurnsDonaldTrumpsBillionsLoseTheir4Handle.html iehi-feed-60767 Wed, 28 Sep 2016 20:12:03 GMT California Suspends `Business Relationships' With Wells Fargo http://bankimplode.com/viewnews/2016-09-28_CaliforniaSuspendsBusinessRelationshipsWithWellsFargo.html California, the nation's largest issuer of municipal bonds, is barring Wells Fargo & Co. from underwriting state debt and handling its banking transactions after the company admitted to opening potentially millions of bogus customer accounts.

The suspension, in effect immediately, will remain in place for 12 months, State Treasurer John Chiang said Wednesday. "Complete and permanent severance" between his office and the bank will occur if it doesn't change its practices, he said. The treasurer is also suspending his office's investment in Wells Fargo securities.

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iehi-feed-60766 Wed, 28 Sep 2016 20:07:04 GMT Stumpf Pay Surrender Buys Time But Lawmakers Say It's Not Enough http://bankimplode.com/viewnews/2016-09-28_StumpfPaySurrenderBuysTimeButLawmakersSayItsNotEnough.html "This is a good first effort by Wells Fargo to start to move this behind them," Paul Miller, a banking analyst at FBR Capital Markets & Co., said Wednesday in an interview on Bloomberg Television. "The question is -- and I do not have the answer -- is it enough?"

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"There are still dozens of unanswered questions," Senator Sherrod Brown of Ohio, the banking committee's top Democrat, said in a statement. "We still don't know how many customers were harmed and how long this fraud continued."

The news about executives forgoing pay and the board's review won't affect the House Financial Service Committee's investigation into Wells Fargo, said a spokesman for Chairman Jeb Hensarling, a Texas Republican.

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iehi-feed-60765 Wed, 28 Sep 2016 17:18:16 GMT Draghi rejects German criticism, calls on Berlin carry its weight http://bankimplode.com/viewnews/2016-09-28_DraghirejectsGermancriticismcallsonBerlincarryitsweight.html iehi-feed-60764 Wed, 28 Sep 2016 17:17:06 GMT Yellen Cornered by Lawmaker in Heated Exchange Over Fed Politics http://bankimplode.com/viewnews/2016-09-28_YellenCorneredbyLawmakerinHeatedExchangeOverFedPolitics.html Fed Governor Lael Brainard has donated to Clinton's campaign and is widely viewed as a potential Clinton pick for Treasury secretary. Yellen hesitated and then demurred when Representative Scott Garrett of New Jersey asked whether Brainard would have a conflict of interest if she were indeed in talks with Democratic nominee Hillary Clinton's campaign about a position. The election takes place Nov. 8.

"I would have to consult my counsel, I'm not aware that that's a conflict," Yellen said in testimony to the House Financial Services Committee in Washington, while rejecting Garrett's suggestion that the U.S. central bank has a political bias.

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The heated exchange came during a week when the Fed has been under fire for its politics: Republican Presidential nominee Donald Trump said that the Fed is keeping rates low to make President Barack Obama look good during a widely-viewed televised debate on Monday. Merited or not, the persistent questioning of the Fed's objectivity -- and Yellen's inability to deflect that skepticism -- could become a headache for the officially non-partisan and independent central bank.

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iehi-feed-60762 Wed, 28 Sep 2016 16:05:43 GMT German financial watchdog not working on emergency plan for Deutsche Bank http://bankimplode.com/viewnews/2016-09-28_GermanfinancialwatchdognotworkingonemergencyplanforDeutscheBank.html iehi-feed-60761 Wed, 28 Sep 2016 16:00:57 GMT Sharpening the Claws at Wells Fargo http://bankimplode.com/viewnews/2016-09-28_SharpeningtheClawsatWellsFargo.html iehi-feed-60760 Wed, 28 Sep 2016 15:29:20 GMT Main Street Sucker Punched on the Housing "Recovery" -- Fed Left No Way Out http://bankimplode.com/viewnews/2016-09-28_MainStreetSuckerPunchedontheHousingRecoveryFedLeftNoWayOut.html iehi-feed-60759 Wed, 28 Sep 2016 14:27:04 GMT Wells Fargo Tries To Evict Woman From House They Don't Own http://bankimplode.com/viewnews/2016-09-28_WellsFargoTriesToEvictWomanFromHouseTheyDontOwn.html iehi-feed-60758 Wed, 28 Sep 2016 01:55:54 GMT Wells Fargo Claws Back Millions From CEO And Division Head After Scandal http://bankimplode.com/viewnews/2016-09-27_WellsFargoClawsBackMillionsFromCEOAndDivisionHeadAfterScandal.html Wells Fargo & Co. Chairman and Chief Executive John Stumpf will forfeit $41 million for the bank's burgeoning sales scandal, marking one of the biggest rebukes to the head of a major U.S. financial institution.

The bank's board moved to rescind pay for Mr. Stumpf and former community- banking head Carrie Tolstedt ahead of a hearing of the House Financial Services Committee Thursday. Wells Fargo's board said Ms. Tolstedt, who oversaw retail banking during bad behavior there, will forfeit unvested equity awards valued at $19 million.

The board said she won't exercise "outstanding options" during an investigation into the bank's sales practices. Ms. Tolstedt has also left the bank, earlier than her planned Dec. 31 retirement.

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The bank said that the $41 million is from Mr. Stumpf's unvested equity awards. It also said that he would forgo salary during an independent investigation the board is leading and has recused himself from all matters related to that as well as independent directors' deliberations. Neither he nor Ms. Tolstedt will receive a bonus for 2016.

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The bank's lead independent director, Stephen Sanger, said in the board's statement that further action may be warranted. The board's independent directors "will take such other actions as they collectively deem appropriate, which may include further compensation actions before any additional equity awards vest or bonus decisions are made early next year, clawbacks of compensation already paid out, and other employment-related actions."

The results of that investigation, for instance, will determine what becomes of Ms. Tolstedt's roughly $35 million in unvested options, according to a person familiar with the matter.

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In 2013, Wells Fargo agreed to enhance its clawback policy in exchange for New York City pension funds dropping a related shareholder resolution proposed by the city comptroller's office. New York City pension funds own almost $500 million in Wells Fargo stock.

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iehi-feed-60757 Wed, 28 Sep 2016 01:30:40 GMT Roach: US and Japanese central bankers are in denial over the signs of an impending meltdown http://bankimplode.com/viewnews/2016-09-27_RoachUSandJapanesecentralbankersareindenialoverthesignsofanimpen.html iehi-feed-60756 Tue, 27 Sep 2016 23:55:14 GMT Bank of Japan Confesses: Even We Don't Trust the Bank of Japan http://bankimplode.com/viewnews/2016-09-27_BankofJapanConfessesEvenWeDontTrusttheBankofJapan.html ``If a central bank without credibility makes a credible promise to run a non-credible policy, do the double negatives cancel out and create credibility?

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But the question is a serious one. The BOJ has just admitted, in effect, that it has a credibility problem, even as it sets about trying to promise that it will deliberately act to damage its credibility. Its admission, couched in layers of economic jargon, underscores the worries at many other central banks that years of low inflation could become self-perpetuating.

... Put simply, long-run inflation expectations depend in large part on where inflation has been, not on the 2% target the BOJ sets for it to be in future.

... "The Bank has attempted to make expectations formation more forward-looking by pursuing QQE [quantitative and qualitative easing] with the aim of anchoring inflation expectations at the price stability target of 2%," the BOJ said last week. "However, in the course of this attempt, the observed inflation rate declined due to a variety of factors such as the substantial fall in crude oil prices, and inflation expectations--reflecting their adaptive manner--followed suit."

Translated from central bank-speak, "it wasn't our fault, but we failed."

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The BOJ has also taken on an idea from Paul Krugman, a past winner of the Nobel memorial prize in economics: It wants to be credibly irresponsible. It promised on Wednesday to keep printing money until it overshoots the inflation target and stays above, in an effort to make people believe it is willing to run a looser policy in the long run than it really should. If they believed that, inflation expectations should rise faster, and inflation follow suit.

The problem is that if the target isn't believed in the first place, who is likely to believe the BOJ will go even further?

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iehi-feed-60755 Tue, 27 Sep 2016 23:53:32 GMT WTO Slashes Global Trade Forecast by 39% Since April: "Wake-Up Call" Says WTO Director http://bankimplode.com/viewnews/2016-09-27_WTOSlashesGlobalTradeForecastby39SinceAprilWakeUpCallSaysWTODire.html The new figure of 1.7 percent, down from the WTO's previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.

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"We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system," the report quoted him as saying.

The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors.

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iehi-feed-60754 Tue, 27 Sep 2016 23:41:15 GMT Phantasmagoria http://bankimplode.com/viewnews/2016-09-27_Phantasmagoria.html iehi-feed-60753 Tue, 27 Sep 2016 23:10:28 GMT Don't ignore tsunami from South China Sea http://bankimplode.com/viewnews/2016-09-27_DontignoretsunamifromSouthChinaSea.html iehi-feed-60752 Tue, 27 Sep 2016 19:51:59 GMT US Probing Possible Worker Abuse By Wells Fargo http://bankimplode.com/viewnews/2016-09-27_USProbingPossibleWorkerAbuseByWellsFargo.html The U.S. Labor Department is investigating possible abuses of employees by Wells Fargo in connection with the bank's alleged efforts to open millions of unauthorized accounts to meet sales goals.

A group of Democratic senators last week asked the department to investigate whether Wells Fargo tellers, branch managers and customer service reps were harassed and threatened with termination in the aggressive sales push. A complete review of cases and complaints is needed to determine if the second-largest U.S. bank violated the Fair Labor Standards Act, the senators said. About 5,300 employees have been fired since 2011.

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