Victory 1 Project

Creative Online Resources

Banks and Banking

Yes about 50 more banks shut down and when people ask why the large banks seem to swallow up the smaller banks, I finally found a great explanation.

This video is about 28 minutes and if you watch the complete video, you will understand what the American banks are doing with your money.

One other note: I want to thank The Property Patrol for supporting our efforts. Please visit their website here.

Enjoy this video:


May 11, 2011 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment

Bank Failure FAQs

Detective Krum

We have received questions about the Federal Deposit Insurance Corporation (FDIC) and deposits.  The FAQ section below is from FDIC. The question not asked in the FDIC FAQ section is what if FDIC goes bankrupt which reports suggest FDIC is already bankrupt.

FDIC Deposit fund had negative $8.2B balance in Q3 . The Treasury has their back. But let’s not forget – The FDIC does not have a legal “full faith and credit” guarantee from the US Federal Government and Treasury.

It has a “sense of Congress” resolution, but not a formal, legally-binding guarantee.

Credit Unions have a similar Insurance program. Keep in mind, the deposit money in banks does not belong to the banks, it is your money.  Banks use your money to leverage their investments. If they make poor investment decisions, it can cost you.

FDIC deposits over the $ 250,000 mark are lost. If your company, business or you personally deposit more than $ 250,000 in one bank in one account, you are always at risk of loosing anything over the $ 250,000.

FDIC Frequently Asked Questions

What is a bank failure?
A bank failure is the closing of a bank by a federal or state banking regulatory agency. Generally, a bank is closed when it is unable to meet its obligations to depositors and others. This deals with the failure of “insured banks.” The term “insured bank” means a bank insured by FDIC, including banks chartered by the federal government as well as most banks chartered by the state governments. An insured bank must display an official FDIC sign at each teller window.

What is FDIC’s role in a bank failure?
In the event of a bank failure, the FDIC acts in two capacities. First, as the insurer of the bank’s deposits, the FDIC pays insurance to the depositors up to the insurance limit. Second, the FDIC, as the “Receiver” of the failed bank, assumes the task of selling/collecting the assets of the failed bank and settling its debts, including claims for deposits in excess of the insured limit. (Another words, FDIC takes your money over $250,000 and sells your money to the highest bidder and FDIC takes it “cut” from the sale.  One other point assets can and do many times include real estate. If your home is worth more than the insured limit, you could be forced to pay the difference of a failed bank’s mortgage asset.)

What is the purpose of FDIC deposit insurance?
The FDIC protects depositors’ funds in the unlikely event of the financial failure of their bank or savings institution. FDIC deposit insurance covers the balance of each depositor’s account, dollar-for-dollar, up to the insurance limit, including principal and any accrued interest through the date of the insured bank’s closing.

What is the FDIC insurance amount?
The standard insurance amount is $250,000 per depositor, per insured bank, for each ownership category. This includes principal and accrued interest and applies to all depositors of an insured bank.

Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank.

Deposits maintained in different categories of legal ownership at the same bank can be separately insured. (Krum’s Note: Notice the keyword here is different. That means more than one account in a variety of names)

Therefore, it is possible to have deposits of more than $250,000 at one insured bank and still be fully insured.

Who does the FDIC insure?
Any person or entity can have FDIC insurance on a deposit. A depositor does not have to be a citizen, or even a resident of the United States. FDIC insurance only protects depositors, although some depositors may also be creditors or shareholders of an insured bank.

What does FDIC deposit insurance cover?
FDIC insurance covers deposits received at an insured bank. Types of deposit products include checking, NOW, and savings accounts, money market deposit accounts (MMDA), and time deposits such as certificates of deposit (CDs).

What is the source of funding used by the FDIC to pay insured depositors of a failed bank? The FDIC’s deposit insurance fund consists of premiums already paid by insured banks and interest earnings on its investment portfolio of U.S. Treasury securities. No federal or state tax revenues are involved. (Krum’s Note: Look at Foreign Investment in the US and the portfolio here. Then check out  this pdf file showing what China holds in America here .)

How am I notified when my bank has been closed?
The FDIC notifies each depositor in writing using the depositor’s address on record with the bank. This notification is mailed immediately after the bank closes.

When the failed bank is acquired by another bank; the assuming bank also notifies the depositors. This notification usually is mailed with the first bank statement after the assumption.

Every effort also is made to inform the public through the news media, town meetings, and notices posted at the bank.

August 27, 2010 Posted by | 1, Victory 1 News | , , , , | Leave a comment

Connecting Dots To The Economic Collapse

Detective Krum

Standard & Poor’s has given warning that nearly all of the world’s big banks lack sufficient capital to cover trading and investment exposure risking further downgrades over the next 18 months unless they move swiftly to beef up their defenses.

While some banks may look healthy under normal Tier 1 and leverage targets, critics claim these measures can be highly misleading since they fail to discrimiate between high-risk and low-risk uses of leverage. The system failed to pick up the danger signals before the financial crisis. The supposedly moderate leverage of US banks in 2007 proved to be a spectacularly useless indicator.

Every single bank in Japan, the US, Germany, Spain, and Italy included in S&P’s list of 45 global lenders fails the 8pc safety level under the agency’s risk-adjusted capital (RAC) ratio. Most fall woefully short.

The most vulnerable are Mizuho Financia (2.0), Citigroup (2.1), UBS (2.2), Sumitomo Mitsui (3.5), Mitsubishi (4.9), Allied Irish (5.0), DZ Deutsche Zentral (5.3), Danske Bank (5.4), BBVA (5.4), Bank of Ireland (6.2), Bank of America (5.8), Deutsche Bank (6.1), Caja de Ahorros Barcelona (6.2),
and UniCredit (6.3).Read more here.

Barney Frank is again trying to interfere with free market principles with H.R. 4173 The Wall Street Reform and ‘Consumer Protection’ Act of 2009 see it here.  Remember, it was the end of 2008 when Congress was threatened with Martial Law (according to some Congressmen) if they did not approve the bank bailout. Even John McCain came running back from his presidential campaign to sign on to the bank bailouts. It appear the premise has been to establish a one world money system as reported in the Financial Times in 2008 where it was reported, “Even if the US’s massive financial rescue operation succeeds, it should be followed by something even more far-reaching –
the establishment of a Global Monetary Authority to oversee markets that have become border-less.” See the rest of the article here.

So let’s connect some dots. Bruce Wiseman, (Canada Free Press) wrote a brilliant article explaining the financial ransom in an article here. I printed it below.
The 1987 ascendancy of Rockefeller/Rothschild homeboy Alan Greenspan from the Board of Directors of J.P. Morgan to the throne of Chairman of the Federal Reserve Bank (a position he was to hold for twenty years). From the beginning of his term, Greenspan was a strong advocate for deregulating the financial services industry: letting the cowboys of Wall Street sow their wild financial oats, so to speak.


Greenspan had been the Fed Chairman for seven years when, in 1994, a bill called the Community Reinvestment Act (CRA) was rewritten by Congress. The new version had the purpose of providing loans to help deserving minorities afford homes. Nice thought, but the new legislation opened the door to loans that set aside certain lending criteria: little things like a down payment, enough income to service the mortgage and a good credit record.

With CRA’s face lift, we have in place two of the five elements of the perfect financial storm: Alan
(Easy Money) Greenspan at the helm of the Fed and a piece of legislation that turned mortgage lenders into a division of the Salvation Army.

Perhaps you can see the pot beginning to boil here. But the real fuel to the fire was yet to come.


To understand the third element of the storm, we travel back in time to
the Great Depression and the 1933 passage of a federal law called the
Glass-Steagall Act. As excess speculation by bans was one of the key
factors of the banking collapse of 1929, this law forbade commercial
banks from underwriting (promoting and selling) stocks and bonds.

That activity was left to the purview of “Investment Banks” (names of
major investment banks you might recognize include Goldman Sachs,
Morgan Stanley and the recently deceased Lehman Brothers).

Commercial banks could take deposits and make loans to people.

Investment banks underwrite (facilitated the issuing of) stocks and bonds.

To repeat, this law was put in place to prevent the banking speculation that caused the Great Depression. Among other regulations, Glass-Steagall kept commercial banks out of the securities. Greenspan’s role in our not-so-little drama is made clear in one of his first speeches before Congress in 1987 in which he calls for the repeal of the Glass-Steagall Act. In other words, he’s trying to get rid of the legislation that kept a lid on banks speculating in financial markets with securities.

He continued to push for the repeal until 1999 when New York banks successfully lobbied Congress to repeal the Glass-Steagall Act.   Easy-Money Alan hailed the repeal as a revolution in finance.

Yeah, Baby!

A revolution was coming.

With Glass-Steagall gone, and the permissible mergers of commercial banks with investment banks, there was nothing to prevent these combined financial institutions from packaging up the sub-prime CRA mortgages with normal prime loans and selling them off as mortgage-backed securities through a different arm of the same financial institution. No external due diligence required.

You now have three of the five Horsemen of the Fiscal Apocalypse: Greenspan, CRA mortgages and repeal of Glass-Steagall.


Enter Hammering Hank Paulson.

In April of 2004, a group of five investment banks met with the regulators at the Securities and Exchange Commission (SEC) and convinced them to waive a rule that required the banks to maintain a certain level of reserves. This freed up an enormous reservoir of capital, which the investment
banks were able to use to purchase oceans of Mortgage-Backed Securities (cleverly spiked with the sub-prime CRA loans like a martini in a Bond movie). The banks kept some of these packages for their own portfolios but also sold them by the bucket-load to willing buyers from every corner of the globe.

The investment bank that took the lead in getting the SEC to waive the regulation was Goldman Sachs. The person responsible for securing the waiver was Goldman’s Chairman, a man named Henry Paulson.

With the reserve rule now removed, Paulson became Wall Street’s most aggressive player, leveraging the relaxed regulatory environment into a sales and marketing  jihad of mortgage-backed securities and similar instruments.

Goldman made billions. And Hammering Hank? According to Forbes magazine, his partnership interest in Goldman in 2006 was worth $632 million. This on top of his $15 million per year in annual compensation. Despite his glistening dome, let’s say Hank was having a good hair day.

In case this isn’t clear, it was Paulson who, more than anyone else on Wall Street, was responsible for the boom in selling the toxic mortgage-backed securities to anyone who could write a check.

Many of you may recognize the name Hank Paulson. It was Paulson who left the Goldman Sachs’ chairmanship and came to Washington in mid-2006 as George Bush’s Secretary of the Treasury.

And it was Paulson who bludgeoned Congress out of $700 billion of so-called stimulus money with threats of public riots and financial Armageddon if they did not cough up the dough. He then used $300 billion to “bail out” hi Wall Street homeboys to whom he had sold the toxic paper in the first place. All at taxpayer expense.

Makes you feel warm all over, doesn’t it?

Congress has its own responsibility for this fiscal madness, but that’s another story.

This one still has one more piece—the pièce de résistance.


Greenspan, the Community Reinvestment Act, the repeal of Glass-Steagall, and Paulson getting the SEC to waive the capital rule for investment banks have all set the stage: the economy is screaming along, real estate is in a decade-long boom and the stock market is reaching new highs. Paychecks are fat.

But by the first quarter of 2007, the first nigglings that all was not well in the land of the mortgage-backed securities began to filter into the press. And like a chilled whisper rustling through the forest,
mentions of rising delinquencies and foreclosures began to be heard.

Still, the stock market continued to rise, with the Dow Jones reaching a high of 14,164 on October 9, 2007. It stayed in the 13,000 range through the month, but in November, a major stock market crash
commenced from which we have yet to recover. It’s not just the U.S. stock market that has crashed, however. Stock exchanges around the world have fallen like a rock off a tall building. Most have lost half their value, wiping out countless trillions.

If it were just stock markets, that would be bad enough; but, let’s be frank, the entire financial structure of the planet has gone into a tailspin and it has yet to hit ground zero.

While there surely would have been losses, truth be told, the U.S. banking system would likely have gotten through this, as would have the rest of the world, had it not been for an accounting rule called Basel II promulgated by the Bank for International Settlements.

Who? What?

That’s right, I said an accounting rule.

The final nail in the coffin—and this was really the wooden spike through the heart of the financial markets—was delivered in Basel, Switzerland, at the Bank for International Settlements (BIS).
Never heard of it? Neither have most people; so, let me pull back the wizard’s curtain.

Central banks are privately owned financial institutions that govern a country’s monetary policy and create the country’s money.

The Bank for International Settlements (BIS), located in Basel, Switzerland, is the central banker’s bank. There are 55 central banks around the planet that are members, but the bank is controlled by a board of directors, which is comprised of the elite central bankers of 11 different countries (U.S., UK, Belgium, Canada, France, Germany, Italy, Japan, Switzerland, the Netherlands and Sweden).

Created in 1930, the BIS is owned by its member central banks, which, again, are private entities. The buildings and surroundings that are used for the purpose of the bank are inviolable. No agent of the Swiss public authorities may enter the premises without the express consent of the bank. The bank exercises supervision and police power over its premises. The bank enjoys immunity from criminal and administrative jurisdiction.

In short, they are above the law.

This is the ultra-secret world of the planet’s central bankers and the to of the food chain in international finance. The board members fly into Switzerland for once-a-month meetings, which they hold in secret.

In 1988 the BIS issued a set of recommendations on how much capital commercial banks should have. This standard, referred to as Basel I, was adopted worldwide.

In January of 2004 our boys got together again and issued new rules about the capitalization of banks (for those that are not fluent in bank-speak, this is essentially what the bank has in reserves to protect itself and its depositors).

This was called Basel II.

Within Basel II was an accounting rule that required banks to adjust the value of their marketable securities (such as mortgage-backed securities) to the “market price” of the security. This is called mark to the market. There can be some rationality to this in certain circumstances, but here’s what happened.


As news and rumors began to circulate about some of the sub-prime CRA
loans in the packages of mortgage-backed securities, the press, always
at the ready to forward the most salacious and destructive information
available, started promoting these problems.

As a result, the value of these securities fell. And when one
particular bank did seek to sell some of these securities, they got
bargain basement prices.

Instantly, per Basel II, that meant that the hundreds of billions of
dollars of these securities being held by banks around the world had to
be marked down—marked to the market.

It didn’t matter that the vast majority of the loans (90% +) in these
portfolios were paying on time. If, say, Lehman Brothers had gotten
fire-sale prices for their mortgage-backed securities, the other banks,
which held these assets on their books, now had to mark to the market,
driving their financial statements into the toilet.

Again, it didn’t matter that the banks were receiving payments (cash
flow) from their loan portfolios; the value of the package of loans had
to be written down.

A rough example would be if the houses on your street were
all worth about $400,000. You owe $300,000 on your place and so have $100,000 in
equity. Your neighbor, Bill, in selling his house, uncovered a massive
invasion of termites. He had to sell the house in a hurry and wound up
with $200,000, half the real value.

Shortly thereafter, you get a demand letter from your bank for $100,000
because your house is only worth $200,000 according to “the market.”
Your house doesn’t have termites, or perhaps just a few. Doesn’t matter.

Of course, if the value of your home goes below the loan value, banks can’t make you cough up the difference.

But if you are a bank, Basel II says you must adjust the value of your
mortgage-backed securities if another bank sold for less—termites or no.

When the value of their assets were marked down, it dramatically
reduced their capital (reserves), and this—their capital—determined the
amount of loans they could make.

The result? Banks couldn’t lend. The credit markets froze.

Someone recently said that credit was the life blood of the economy.

This happens to be a lie. Hard work, production, and the creation of
products that are needed and wanted by others—these are the true life
blood of an economy.

But, let’s be honest, credit does drive much of the current U.S.
economy: home mortgages, auto loans and Visas in more flavors than a
Baskin-Robbins store.

That is, until the banks had to mark to the market and turn the IV off.


Mortgage lending slammed to a halt as if it had run headlong into a
cement wall, credit lines were canceled and credit card limits were
reduced and in some cases eliminated altogether. In short, with their
balance sheets butchered by Basel II, banks were themselves going under
and those that weren’t simply stopped lending. The results were like
something from a financial horror film—if there were such a thing.

Prof. Peter Spencer, one of Britain’s leading economists, makes it very
clear that the Basel II regulations “…are at the root cause of the
crunch…” and that “…if the authorities retain the strict Basel
regulations, the full scale of the eventual credit crunch and economic
slump could be disastrous.”

“The consequences for the macro-economy,” he says “of not relaxing [the Basel regulations] are unthinkable.”

Spencer isn’t the only one who sees this. There have been calls in both
the U.S. and abroad to, at least, relax Basel II until the crisis is
over. But the Boys from Basel haven’t budged an inch. The U.S did
modify these rules somewhat a year after the devastation had taken
place here, but the rules are still fully in place in the rest of the
world and the results are appalling.

The credit crisis that started in the U.S. has spread around the globe
with the speed that only the digital universe could make possible.
You’d think Mr. Freeze from the 2004 Batman movie was at work.

We have already noted that stock markets around the world have lost half of their value, erasing trillions. Some selected planet-wide stats make it clear that it is not just stock values that have crashed.

China’s industrial production fell 12% last year, while Japan’s exports
to China fell 45% and Taiwan’s were off 55%. South Korea’s overseas
shipments decreased 17%, while their economy shrank 5.6%.

Singapore’s exports were off the most in 33 years and Hong Kong’s exports plunged the most in 50 years. Germany had a 7.3% decline in exports in the fourth quarter of last year, while Great Brit
in’s real estate market declined 18% in the last quarter compared to a year earlier.

Australia’s manufacturing contracted at a record pace last month bringing the index to the lowest level on record.

There’s much more, but I think it is obvious that credit pipe can no longer be smoked.

Welcome to planetary cold turkey.


It is fascinating to look at the date coincidence of the crash in the
U.S. Earlier I noted that the stock market continued to rise throughout
2007, peaking in October of 2007. The dip in October turned
to a route in November.

The Basel II standards were implemented here by the U.S. Financial Accounting Standards on November 15, 2007.

There are more oddities.

Despite the fact that Hammering Hank dished out hundreds of billions to his banker buddies to “stimulate” the economy and defrost the credit markets, the recipients of these taxpayer bailout billions have made it clear that they will be reducing the amount of money they will be lending over the next 18 months by as much as $2 trillion to conform to Basel II. (Any other bailout passed by Congress now is clearly smoke-n-mirrors because Basell II must be adhered to.)

What do you think—Hank, with his Harvard MBA, didn’t know? The former chairman of the most successful investment bank in the world didn’t know that the Basel II regulations would inhibit his homies from turning the lending back on?

Maybe it slipped his mind.

Like the provision he put into his magnum opus, the $700 billion bailout called TARP. It carried a provision for the Federal Reserve to start paying interest on money banks deposited with it.

Think this through for a minute. The apparent problem is that the credit markets are frozen. Banks aren’t lending. They can’t use the money from TARP to lend because Basel II says they can’t. On top of
this, Paulson’s bailout lets the Fed pay interest on funds they deposit there.

If I am the president of a bank, and let’s say that I’m not Basel II impaired, why in the world am I going to end to customers in the midst of the worst financial crisis in human history when I can click a mouse
and deposit my funds with the Fed and sit back and earn interest from them until the chaos subsides?

But, hey, maybe Hank’s been putting aspartame in his coffee.

No, this stuff is as obvious as the neon signs on Broadway to the folks who play this game. This is banking 101.

So, given the provisions of Basel II and the refusal of the BIS to lift or suspend the regulations when they are clearly the driving force behind the planet-wide credit crisis, and considering the lack of
provisions in Paulson’s bailout bill to mandate that taxpayer funds given to banks must actually be lent, and give the added incentive in the bill for banks to deposit their bread with the Fed, one gets the
idea that maybe,  just maybe, these programs weren’t designed to cure this crisis; maybe they were designed to create it.

Indeed, my friends, this is crisis by design.

Someone planned the assassination and someone pulled the trigger.


All of which begs the question, How come?
Why drive the planet into the throws of fiscal withdraw—of job losses, vaporized home equity, and pillaged 401ks and IRAs?

Because when the pain is bad enough, when the stock markets are in shambles, when the cities are teaming with the unemployed, when the streets are awash with riots, when governments are drenched in the sweat of eviction and overthrow, then the doctor will come with the needle of International Financial Control.

This string of ineffective solutions put forth by people who know better are convincing bankers, investors, corporations and governments of one thing: the system failed and even the U.S. government—the anchor of international finance (which is blamed for causing the disaster)—has lost its credibility.

The purpose of this financial crisis is to take down the United States and the U.S. dollar as the stable datum of planetary finance and, in the midst of the resulting confusion, put in its place a Global Monetary Authority—a planetary financial control organization to “ensure this never happens again.”


Bank of International Settlements (BIS)

Sound Orwellian? Sound conspiratorial? Sound too evil or too vast to be real?

This entity is being moved forward by world leaders “as we speak.” It is coming and the pace is quickening.

A year ago, I saw an article in which the president of the New York Federal Reserve bank was calling for a “Global Monetary Authority” or GMA to deal with the world’s financial crisis. While I have seen
following international banking institutions for some time, this was the clue that they were making their move. I wrote an article on it at the time.

By the way, as some may recall, the president of the New York Fed last year was a man named Timothy Geithner. Geithner was very involved in structuring the booby-trapped TARP bailout with Paulson and Bernanke.

Of course, now, he is the Secretary of the Treasury of the United States.

Change we can believe in.

Once Geithner started to push a global financial authority as the solution to the world’s financial troubles, other world leaders and opinion-leading voices in international finance began to forward this
message. It has been a PR campaign of growing intensity. Meanwhile, behind the scenes, the international bankers are keeping their hands on the throat of the credit markets choking off lending while the planet’s financial markets asphyxiate and be some more and more desperate for a solution.

British Prime Minister Gordon Brown, who has taken the point on this, has said that the world needs a “new Bretton Woods.” This is the positioning. (Bretton Woods, New Hampshire, was the location where world leaders met after the Second World War and established the international financial organizations called the International Monetary Fund (IMF) and the World Bank to help provide lending to countries in need after the war.)

Sir Evelyn de Rothschild called for improved (international) regulations, while the Managing Director of the IMF suggested a “high level of ministers capable of reaching agreements and implementing

Thormer director of the IMF, Michael Camdessus, called on “the global village” to “urgently and radically” implement international regulations. As the crisis has intensified, so too have calls for a global financial policeman, and of late, the PR has been directed in favor of—surprise—the Bank of International Settlements.

The person at the BIS who was primarily responsible for the creation of Basle II is Jaime Caruana. The BIS Board has now appointed him as the General Manager, the bank’s chief executive position, where he will be in charge of dealing with the current financial crisis which he had no small part in creating.

A few well-chosen sound bites tell the story. Following a recent IMF function, discussion centered on the fact that the BIS could provide effective market regulation, while the Global Investor magazine opined that “…perhaps the Bank of International Settlements in Basel…” could undertake the task of best dealing with the crisis in the financial markets.

The UK Telegraph is right out front with it.

“A new global solution is needed because the machinery of global economic governance barely exists…it’s time for a Bretton Woods for this century.

“The big question is whether it is time to establish a global economic ‘policeman’ to ensure the crash of 2008 can never be repeated.”

“The answer might be staring us in the face in the form of the Bank of International Settlements (BIS). The BIS has been spot on throughout this.”

And so you see, this was a drill. This was a strategy: bring in Easy Money Alan to loosen the credit screws; open the floodgates to mortgage loans to the seriously unqualified with the CRA, bundle these as securities, repeal Glass-Steagall and waive capital requirements for investment banks so the mortgage-backed securities could be sold far and wide, wait until the loans matured a bit and some became delinquent and ensure the media spread this news as if Heidi Fleiss had had a sex-change operation, then slam in an international accounting rule that was guaranteed to choke off all credit and crash the leading economies of the world.

Ensure the right people were in the key places at the right time—Greenspan, Paulson, Geithner and Caruana.

When the economic pain was bad enough, promote the theory that the existing financial structures did not work and that a Global Monetary Authority—a Bretton Woods for the 21st century—was needed to solve the crisis and ensure this does not happen again.

Which is exactly where we are right now.


Let me preface this section by saying that this is advice designed to
help you orient your assets, i.e., your reserves, your retirement
plans, etc., to the Brave New World of international finance. It is not
meant as advice about what you do with your business or your job, or
your personal life.

Those things are all senior to this subject, which has a very narrow
focus. There is an embarrassment of riches of materials that you can
use to stay ahead of and on top of this crisis. Use them to flourish
and prosper. This article is not a call to cut back or contract. It is
to provide you information so you know what is going on and can plan.

Enough said.

First of all, while not likely, but just in case Timothy Geithner is
shocked into some New Age epiphany and Ben Bernanke grows some real
wisdom in his polished dome, this is what the government should do:

1) Cancel any aspects of Basel II that are causing banks to misevaluate their assets.

2) Remove the provision of TARP that permits the Fed to pay interest on deposits.

3) Mandate that any funds given under the TARP bailout or that are to
be given to banks in the future must be used to lend to deserving

4) Repeal the Community Reinvestment Act.

5) Reinstate Glass-Steagall.

6) Restore mandated capital requirements to investment banks.

7) And in case Congress decides to cease being a flock of frightened
sheep and take responsibility for the country’s monetary policy, they
should get rid of the privately owned Federal Reserve Bank and
establish a monetary system based on production and property.

8) But if a global monetary authority is put in place, it should not be
controlled by central bankers. It should be fully controlled directly
by governments with real oversight over it and with a system of checks
and balances. This you can communicate when this matter hits Congress
or the White House or both (which it almost certainly will).

And what do you do with your reserves in this Brave New World of international finance?

Modesty aside, please do what I have been recommending for a few years
now: get liquid (out of the stock and bond markets) and put some of
your assets into precious metals, gold and silver, but more heavily
into silver.

Keep the rest in cash (CDs and T-bills) and perhaps a small bit in some
stronger foreign currencies like the Chinese yuan (also referred to as
the RMB, which is short for renminbi)

And remember that my recommendations are based on my 30 years of
experience in banking, finance and investments but I have no crystal
ball and make no guarantees regarding my recommendations.

We are living in the most challenging economic times this planet has
ever seen. I hope this article has helped shed some light on what is
currently happening on the international financial scene. I didn’t
cover everything, as I don’t have time to write another book right now.
Nor did I cover everyone involved, but these are the broad strokes.

If you want to follow these shenanigans, log on to The Road to London Summit.
It will all look and sound very reasonable—all about saving jobs and
homes—but you have seen behind the wizard’s curtain and the above is
what is really going on.

Keep your powder dry.

, , , , ,

December 14, 2009 Posted by | 1 | , , , , , | 5 Comments

Goldman Sachs is a conspiracy with the government?

Detective Krum

In plain English, a derivative in real estate means a value on real estate property that was decided upon various factors.  When the banks have a percentage of their portfolio in derivatives it means the banks have loans on real estate where the loan value is based upon various factors.  What are the various factors? Tranches are one example. A Tranche is a package of loans. The bottom line? Loans were made on real property not based on fair market appraisals but on how many loans are put into a package of loans (tranches) and a speculation of what the property value should or could be (derivative).  So why am I writing about this?

I read a very good article on World Net Daily. An interesting point I want to mention is quoted.

“According to the latest numbers from the Treasury Department, JPMorgan and Goldman Sachs are holding the bag on 60 percent of the world’s derivatives – an astonishing $120 trillion between them, Still reports.

But instead of being held responsible for the collapse of the world economy, they were rewarded during the debacle by being allowed to absorb their primary competitors.”

“JPMorgan was the biggest winner in the government bailouts, after receiving a $25 billion loan, it gobbled up Bear Stearns‘ assets for about two cents on the dollar and then the assets of Washington Mutual – the nation’s largest failed bank – for less than a penny on the dollar. Goldman Sachs received approximately $50 billion, but both firms have now repaid the government.”

“According to Treasury figures at the end of June, Morgan held a staggering $80 trillion in derivative exposure, 50 times more than its $1.6 trillion in assets. Goldman Sachs is in an even more precarious condition. It holds $40 trillion in derivatives backed by assets of only $120 billion – a leverage of 333-to-1.

“To put this into perspective,” said Still, “The Gross Domestic Product of the United States is a mere $14 trillion. Even the world GDP is only $65 trillion, and the best estimate of the worth of everything in the world is only $200 trillion. That’s how big these numbers are.”

“Mega-investor Wayne Rogers is certainly not shy about identifying the problem. On “Cashing In” on the Fox News Channel Saturday, he put it this way: “Goldman Sachs is a conspiracy with the government. They are a fascist organization. They are supplying the guy who is the secretary of the Treasury, then he goes back to Goldman Sachs. Meantime he owns 800,000 shares of Goldman Sachs and Goldman Sachs gets bailed out by the government. The whole thing is outrageous. Let them go down.”

Read the rest of the article from World Net Daily here and there is a short four minute video you might find interesting.





November 18, 2009 Posted by | 1 | , , , , , , | Leave a comment

6 More Bank Failures – 3 in Florida

Detective Krum

Detective Krum

Total bank failures so far for 2009? 106  Three of the latest bank failures – Florida.  Partners Bank located in Naples, Florida  Hillcrest Bank, also in Naples, Florida and Flagship National Bank of Sarasota, Florida.  Minnesota and Wisconsin felt the bank failure sting as well. Riverview Community Bank located in Otsego, Minnesota and Bank of Elmwood in Racine, Wisconsin failed.

The bank failure list continues to grow in spite of Congress’ claim of saving banks through bailouts.  One might ask, ‘What banks did the American taxpayer bailout?  Is there a connection between the banks bailed out and Congress representatives? ‘  106 bank failures in ten months – AFTER – bank bailouts leads our readers to ask – What was the purpose of the bailout money?

Here is a copy of the press release.

First Federal Bank of Florida, Lake City, Florida, Assumes All of the Deposits of Flagship National Bank, Bradenton, Florida

October 23, 2009

Flagship National Bank, Bradenton, Florida, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Federal Bank of Florida, Lake City, Florida, to assume all of the deposits of Flagship National Bank.

The four branches of Flagship National Bank will reopen on Monday as branches of First Federal Bank of Florida. Depositors of Flagship National Bank will automatically become depositors of First Federal Bank of Florida. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from First Federal Bank of Florida that it has completed systems changes to allow other First Federal Bank of Florida branches to process their accounts as well.

This evening and over the weekend, depositors of Flagship National Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of August 31, 2009, Flagship National Bank had total assets of $190 million and total deposits of approximately $175 million. First Federal Bank of Florida did not pay the FDIC a premium for the deposits of Flagship National Bank. In addition to assuming all of the deposits of the failed bank, First Federal Bank of Florida agreed to purchase essentially all of the assets.

October 28, 2009 Posted by | 1 | , , | Leave a comment

Democrat or Republican Bank Failures

Detective Krum

Detective Krum

A whopping 98 Banks have failed in 2009 and we have three more months to go.

And 26 banks failed in 2008.

Compare to 27 banks failed from 2000 until 2008.

I thought the bank bailouts were going to save the banks.  Yet since the bailouts, bank failures have been five times higher than prior to the bank bailouts. Maybe you need to ask your Congressman/woman why the disparity.  Then ask what was the purpose of the bailout.  Then you may want to tell them to repeal the law.

I thought I’d look at the states that have failed banks, do they have a Democrat or Republican governor?  Here are my results: 47 Democrat entries 51 Republican entries. We know Arnold Schwarzenegger of California, Charlie Crist of Florida and probably Sonny Purdue of Georgia are not conservative Republicans – they are very liberal Democrats who couldn’t get elected unless they ran as a Republican. They will be added to our Lip Service Candidate list here.

List of the 98 failed banks for 2009:

Southern Colorado National Bank Pueblo CO August William “Bill” Ritter, Jr Democrat
Jennings State Bank Spring Grove MN Timothy Pawlenty Republican
Warren Bank Warren MI Jennifer M. Granholm Democrat
Georgian Bank Atlanta GA Sonny Perdue Republican
Irwin Union Bank, F.S.B. Louisville KY Steven L. Beshear Democrat
Irwin Union Bank and Trust Company Columbus IN Mitch Daniels Republican
Venture Bank Lacey WA Christine Gregoire Democrat
Brickwell Community Bank Woodbury MN Timothy Pawlenty Republican
Corus Bank, N.A. Chicago IL Pat Quinn Democrat
First State Bank Flagstaff AZ Janet Napolitano Democrat
Platinum Community Bank Rolling Meadows IL Pat Quinn Democrat
Vantus Bank Sioux City IA Chester John “Chet” Culver Democrat
InBank Oak Forest IL Pat Quinn Democrat
First Bank of Kansas City Kansas City MO Jay Nixon Democrat
Affinity Bank Ventura CA Arnold Schwarzenegger Republican
Mainstreet Bank Forest Lake MN Timothy Pawlenty Republican
Bradford Bank Baltimore MD Martin Joseph O’Malley Democrat
Guaranty Bank Austin TX Rick Perry Republican
CapitalSouth Bank Birmingham AL Bob Riley Republican
First Coweta Bank Newnan GA Sonny Perdue Republican
ebank Atlanta GA Sonny Perdue Republican
Community Bank of Nevada Las Vegas NV James Arthur “Jim” Gibbons Republican
Community Bank of Arizona Phoenix AZ Janet Napolitano Democrat
Union Bank, National Association Gilbert AZ Janet Napolitano Democrat
Colonial Bank Montgomery AL Bob Riley Republican
Dwelling House Savings and Loan Association Pittsburgh PA Edward G. Rendell Democrat
Community First Bank Prineville OR Ted Kulongoski Democrat
Community National Bank of Sarasota County Venice FL Charles Joseph Crist, Jr. Republican
First State Bank Sarasota FL Charles Joseph

Crist, Jr.

Mutual Bank Harvey IL Pat Quinn Democrat
First BankAmericano Elizabeth NJ Jon Stevens Corzine Democrat
Peoples Community Bank West Chester OH Ted Strickland Democrat
Integrity Bank Jupiter FL Charles Joseph Crist, Jr. Republican
First State Bank of Altus Altus OK Brad Henry Democrat
Security Bank of Jones County Gray GA Sonny Perdue Republican
Security Bank of Houston County Perry GA Sonny Perdue Republican
Security Bank of Bibb County Macon GA Sonny Perdue Republican
Security Bank of North Metro Woodstock GA Sonny Perdue Republican
Security Bank of North Fulton Alpharetta GA Sonny Perdue Republican
Security Bank of Gwinnett County Suwanee GA Sonny Perdue Republican
Waterford Village Bank Williamsville NY David A. Paterson Democrat
Temecula Valley Bank Temecula CA Arnold Schwarzenegger Republican
Vineyard Bank Rancho Cucamonga CA Arnold Schwarzenegger Republican
BankFirst Sioux Falls SD M. Michael Rounds Republican
First Piedmont Bank Winder GA Sonny Perdue Republican
Bank of Wyoming Thermopolis WY Dave Freudenthal Democrat
Founders Bank Worth IL Pat Quinn Democrat
Millennium State Bank of Texas Dallas TX Rick Perry Republican
First National Bank of Danville Danville IL Pat Quinn Democrat
Elizabeth State Bank Elizabeth IL Pat Quinn Democrat
Rock River Bank Oregon IL Pat Quinn Democrat
First State Bank of Winchester Winchester IL Pat Quinn Democrat
John Warner Bank Clinton IL Pat Quinn Democrat
Mirae Bank Los Angeles CA Arnold Schwarzenegger Republican
MetroPacific Bank Irvine CA Arnold Schwarzenegger Republican
Horizon Bank Pine City MN Timothy Pawlenty Republican
Neighborhood Community Bank Newnan GA Sonny Perdue Republican
Community Bank of West Georgia Villa Rica GA Sonny Perdue Republican
First National Bank of Anthony Anthony KS Mark V. Parkinson Democrat
Cooperative Bank Wilmington NC Beverly Perdue Democrat
Southern Community Bank Fayetteville GA Sonny Perdue Republican
Bank of Lincolnwood Lincolnwood IL Pat Quinn Democrat
Citizens National Bank Macomb IL Pat Quinn Democrat
Strategic Capital Bank Champaign IL Pat Quinn Democrat
BankUnited, FSB Coral Gables FL Charles Joseph Crist, Jr. Republican
Westsound Bank Bremerton WA Christine Gregoire Democrat
America West Bank Layton UT Jon Huntsman, Jr. Republican
Citizens Community Bank Ridgewood NJ Jon Stevens Corzine Democrat
Silverton Bank, NA Atlanta GA Sonny Perdue Republican
First Bank of Idaho Ketchum ID Clement Leroy “Butch” Otter Republican
First Bank of Beverly Hills Calabasas CA Arnold Schwarzenegger Republican
Michigan Heritage Bank Farmington Hills MI Jennifer M. Granholm Democrat
American Southern Bank Kennesaw GA Sonny Perdue Republican
Great Basin Bank of Nevada Elko NV James Arthur “Jim” Gibbons Republican
American Sterling Bank Sugar Creek MO Jay Nixon Democrat
New Frontier Bank Greeley CO August William “Bill” Ritter, Jr Democrat
Cape Fear Bank Wilmington NC Beverly Perdue Democrat
Omni National Bank Atlanta GA Sonny Perdue Republican
TeamBank, NA Paola KS Mark V. Parkinson Democrat
Colorado National Bank Colorado Springs CO August William “Bill” Ritter, Jr Democrat
FirstCity Bank Stockbridge GA Sonny Perdue Republican
reedom Bank of Georgia Commerce GA Sonny Perdue Republican
Security Savings Bank Henderson NV James Arthur “Jim” Gibbons Republican
Heritage Community Bank Glenwood IL Pat Quinn Democrat
Silver Falls Bank Silverton OR Ted Kulongoski Democrat
Pinnacle Bank of Oregon Beaverton OR Ted Kulongoski Democrat
Corn Belt Bank & Trust Co. Pittsfield IL Pat Quinn Democrat
Riverside Bank of the Gulf Coast Cape Coral FL Charles Joseph Crist, Jr. Republican
Sherman County Bank Loup City NE Dave Heineman Republican
County Bank Merced CA Arnold Schwarzenegger Republican
Alliance Bank Culver City CA Arnold Schwarzenegger Republican
FirstBank Financial Services McDonough GA Sonny Perdue Republican
Ocala National Bank Ocala FL Charles Joseph Crist, Jr. Republican
Suburban FSB Crofton MD Martin Joseph O’Malley Democrat
MagnetBank Salt Lake City UT Jon Huntsman, Jr. Republican
1st Centennial Bank Redlands CA Arnold Schwarzenegger Republican
Bank of Clark County Vancouver WA Christine Gregoire Democrat
National Bank of Commerce Berkeley IL Pat Quinn Democrat

October 5, 2009 Posted by | 1 | , , , , , | 3 Comments

SunTrust Bank Considered Weak By Some

Detective Krum

Detective Krum

It appears SunTrust Bank has a (D-) rating reflecting significant weakness. September 2009 will be the next update for SunTrust Bank but a significant weakness can impact depositors and creditors in a negative manner.

Consider about 15 banks are failing each month and although SunTrust did participate in the bank bailouts, taxpayers have been subsidizing SunTrust Bank through the bank bailouts.  Just ask yourself, when is the last time any bank did you a favor.

Weak banks are impacted from difficult economic times through magnifying their financial distresses.  Most credible experts agree, commercial real estate is the next to tank, just look at vacant stores, malls and strip shops in your neighborhood.

Regarding real estate, as of June 30, 2009 SunTrust Bank shows  about $125 million in total loans. A little over $53 million in 1-4 family homes, almost $25 million in “other” real estate, nearly $ 31 million in commercial real estate.  If commercial real estate continues to fail, SunTrust Bank could find their rating downgraded again.

Then consider, SunTrust Bank has “standby letters of credit  issued by Federal Home Loan Bank” on SunTrust’s behalf in the amount of almost $5.3 million.

September 15, 2009 Posted by | 1 | , | Leave a comment