From National Credit Union Administration: NCUA Conserves U.S. Central and Western Corporate Credit Unions
The National Credit Union Administration Board today placed U.S. Central Federal Credit Union, Lenexa, Kansas, and Western Corporate (WesCorp) Federal Credit Union, San Dimas, California, into conservatorship to stabilize the corporate credit union system and resolve balance sheet issues. These actions are the latest NCUA efforts to assist the corporate credit union network under the Corporate Stabilization Plan.Assets of $57 billion? There are some losses coming ...
The two corporate credit unions were placed into conservatorship to protect retail credit union deposits and the interest of the National Credit Union Share Insurance Fund (NCUSIF), as well as to remove any impediments to the Agency’s ability to take appropriate mitigating actions that may be necessary. ...
Corporate credit unions do not serve consumers. They are chartered to provide products and services to the credit union system. These products and services will continue uninterrupted and there is no direct impact by NCUA’s actions on the 90 million credit union members nationwide. ...
U.S. Central has approximately $34 billion in assets and 26 retail corporate credit union members. WesCorp has $23 billion in assets and approximately 1,100 retail credit union members. The member accounts of both credit unions are guaranteed under provisions of the previously announced NCUA Share Guarantee Program, through December 31, 2010. The Program extends NCUSIF coverage to all funds held by the two corporate credit unions.
...
Additional mortgage and asset backed security analysis and assessment of the two credit unions by NCUA staff enabled NCUA to refine NCUSIF’s required reserve for potential loss. The findings indicated an overall estimated reserve level, previously announced by NCUA, had increased from $4.7 to $5.9 billion. The specific computation and the impact of the refined reserve level are addressed in NCUA Letter No: 09-CU-06, which NCUA issued and posted online today at http://www.ncua.gov/letters/letters.html.
NCUA is hosting a webcast Monday, March 23 at 2 p.m. to provide the credit union community with an update on the corporate credit union stabilization program.
Investigating AIG
Everyone seems to be all abuzz about the Mike Taibbi takedown of AIG in Rolling Stone. Its a fun read — as is any piece that begins “we’re officially, royally fucked” — but there are a few other columns that do an excellent job contextualizing 1) How AIG got so heavily involved in CDOs and CDSs, and 2) What its going to take to clean up the ginormous mess they made.
If you are interested in learning the nitty gritty details about how AIG’s Financial Product division (AIGFP as it came to be known), then the place to start reading is the 3 part series WaPo did in the fall: Investigating AIG (full linkage below).
The clean up half of the story is best described by Carol Loomis in this month’s Fortune. (She makes it pretty clear that Liddy is not the bad guy).
Get crackin’ . . .
Investigating AIG: The Washington Post
Part I: The Beautiful Machine
Part 2: A Crack in the System
Part 3: Downgrades and DownfallsAIG’s rescue has a long way to go
Carol J. Loomis
Fortune DECEMBER 29, 2008: 10:46 AM ET
http://money.cnn.com/2008/12/23/news/companies/AIG_150bailout_Loomis.fortune/index.htmBehind Insurer’s Crisis, Blind Eye to a Web of Risk
GRETCHEN MORGENSON
The New York Times, September 27, 2008
http://www.nytimes.com/2008/09/28/business/28melt.html
The Big Takeover
MATT TAIBBI
Rolling Stone Mar 19, 2009 12:49 PM
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
Geithner's Toxic Asset Plan
The NY Times has some details ...
From Edmund L. Andrews, Eric Dash and Graham Bowley: Toxic Asset Plan Foresees Big Subsidies for Investors
The plan to be announced next week involves three separate approaches. In one, the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell.More approaches doesn't make a better plan.
In the second, the Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.
In the third piece, the Treasury plans to expand lending through the Term Asset-Backed Secure Lending Facility, a joint venture with the Federal Reserve.
The FDIC plan involves almost no money down. The FDIC will provide a low interest non-recourse loan up to 85% of the value of the assets.
The remaining 15 percent will come from the government and the private investors. The Treasury would put up as much as 80 percent of that, while private investors would put up as little as 20 percent of the money ... Private investors, then, would be contributing as little as 3 percent of the equity, and the government as much as 97 percent.With almost no skin in the game, these investors can pay a higher than market price for the toxic assets (since there is little downside risk). This amounts to a direct subsidy from the taxpayers to the banks.
Oh well, I'm sure Geithner will provide details this time ...
Regulators Seize Two Large Credit Unions: U.S. Central and WesCorp
From National Credit Union Administration: NCUA Conserves U.S. Central and Western Corporate Credit Unions
The National Credit Union Administration Board today placed U.S. Central Federal Credit Union, Lenexa, Kansas, and Western Corporate (WesCorp) Federal Credit Union, San Dimas, California, into conservatorship to stabilize the corporate credit union system and resolve balance sheet issues. These actions are the latest NCUA efforts to assist the corporate credit union network under the Corporate Stabilization Plan.Assets of $57 billion? There are some losses coming ...
The two corporate credit unions were placed into conservatorship to protect retail credit union deposits and the interest of the National Credit Union Share Insurance Fund (NCUSIF), as well as to remove any impediments to the Agency’s ability to take appropriate mitigating actions that may be necessary. ...
Corporate credit unions do not serve consumers. They are chartered to provide products and services to the credit union system. These products and services will continue uninterrupted and there is no direct impact by NCUA’s actions on the 90 million credit union members nationwide. ...
U.S. Central has approximately $34 billion in assets and 26 retail corporate credit union members. WesCorp has $23 billion in assets and approximately 1,100 retail credit union members. The member accounts of both credit unions are guaranteed under provisions of the previously announced NCUA Share Guarantee Program, through December 31, 2010. The Program extends NCUSIF coverage to all funds held by the two corporate credit unions.
...
Additional mortgage and asset backed security analysis and assessment of the two credit unions by NCUA staff enabled NCUA to refine NCUSIF’s required reserve for potential loss. The findings indicated an overall estimated reserve level, previously announced by NCUA, had increased from $4.7 to $5.9 billion. The specific computation and the impact of the refined reserve level are addressed in NCUA Letter No: 09-CU-06, which NCUA issued and posted online today at http://www.ncua.gov/letters/letters.html.
NCUA is hosting a webcast Monday, March 23 at 2 p.m. to provide the credit union community with an update on the corporate credit union stabilization program.
Investigating AIG
Everyone seems to be all abuzz about the Mike Taibbi takedown of AIG in Rolling Stone. Its a fun read — as is any piece that begins “we’re officially, royally fucked” — but there are a few other columns that do an excellent job contextualizing 1) How AIG got so heavily involved in CDOs and CDSs, and 2) What its going to take to clean up the ginormous mess they made.
If you are interested in learning the nitty gritty details about how AIG’s Financial Product division (AIGFP as it came to be known), then the place to start reading is the 3 part series WaPo did in the fall: Investigating AIG (full linkage below).
The clean up half of the story is best described by Carol Loomis in this month’s Fortune. (She makes it pretty clear that Liddy is not the bad guy).
Get crackin’ . . .
Investigating AIG: The Washington Post
Part I: The Beautiful Machine
Part 2: A Crack in the System
Part 3: Downgrades and DownfallsAIG’s rescue has a long way to go
Carol J. Loomis
Fortune DECEMBER 29, 2008: 10:46 AM ET
http://money.cnn.com/2008/12/23/news/companies/AIG_150bailout_Loomis.fortune/index.htmBehind Insurer’s Crisis, Blind Eye to a Web of Risk
GRETCHEN MORGENSON
The New York Times, September 27, 2008
http://www.nytimes.com/2008/09/28/business/28melt.html
The Big Takeover
MATT TAIBBI
Rolling Stone Mar 19, 2009 12:49 PM
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
Geithner's Toxic Asset Plan
The NY Times has some details ...
From Edmund L. Andrews, Eric Dash and Graham Bowley: Toxic Asset Plan Foresees Big Subsidies for Investors
The plan to be announced next week involves three separate approaches. In one, the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell.More approaches doesn't make a better plan.
In the second, the Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.
In the third piece, the Treasury plans to expand lending through the Term Asset-Backed Secure Lending Facility, a joint venture with the Federal Reserve.
The FDIC plan involves almost no money down. The FDIC will provide a low interest non-recourse loan up to 85% of the value of the assets.
The remaining 15 percent will come from the government and the private investors. The Treasury would put up as much as 80 percent of that, while private investors would put up as little as 20 percent of the money ... Private investors, then, would be contributing as little as 3 percent of the equity, and the government as much as 97 percent.With almost no skin in the game, these investors can pay a higher than market price for the toxic assets (since there is little downside risk). This amounts to a direct subsidy from the taxpayers to the banks.
Oh well, I'm sure Geithner will provide details this time ...
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