US Bancorp

Investors take note, the markets are sending multiple signals that things are not going well in the world. Stocks are always the last asset class to realize this.

Work in the mortgage market?  Never read about Kamala Harris or the  CA "Home Owner Bill of Rights?"  Read on....

Presenting Dave Collum's now ubiquitous and all-encompassing annual review of markets and much, much more. From Baptists, Bankers, and Bootleggers to Capitalism, Corporate Debt, Government Corruption, and the Constitution, Dave provides a one-stop-shop summary of everything relevant this year (and how it will affect next year and beyond).

Why does the Big Media other than WSJ refuse to report on the TAG subsidy grab by the largest banks?  

Reports that the housing sector is recovering has generated more than a little irrational exuberance among investors regarding financials. 

George Soros more than doubled his shares in the SPDR gold trust ETF. He increased his position in SPDR Gold to $137.3 million in the second quarter from $52 million previously. SEC filing for the second quarter showed Soros Fund Management more than doubled its investment in the SPDR Gold Trust from 319,550 shares to 884,400 shares at the end of June. In September 2010 (see chart), Soros called gold "the ultimate bubble" and largely dumped his stake in the ETF before gold recorded annual gains in 2010 and 2011 and rose to a nominal high of $1,920.30 per ounce in September.  There was speculation at the time that he may have sold the SPDR trust in order to own far safer allocated gold bars. Another billionaire investor respected for his financial acumen is John Paulson and Paulson & Co increased its holdings by 26% by purchasing an additional 4.53 million shares of the SPDR Gold Trust to bring entire holding to 21.8 million shares.  It was the first time Paulson & Co had increased its position in the SPDR Gold Trust since the first quarter of 2009, when the investment firm initially acquired 31.5 million shares. It means that Paulson's $21 billion hedge fund now has more than 44% of the company's assets allocated to gold.

Nobody on the Buy Side wants to sue JPM, Goldman Sachs, Morgan Stanley et al for securities fraud on the more problematic deals of the past decade.

And the real lesson, dear friends, is that the good old USA is a subprime nation

On Friday the FDIC reminded us that the banking crisis continues, closing and selling several institutions in arranged transactions.   This may seem gloomy news, but please note that the shareholders of the acquiring institutions just made a lot of money.

You might think the banks have all the leverage in the world, the big secret is it's actually the opposite. Who do you think has more leverage, those who make payment on 7 trillion in securitized mortgage debt, or those who collect the payments? Who do you think is more worried? You probably make your income from a wage, they make their income from an investment, you wouldn't believe how quickly investors can become insecure, that's why your servicer doesn't want you talking to them directly, their brokers, and make a handsome living at it. Our thinking is the guy who writes the check has the leverage. After all, if you owe the bank $100,000 dollars you've got a creditor, If you owe them 7,000,000,000,000.00 we're pretty sure you've got a partner. Stop making rental payments on the home your supposed to own, then just sit back and feel the love.

This hypothetical comes pretty close to the perfect definition of a TBTF FUBAR.

Just in time for the second crash in housing?

Does the low VIX indicate overcomplacency in the market or is it a shift into a low-vol regime?

It was only a matter of time: back in March, following revelations of the Lehman Repo 105 scam, we speculated that the days of Ernst & Young are numbered. Back then we said "we are confident that (again, with the assumption that we live in some
semblance of a sane/ration world), E&Y's Financial Services Office
is done...
and quite possibly the entire firm. Integrity is the number one
currency for an auditor, and just like Anderson, E&Y's just went out
in a puff of green-colored smoke." Today we learn that Andrew Cuomo is about to make E&Y's life a whole lot more difficult. Per the WSJ "State Attorney General Andrew Cuomo is close to filing the case, which
would mark the first time a major accounting firm was targeted for its
role in the financial crisis." Too bad - E&Y was surely hoping that just like everything else in this corrupt country, out of sight would mean out of mind, and soon everyone would forget about the firm's involvement in the biggest bankruptcy in history. Better luck next time...

• Asian stocks, Copper decline before European debt talks; Treasuries gain.
• EU faces `gridlock' on debt crisis; agrees on a crisis- management mechanism in 2013.
• India’s central bank kept benchmark interest rates unchanged after 6 increases this year.
• Oil falls to near $88 in Asia despite plunge in US crude inventory.
• Qatar makes $65B bet it can remake economy in World Cup preparation.
• US foreclosure filings plunge to two-year low as lenders probe practices.
• AAR Corp beats by $0.07, posts Q2 EPS of $0.42. Revs rose 36.0% to $447M.