Was There A Run On The Bank? JPM Caps Some ATM Withdrawals
Under the auspices of "protecting clients from criminal activity," JPMorgan Chase has decided to impose capital controls on . As WSJ reports, following the bank's ATM modification to enable $100-bills to be dispensed with no limit, some customers started pulling out tens of thousands of dollars at a time. This apparent bank run has prompted Jamie Dimon to cap ATM withdrawals at $1,000 per card daily for non-customers.
Most large U.S. banks, including Chase, Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. have been rolling out new ATMs, sometimes known as eATMs, which perform more services akin to tellers. That includes allowing customers to withdraw different dollar denominations than the usual $20, typically ranging from $1 to $100.
The efforts run counter to recent calls to phase out large bills such as the $100 bill or the €500 note ($569) to discourage corruption while putting up hurdles for tax evaders, terrorists, drug dealers and human traffickers.
The Wall Street Journal reported in February that the European Central Bank was considering eliminating its highest paper currency denomination, the €500 note. Former U.S. Treasury Secretary Lawrence H. Summers also has called for an agreement by monetary authorities to stop issuing notes worth more than $50 or $100.
The Fed Is Pushing On A Credit String——Deeply Indebted US Households Don’t Want No More
While continuing to tout an economic recovery that is being missed by far too many, the government and economists say one thing and then move toward the other. The unemployment rate claims one economic version that is talked about openly, but then there are “little things” that various official capacities seek to carry out suggesting they realize full well the discrepancy. The most obvious is the FOMC’s reluctance to do much more than talk about rate hikes.
In the US, there hasn’t been the same growing favor to revisit fiscal “stimulus” as elsewhere but that isn’t to say there isn’t any activity.
President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession. In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.
On the surface, it seems as banking had gone from being too far forward during the housing bubble and lending skewed way too much toward NINJA to now the opposite in being far too strict. Governments, as always, want it both ways as if it could possibly divine the difference – to have quite robust lending but without any tomfoolery. To move the pendulum back, part of this new push is being undertaken by the Justice Department, as if the law bureau fits within what is clearly “clogged transmission” of monetary policy. The reason for that is certainly a relic from the housing bust, as the Obama Administration is using Justice as a platform to assure banks that there would be no legal repercussions if another housing bust came around again. It’s not quite a “get out of bubble free” card, but perhaps as close as there will ever be offered.
What New Economic Recovery?
The rise of the ‘dollar store business model’ caters to a disappearing ‘middle class’ who are incurring shrinking incomes. This has made ‘dollar stores’ prosper, in the last decade. Dollar stores, for most Americans, have carried an odd sort of stigma. In the past, these stores were seen as shopping for the poor, only. We are all now aware that many people who were in the once strong American ‘middle class’ were thrown off of the prosperity path and into ‘lower income’ brackets from business layoffs, downsizing, and salary reduction. While regular product companies struggle the expanding ‘dollar stores’ have found a niche in this economic climate. The shrinking ‘middle class’ means more customers for ‘dollar stores’.
A big part of the ‘new recovery’ is lining up at midnight at Wal-Mart stores in order to purchase food. There are families not able to feed their families by the end of the month. They are literally lining up at midnight at Wal-Mart stores, waiting to buy food along with their Electronic Benefit Transfer (EBT) Cards when their funds are deposited into their accounts.
EBT cards are an electronic system that allows state welfare departments to issue benefits via magnetically encoded payment cards, used in the United States. The average monthly EBT payout is $125.00 per person!
Common benefits provided (in the United States) via EBT, are typically of two general categories: food and cash benefits. Food benefits are federally authorized benefits that can be used only to purchase food and non-alcoholic beverages. Food benefits are distributed through the Supplemental Nutrition Assistance Program (SNAP), formerly the Food Stamp Program. Cash benefits include state general assistance, Temporary Assistance for Needy Families (TANF) benefits, and refugee benefits.
Another Troubled City, Another Subsidized Stadium To the Rescue
19 Facts That Prove Things In America Are Worse Than They Were Six Months Ago
Has the U.S. economy gotten better over the past six months or has it gotten worse? In this article, you will find solid proof that the U.S. economy has continued to get worse over the past six months. Unfortunately, most people seem to think that since the stock market has rebounded significantly in recent weeks that everything must be okay, but of course that is not true at all. If you look at a chart of the Dow, a very ominous head and shoulders pattern is forming, and all of the economic fundamentals are screaming that big trouble is ahead. When Donald Trump told the Washington Post that we are heading for a “very massive recession“, he wasn’t just making stuff up. We are already seeing lots of things happen that never take place outside of a recession, and the U.S. economy has already been sliding downhill fairly rapidly over the past several months. With all that being said, the following are 19 facts that prove things in America are worse than they were six months ago…
U.S. factory orders have now declined on a year over year basis for 16 months in a row. As Zero Hedge has noted, in the post-World War II era this has never happened outside of a recession… In 60 years, the US economy has not suffered a 16-month continuous YoY drop in Factory orders without being in recession. Moments ago the Department of Commerce confirmed that this is precisely what the US economy did, when factory orders not only dropped for the 16th consecutive month Y/Y, after declining 1.7% from last month
Factory orders have now reached the lowest level that we have seen since the summer of 2011. It is being projected that corporate earnings will be down 8.5 percent for the first quarter of 2016 compared to one year ago. This will be the fourth quarter in a row that we have seen year over year declines, and the last time that happened was during the last recession. Total business sales have fallen 5 percent since the peak in mid-2014.
S&P 500 earnings have now fallen a total of 18.5 percent from their peak in late 2014. Corporate debt defaults have soared to the highest level that we have seen since 2009. The average rating on U.S. corporate debt has fallen to “BB”, which is lower than it has been at any point since the last financial crisis. The U.S. oil rig count just hit a 41 year low. Oil and gas drillers in North America have filed for bankruptcy since the beginning of last year, and according to CNN we could be on the verge of seeing the biggest one yet…
Children Born in 2016 Hold $42,000 in Public Debt
Out of control spending drives national debt to unsustainable levels and the government knows it. The recently published 2017 fiscal year House Congressional Budget Resolution even features a chart titled “Spending is the Problem.”
But Congress needs to practice what it preaches. The very same document proposes spending $57 billion more on discretionary programs than what Congress proposed to spend on this budget category last year.
Time and again legislators fail to take their own advice to reduce spending. Instead they put off serious budget solutions while the national debt balloons. By the end of the decade, our national debt held by the public is expected to reach $23.6 trillion, or 85.6 percentage of GDP (gross domestic product). This is expensive for Americans today, but crippling for the next generation.
When new parents worry for the future they rarely consider how the national debt will impact their families. Unfortunately, if left unchecked, our growing debt will pose a serious threat to American families’ financial well-being.
How are millions still underwater as home prices rise?
Fast-rising home prices brought 1.5 million borrowers up from underwater on their mortgages in 2015, but there are still twice as many drowning. In total, 3.2 million homeowners nationally still owe more on their mortgages than their homes are currently worth, according to a new count by Black Knight Financial Services.
That brings the average negative equity rate to 6.5 percent, a vast improvement from the worst of the housing crash, but still well above historical norms. More concerning is that negative equity is now concentrated at the bottom price tier of the market. More than 16 percent of borrowers in these homes are underwater, which means they are frozen in place, unable to sell without losing money; these are the homes the market needs most, in order for young renters to become homeowners.
"Even after four years of improvement, the recovery has not reached all corners," said Ben Graboske, senior vice president of Black Knight Data & Analytics. "When we looked at the population by home price levels, we found that over half of the nation's underwater properties are in the lowest 20 percent of their respective markets. That's the highest share on record."
At the current rate of improvement in home prices, it would take more than five years for the negative equity rate at the low end of the housing market to reach 2005 levels, which is twice as long as homes in the top tier of the market, according to Graboske. As with everything in real estate, the underwater numbers vary depending on location. Nevada, where home prices are still 34 percent below their peak, wins the dubious distinction of having the largest share of underwater borrowers at 14 percent.
The Panama Papers bombshell
Why The Auto Loan Bubble Is As Important As The Student Loan Bubble
The growth of student loan debt has received no shortage of attention from politicians and the media in recent years, making it one of the top economic anxieties in post-mortgage-meltdown America. Behind the front-page investigations and populist political platforms, the numbers are indisputably chilling: student loan balances have surged from less than $18,000 per person to $25,000 per person in the ten years since 2005. But another class of debt is also growing at troubling rates without attracting anywhere near the same level of attention: car loans.
While American consumers have reduced their overall debt in the years since the Great Recession, car loans have grown at roughly the same rate as student loans, according to The St. Louis Federal Reserve. Together, loans for cars and education contributed 90 percent of the growth in consumer debt since the end of 2012. Outstanding auto loans have hit more than a trillion dollars, with an average balance of $12,000 per person (or nearly 8 percent of disposable income), while the dreaded student loans “epidemic” is not far ahead at $1.3 trillion outstanding.
When the media does obliquely cover the rise of auto loans, it’s usually under the rubric of praising “booming new car sales” in the wake of the auto bailout. This fits nicely with the narrative that the auto industry rescue drove a strong recovery in new car demand, which in turn has lifted the broader economic recovery. This ignores that new car loans, not the cars themselves, have become the new hot product and that Wall Street, not car-loving Americans, is the real market.
Auto Asset Backed Securities (ABS), securitized bundles of car loans not unlike the mortgage-backed securities at the heart of the 2008 credit crisis, are the hidden driver of the auto debt boom. In the first two months of 2016 lenders issued $17.69 billion in new auto ABS compared with just $1 billion in credit card debt-backed ABS and $600 million in student loan-backed ABS. With subprime auto loans growing faster than the regular market, the return on these investments are improving even as the risk grows. In 2015 some 23.5 percent of all new car loans were subprime, a significant proportion but not enough to trigger an economic meltdown.
30% of bank jobs are under threat
Digital disruption is turning finance on its head -- and destroying tons of traditional banking jobs along the way.
A wave of innovation has made it possible for people to get their banking done without walking into a branch if they don't want to. People can now deposit checks using a smartphone or digitally fire off cash to friends using Venmo.
The end result is a pretty sweet experience for consumers ... but an imminent threat to people who work at bank branches. The downsizing of the bank workforce is about to accelerate as more technology takes over jobs humans used to do, according to a new Citigroup report. Another 30% of bank jobs could be lost between 2015 and 2025, mainly due to retail banking automation, Citi warned.
"Fintech is forcing banking to a tipping point," Citi said. Former Barclays CEO Antony Jenkins has likened this to the banking industry's Uber moment. Indeed the smartphone revolution has shifted the e-commerce landscape to a point that threatens more established players. The payments business has experienced some of the greatest changes, with platforms like PayPal, Apple Pay and Square transforming the way consumers make payments.
How to create an offshore shell company
As the poor die earlier, Social Security isn't paying off
Death and taxes may be inevitable, but they hit the rich and poor in different -- and sometimes unfair -- ways.
That's increasingly evident with the expected life spans of today's workers, given that low-income Americans are projected to die as many as 13 years earlier than their wealthier cohort, while a century ago the rich and poor had relatively identical lifespans, according to new research into longevity and retirement from the Government Accountability Office that was prepared for Democratic presidential candidate Sen. Bernie Sanders (D-VT).
The growing gap between the lifespans of the rich and poor is eating away at the benefits that poor workers can expect from Social Security, the report found. American men who make about $20,000 annually are likely to lose as much as 14 percent of their Social Security lifetime benefits because of their shorter-than-average lives, while men making $80,000 per year stand to see a gain of 18 percent in their benefits given their additional years on earth, the report found. Boosting the retirement age would only exacerbate those disparities, the GAO warned.
Because poor Americans often rely on Social Security as their sole means of support in retirement, boosting the retirement age would provide a double-whammy to many low-income workers. They'd still die at an earlier age than rich Americans, while also being penalized if they couldn't continue working until an even older full retirement age.
'Ransomware' crime wave growing
It began with an early morning phone call and instant fear for the technology director of Horry County, South Carolina's school district.
Computer servers were acting unusual, and Charles Hucks listened as his administrators described frozen computers and a cryptic message spreading across computer screens. Hucks raced to shut down the system before the unidentified virus could spread, but in minutes, up to 60% of the school district's computers were frozen. Hackers had encrypted the school's data, and that cryptic message was a ransom note.
"They said, 'Hey you want to free your data? Pay us,'" Hucks told CNN. The school district nestled in the far northeast corner of South Carolina's coast became the latest victim in a crime wave racing across the globe.
Experts call the crime "ransomware," where criminals lock digital files, like text documents and pictures, and demand a ransom before the system is unlocked. The FBI says it received 2,453 complaints about ransomware hold-ups last year, costing the victims more than $24 million dollars. Victims often pay because, so far, authorities like the FBI have been unable to stop it. That was the conclusion made by the Horry County School District.
More Baby Boomers abandon the American Dream
After having the home in the suburbs, the kids, the two cars, and maybe even the picket fence, a growing number now want to ride elevators to rental apartments and walk out the door to restaurants. When the kids are grown, an increasing number of empty nesters are selling homes and aspiring to live like urban millennials — in rental buildings full of amenities and free of lawn mowing, shoveling, mortgages and property taxes.
It's not unusual for empty nesters to consider downsizing and avoiding tasks such as yard work. But typically downsizing has meant buying smaller homes or condos. Now, for a generation with a reputation for setting trends and yearning for freedom, an increasing number want to rent rather than own.
"It's nice to have freedom," said Michel Winkelstein, who moved into a River North apartment with his wife, Susan, after selling their Glenview home about three years ago. Michel Winkelstein now walks to work at his downtown law office, and Susan Winkelstein says she feels like she's on vacation every day. Apartment living at 501 N. Clinton St. frees up time spent on maintenance and they walk to restaurants, plays, movies and musical events.
"We both feel like we are in our 20s," said Michel Winkelstein. The number of boomer renters is still small. But there were just 10 million in their 50s and 60s in 2005, and in 2015 there were 15 million. They account for more than half of the nation's renter growth in the last 10 years, according to Jennifer Molinsky, researcher for the Joint Center for Housing Studies of Harvard University. She calls it a "dramatic increase," and a trend that's likely to continue as the giant generation of 77 million people, born between 1946 and 1964, ages and seeks easy living.
Jerry Brown:‘Economically, minimum wage may not make sense’… Signs legislation anyway
Gov. Jerry Brown, casting a living wage as a moral imperative while questioning its economic rationale, signed legislation Monday raising California’s mandatory minimum to $15 an hour by 2022, acting within hours of a similar bill signing in New York.
The bill’s enactment comes one week after Brown, Democratic lawmakers and labor leadersannounced an agreement on the wage increase, averting a brawl on the November ballot.
In adopting the measure, California joined New York as the first states in the nation to enact a plan to raise their statewide minimums to $15. New York Gov. Andrew Cuomo signed his state’s legislation and was cheered by labor unions at a rally moments before Brown spoke in California.
Brown, a fiscal moderate, had previously expressed reservations about a wage increase. But amid growing concern about income inequality in California and the national thrust of the labor-backed “Fight for 15” campaign, his hand was forced. Public opinion polls showed strong support for increasing the state’s mandatory minimum beyond its current $10.
Fund managers' miserable quarter
Credit Suisse faces tough questions after US$1 billion write-downs
On Jan. 19, Credit Suisse Chief Executive Tidjane Thiam contacted the head of the Swiss bank's markets business asking for more details about the fourth-quarter results at the trading division, according to materials seen by Reuters.
Two-and-a-half months and nearly US$1 billion in write-downs later, investors, analysts and former board members are questioning why Thiam and his finance chief, David Mathers, were caught out by the scale of the division's illiquid trades - positions that are not easy to sell out of.
The write-downs have compounded for Credit Suisse what has already been a tough start to 2016 for all investment banks, with its share price down around 38 percent so far this year, one of the biggest slides of all large European lenders.
In January, Thiam, by then just over six months into his job as CEO of Switzerland's second-biggest bank, wondered whether Credit Suisse had gone too big on some trades and addressed the issue with another top executive.
US Factory and Durable Goods Orders Declined in February
According to the US Census Bureau, the dollar volume of factory orders during February fell by 1.7% on a month-over-month basis. The consensus estimate among analyst according to Thomson Reuters was for a decrease of 1.6%. In January, the orders volume rose by 1.6%.
Orders for items which are expected to last more than three years declined by 2.8% in February, as per Durable Goods Orders. This is in line with the 2.8% drop experienced in January and consensus analyst estimate.
Markets are showing little reaction to the data release The ICE US dollar index (DXY) is trading lower for the day by 0.17% to 94.47, while equities are flat in early trade. The benchmark S&P 500 index is currently higher by 1 point, or 0.4% to 2,074.
Looking at the state of the manufacturing sector per March ISM data: On Friday, we saw the ISM Manufacturing PMI rise back into expansion territory to 51.8 for March, the first sign of growth in several months.