Category Archives: Banks

Publicopoly Exposed

On February 25, 2011, Florida State Representative Chris Dorworth (R-Lake Mary) introduced HB 1021. The bill sought to curtail the political power of unions by prohibiting public employers from deducting any amount from an employee’s pay for use by an employee organization (i.e., union dues) or for any political activity (i.e., the portion of union dues used for lobbying or for supporting candidates for office).

Furthermore, HB 1021 stated that, should a union seek to use any portion of dues independently collected from members for political activity, the union must obtain annual written authorization from each member.

In effect, this bill defunds public-sector unions—like AFSCME, SEIU, the American Federation of Teachers and the National Education Association—by making the collection of member dues an onerous, costly task. With public-sector unions denatured, they would no longer be able to stand in the way of radical free marketeers who plan to profit from the privatization of public services.

Given the similarities between HB 1021 and a rash of like-minded bills in states across the country, including Wisconsin, on March 30 a public records request was sent to Dorworth’s office seeking copies of all documents pertaining to the writing of HB 1021, including copies of any pieces of model legislation the American Legislative Exchange Council (ALEC) may have provided.

Within an hour of submitting this request, Florida House Speaker Dean Cannon’s (R-Winter Park) Communications Director Katherine Betta responded: “We received a note from Representative Dorworth’s office regarding your request for records relating to the American Legislative Exchange Council and HB 1021. Please note that Mr. Dorworth’s legislative offices did not receive any materials from ALEC relating to this bill or any ‘model legislation’ from other states.”

But two weeks later Dorworth’s office delivered 87 pages of documents, mostly bill drafts and emails, detailing the evolution of what was to become HB 1021. Buried at the bottom of the stack was an 11-page bundle of neatly typed material, labeled “Paycheck Protection,” which consisted of three pieces of model legislation, with the words “Copyright, ALEC” at the end of each.

Dorworth legislative assistant Carolyn Johnson claims that, although Dorworth is an ALEC member, neither she nor her boss have any idea how the ALEC model legislation found its way into Dorworth’s office. Dorworth could not be reached for comment.

via Publicopoly Exposed — In These Times.

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McGuireWoods Lobbying for ‘Smart Card’ Maker Dynamics Inc.

Former Rep. L.F. Payne (D-Va.) of McGuireWoods Consulting is advocating for a smart payment card maker on debit card fees, according to a lobbying registration form submitted to Congress less than a week after changes to debit card transactions went into effect Oct. 1.

Payne, the president of McGuireWoods, is representing Cheswick, Pa.-based Dynamics Inc. with two other lobbyists from the firm. The trio is lobbying for the company on security issues, payment card technology and credit card fee legislation, in addition to the implementation of new debit card fees.

The Federal Reserve in June approved rules that lower the fees merchants pay for a customer’s debit card usage. Bank of America Corp. and other banks plan to add or already have added monthly charges for debit card users to help offset money lost by the rules, angering cardholders.

Dynamics, founded in 2007, announced this month that it has reached agreements to produce more than 1 million smart payment cards through 2012. The company’s products include cards that handle two accounts, provide password protection for payment card numbers and allow cardholders to use points or credit for purchases.

McGuireWoods Consulting is the only firm that has registered to lobby for Dynamics, congressional records show.

Neither Payne nor a Dynamics spokesman immediately responded to requests for comment.

via McGuireWoods Lobbying for ‘Smart Card’ Maker Dynamics Inc. – The BLT: The Blog of Legal Times.

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Not To Be Left Out, China Announces Its Own Bank And Stock Market Bail Out | ZeroHedge

To anyone still believing that capital markets around the world express something other than government policy, the latest news out of China may come as a surprise: “Beijing will buy more shares in China’s biggest banks, in an expression of support for the beleaguered stock market and most concrete state action to date to shore up confidence in the slowing economy.” The FT reports further: “Central Huijin, the domestic arm of China’s sovereign wealth fund, will buy the shares to help stabilise the pillars of the country’s financial system, the official Xinhua news agency said on Monday. Coming as the Chinese stock market closed at a 30-month low, the move was the strongest sign that Beijing wants to engineer a restoration of confidence in share prices and the economy. It paid instant dividends with a rally in the final minutes of trading on Monday.” And there you have it: stocks are now nothing more than a means for governments to validate their “success” in something, since they have no more control left over either employment or inflation, or public expression of affection with capitalism as per #OWS. So why not ramp up the DJIA to 36,000? Granted that will happen as all global currencies get terminally davalued against gold, but so what – after all that only thing that matters now is whose stock market is the biggest.

More:

Although Chinese growth has so far held up well, the European debt crisis and the risk of a double-dip recession in the US have cast a shadow over the country’s economy. With inflation running near three-year highs and debt levels swollen by heavy spending, economists doubt that Beijing could launch the kind of stimulus it did when the global financial crisis struck in 2008.

 

Sensing vulnerability, investors have turned against China, driving down commodity prices, betting on the chances of a government default and selling shares in the banks that are the economy’s lifeblood.

 

The government, through Huijin, is already the majority shareholder in all of the country’s major banks. While the announcement gave no details about how much more it intends to buy, it was unabashed in declaring that it aimed to halt the roughly 30 per cent slide in bank stocks in recent months.

 

In a rebuff to traders who have been betting that the renminbi will weaken as the Chinese economy slows, Beijing also allowed the currency to record its biggest one-day gain in years on Monday, letting it rise 0.6 per cent against the dollar.

 

The motivation for that also appeared to be diplomatic, with the US Senate set to vote on Tuesday on legislation that would punish China for keeping its currency undervalued.

And so on.

We could say “we told you so” but so what – at this point only the biggest idiots don’t realize that is the last ditch desperation manoeuvre to preserve social stability by keeping stock markets at a level that will prevent all out panic. Yes, someone will have to pay the piper at the end of the day because not even Keynes could have envisioned this kind of wholesale lunacy, but by then it will be “someone else’s problem.” For now – it is time to buy, buy, buy and, to those who listen to Berlusconi, create some market volatility.

via Not To Be Left Out, China Announces Its Own Bank And Stock Market Bail Out | ZeroHedge.

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Dexia bailout set as wider bank rescue mulled

BRUSSELS, Oct 9 (Reuters) – Franco-Belgian bank Dexia was set to be broken up and partly nationalised after being slammed by a funding squeeze in the latest warning sign about the health of Europe’s struggling lenders.

The rescue of Dexia, which has global credit risk exposure of $700 billion — more than twice Greece’s GDP — came as the leaders of French and Germany agreed in a joint press conference that European banks needed to be recapitalised, but papered over differences on how that would happen.

Details of the rescue were not revealed while Dexia’s board met in Brussels to approve the plan, but it will call for the bank’s Belgian retail unit and French municipal finance operations to come under government control.

Dexia was forced to seek state help for the second time in three years after a liquidity crunch hobbled the lender and sent its shares down 42 percent over the past week.

French Prime Minister Francois Fillon, his Belgian counterpart Yves Leterme and Luc Frieden, the finance minister of Luxembourg, where Dexia has a large presence, had found a solution for the stricken Franco-Belgian bank, Leterme’s office said early Sunday afternoon.

“The three governments have agreed to put a proposal to the board which fits completely with the goals of the Belgian government, which means to take over Dexia Bank Belgium, secure it and turn it into a very safe bank,” Leterme said after two hours of talks at Egmont Palace in Brussels — also the site of negotiations for a previous Dexia rescue in 2008.

At stake in the talks is how much each government will have to contribute to help wind down Dexia, a thorny subject given that Belgium and France are already struggling to contain large deficits.

The need to recapitalise banks is emerging as another strain for European governments whose budgets are already stretched. Belgium had a debt-to-gross domestic product ratio of 96.2 percent last year, lower only than Greece and Italy among euro zone members and on a par with bailout recipient Ireland.

“I am convinced that it is possible … by tomorrow morning to have an agreement in which Belgium resolves the issue without pushing up the debt level of our country too high,” Leterme told Belgian television before Sunday’s talks.

The burden of bailing out Dexia led ratings agency Moody’s to warn Belgium late on Friday that its Aa1 government bond ratings may fall.

Dexia, which used short-term funding to finance long-term lendings, has found credit drying up as the euro zone debt crisis worsened. This problem has been exacerbated by the bank’s heavy exposure to Greece.

Dexia’s near collapse stoked investors’ anxieties about the strength of European banks and coincided with growing talk about coordinated EU action to recapitalise banks across the continent.

Germany and France have so far been split over how to recapitalise shaky European banks. Paris wants to tap the euro zone’s 440 billion euro ($594 billion) European Financial Stability Facility (EFSF) to recapitalise French banks, while Berlin is insisting the fund should be used as a last resort.

There were fresh reports over the weekend that France’s top banks BNP Paribas and Societe Generale could agree to capital injections as part of a Europe-wide plan to boost lenders’ financial strength, although both banks continue to deny such plans.

Dexia’s overhaul will likely see its French municipal financing arm split from the group and merged with French state bank Caisse des Depots and Banque Postale, the French post office’s banking arm.

The Belgian government will nationalise Dexia’s largely retail banking business in Belgium. Media reports said it would have to pay 4 billion euros to do so.

Healthy units, such as Denizbank in Turkey, will be sold.

A ‘bad bank’ supported by state guarantees will hold 95 billion euros in bonds, including 12 billion euros of sovereign debt of weaker euro zone periphery nations.

Including 7 billion euros of securities linked to U.S. mortgages, France and Belgium may need to provide guarantees to cover up to 200 billion euros of assets, which would be more than 55 percent of Belgian GDP. Belgium, under an agreement reached between the governments on Sunday, will guarantee 60 percent of the bad assets while France will be responsible for most of the rest, sources familiar with the talks said.

The key issues are how to divide up the ‘bad bank’ asset guarantees, how much Belgium should pay to nationalise Dexia’s Belgian banking business and whether others, such as Belgium’s regions, would be involved in its purchase.

Dexia’s shares have been suspended since Thursday afternoon.

via UPDATE 5-Dexia bailout set as wider bank rescue mulled | Reuters.

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Little Banks vs. Big Banks

It has not been a good year for Bank of America. The enormous company is hemorrhaging cash, and has had to toss units good and bad overboard in an effort to repair its balance sheet. Its stock has cratered, and even Warren Buffett injecting $5 billion has done nothing to turn investors bullish.

And now it is enraging many customers by announcing a new $5 a month fee for using a debit card linked to a checking account. Hundreds of account holders vented online, on-camera, and just about everywhere else, many promising to close their accounts. Rep. Brad Miller, D-N.C., swiftly introduced a bill preventing big banks from charging fees on anyone wanting to close their accounts. Even President Barack Obama chimed in, telling George Stephanopolous, “You don’t have some inherent right just to get a certain amount of profit, if your customers are being mistreated.”

via Bank of America debit-card-fee debacle: why more Americans should be banking at small banks. – Slate Magazine.

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SWAT Teams in St. Louis Protecting Bank of America; Refusing Customer Withdrawals – (VIDEO)

SWAT Teams in St. Louis Protecting Bank of America; Refusing Customer Withdrawals

via SWAT Teams in St. Louis Protecting Bank of America; Refusing Customer Withdrawals – YouTube.

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Occupy Wall Street Protests Spread Nationwide – ABC News

Occupy Wall Street is sparking spinoffs with protests taking place today in Los Angeles, Phildadelphia and Washington D.C.

In Los Angeles, protesters occupied a Bank of America building and were arrested.

The demonstrators have also taken to picketing the residence of a bank executive, according to The Los Angeles Times.

via Occupy Wall Street Protests Spread Nationwide – ABC News.

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