Greg Smith

Why I Am Leaving Goldman Sachs
The New York Times, Op-Ed
By GREG SMITH
March 14, 2012

TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

Read more here    See related stories and video below

David Stockman

David Stockman on Crony Capitalism
Bill Moyers & Company
March 9, 2012

Moyers & Company explores the tight connection between Wall Street and the White House with David Stockman, former budget director for President Reagan.

Now a businessman who says he was "taken to the woodshed" for telling the truth about the administration’s tax policies, Stockman speaks candidly with Bill Moyers about how money dominates politics, distorting free markets and endangering democracy. "As a result," Stockman says, "we have neither capitalism nor democracy. We have crony capitalism."

Stockman shares details on how the courtship of politics and high finance have turned our economy into a private club that rewards the super-rich and corporations, leaving average Americans wondering how it could happen and who’s really in charge.

"We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward," Stockman tells Moyers. Read more here

Gretchen Morgenson

Gretchen Morgenson on Corporate Clout in Washington
Bill Moyers & Company
March 9, 2012

Moyers talks with Pulitzer Prize-winning New York Times reporter and columnist Gretchen Morgenson on how money and political clout enable industries to escape regulation and ensure high compensation for executives at the top. Read more here

NICHOLAS KRISTOF

Is Banking Bad?
The New York Times
By NICHOLAS D. KRISTOF
January 18, 2012

When I spoke at Swarthmore College recently, I was startled by one question: Is it immoral for students to seek banking jobs?

The corollary question, with Mitt Romney’s business career under attack even by staunch Republicans, is this: Is it unethical to make millions in private equity?

My answer to both questions: no.

I’ve been sympathetic to the Occupy Wall Street movement, but, look, finance is not evil. Banking has contributed immensely to modern civilization. By allocating capital to more efficient uses, banking laid the groundwork for the industrial revolution and the information revolution.

Likewise, the attacks on private equity seem over the top. Private equity firms like Bain Capital, where Romney worked, aren’t about destroying companies and picking over the carcasses. Rather, the aim is to acquire poorly managed companies, make them more efficient (sometimes by firing people but often by rejiggering the business model) and then resell them at a profit. That’s the merciless, rugged nature of capitalism.

Liberals should also be wary of self-selecting out of certain occupations. After Vietnam and revelations of C.I.A. abuses in the 1970s, many university students avoided the military and the intelligence agencies. So slots were filled disproportionately by ideological conservatives in a way that undermined everyone’s interests. We would have been better off if more Swarthmore idealists had become generals and C.I.A. officers — and we may be better off if some idealists become bankers as well.

Now for my caveats. Read more here

In Aftermath of Financial Crisis, Who's Being Held Responsible?
PBS News Hour
by Ray Suarez
November 24, 2011

As anger over the financial crisis lingers, questions remain as to who has been held accountable for their role in creating the conditions that led to the meltdown ... and who has not. Ray Suarez reports. Read more here

Kyle Bass Destroys The Ponzi-Prone Debt Sustainability Arguments Of The Status Quo

Zero Hedge
November 20, 2011

Another noteworthy Kyle Bass moment as he discusses debt sustainability among major global sovereign nations. Simply and proficiently, the hedge fund manager describes how a dwindling current account surplus in Japan, US welfare economics, and the peripheral-to-core European stressors are all Madoff-like and unsustainable. Switching from broad-brush terms to the idiosyncratic complexities of each region, Bass offers his inimitable take - in a mere six minutes - on how the status quo is quivering under its own self-deception. His rightful conclusions remain extremely worrisome and should be required reading/watching for every central banker and politician trying to keep the dream alive. Read more here

3 Months After The MF Global Bankruptcy, We Find That $1.2 Billion (Or More) In Client Money Has "Vaporized"
Zero Hedge
by Tyler Durden
January 29, 2012

On the three month bankruptcy anniversary of the company whose rehypothecation gimmicks will one day be seen as a harbinger of everything that is  broken with the multi-trillion ponzi system, but not just yet despite loud warnings otherwise, we are getting close to a final verdict of where the $1.2 billion (and possibly more as originally predicted by Zero Hedge - see below) in commingled client money may have gone. Note the use of the passive voice because using the active, as in money that MF Global executives stole from clients, is prohibited in a legal system in which nobody goes to jail for something as modest as $1.2 billion in theft. That verdict? "Vaporized." No really (and yes, in the passive voice of course). From the WSJ: "As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation." Uh huh... Because money simply vaporizes. Read more here

Insight: Anger rises as MF Global clients see billions frozen
Reuters
by David Sheppard and Jeanine Prezioso
November 20, 2011

(Reuters) - Three weeks after MF Global's collapse, furious former customers are still fighting for access to billions of dollars as they question why as much as two-thirds of their money is still frozen.

While authorities have touted the fact that they are returning 60 percent of the collateral and cash that had been frozen in the wake of the broker's October 31 bankruptcy, a closer look shows that in fact only about 40 percent of customers' total funds have been authorized for release so far.

The remainder, more than $3 billion, ostensibly remains on hand to cover a shortfall originally estimated by MF Global to regulators at just $600 million.

Because the bankruptcy trustee, regulators and exchanges have made no comment on the missing funds in weeks -- and have given no information as to how much cash they are retaining -- customers are left guessing exactly how much might end up in the creditors' process of the bankruptcy. Read more here

MF Global May Have Used Customer Funds In The Losing $6.3 Billion Trade Without Informing Clients
by Robert Lenzner
November 8, 2011

After an intense day of investigation, I have just discovered that a CFTC rule(1.29) allowed Jon Corzine’s MF Global to use the margin and cash in customers heretofore segregated accounts to amass a risky $6.3 billion investment in European sovereign debt that backfired. Nor did Corzine have the obligation to inform any of these customers he was gambling with their money. Or that he was intending to keep all the profits for himself and his troubled firm. Nothing for the customers.

The language of Rule1.29 allows "The investment of customer funds in instruments described in 1.29 shall not prevent the futures commission merchant (MF Global) or clearing organization so investing such funds and retaining as its own any increment or interest resulting therefrom." Increment refers to any trading profits or gains. Read more here

Warren

Elizabeth Warren Out as Possible Head of Consumer Financial Protection Bureau
Naked Capitalism
by Yves Smith
July 16, 2011

We have said for some time Warren was not going to get head the new consumer financial protection agency. Obama was not willing to ruffle the banks, and Geithner, who is is most powerful Cabinet member, would not stand for it). Nevertheless, we are disappointed by this outcome. And it seems a bit churlish for this news to be leaked the day after she ran the gauntlet with the House Oversight Panel. From Bloomberg:

President Barack Obama has chosen a candidate other than Elizabeth Warren as director of the new Consumer Financial Protection Bureau, according to a person briefed on the matter.
The president’s choice is a person who already works at the consumer agency, the person said today. Obama may make the nomination as soon as next week, another person briefed on the administration’s plans said.

The choice is presumably Raj Date, a former McKinsey staffer and banking industry executive (Capital One and Deutsche Banka) whose name was floated a month ago. Read more here

Zero Hedge

Zero Hedge on Wikipedia

The Dow Zero Insurgency
New York Magazine
by Joe Hagan
September 27, 2009

The nothing-can-be-believed chaos of the financial crisis created a golden opportunity for a blog run by a mysterious ex-hedge-funder with a dodgy past and conspiracy theories to burn.

Last spring, in a far corner of the Internet, an unknown blogger began to piece together a conspiracy theory: The investment bank Goldman Sachs was using sophisticated, high-speed computers to siphon hundreds of millions of dollars in illegitimate trading profits from the New York Stock Exchange, invisibly undercutting the market and sidestepping the regulatory reach of the Securities and Exchange Commission.

Only a few loyal readers paid attention to the blog called Zero Hedge, a no-frills site full of arcane analysis decipherable only by finance professionals. But when a former Goldman Sachs computer programmer was arrested for allegedly stealing software codes used for the firm’s electronic trading arm, and a federal prosecutor was quoted saying the codes could be used to "manipulate markets in unfair ways," the once-obscure blog ignited a chain reaction. While on a golf outing, an editor at the New York Times learned from a friend who worked on Wall Street that the Zero Hedge allegation was the talk of the industry, and an assignment ensued. On July 24, the Times published a front-page article on so-called high-frequency trading and its potential abuses, which in turn prompted Chuck Schumer, a member of the Senate Finance Committee, to draft a letter to the SEC that same day. Twelve days later, the SEC signaled that it was considering a ban on the very computerized trading that Zero Hedge had attacked. Read more here

S&P Downgrades US To AA+, Outlook Negative - Full Text
Zero Hedge
by Tyler Durden
August 5, 2011

United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative

We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.

We have also removed both the short- and long-term ratings from CreditWatch negative. The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics. Read more here

Standard & Poors

Link to S&P's announcement of US credit rating downgrade

With offices in 23 countries and a history that dates back more than 150 years, Standard & Poor’s is known to investors worldwide as a leader of financial- market intelligence.

Today Standard & Poor’s strives to provide investors who want to make better informed investment decisions with market intelligence in the form of credit ratings, indices, investment research and risk evaluations and solutions.

Most notably, we are known as an independent provider of credit ratings. In 2009, we published more than 870,000 new and revised credits ratings. Currently, we rate more than US$32 trillion in outstanding debt. Read more here

Dagong Global Credit Rating

Dagong Global Credit Rating Co. Ltd. (hereinafter referred to as "Dagong") is a specialized credit rating and risk analysis research institution founded in 1994 upon the joint approval of People‘s Bank of China and the former State Economic & Trade Commission,  People’s Republic of China, and is also a key credit information and credit solution service provider in China. Read more here

As Wall St. Polices Itself, Prosecutors Use Softer Approach
The New York Times
by Gretchen Morgenson and Louise Story
July 7, 2011

As the financial storm brewed in the summer of 2008 and institutions feared for their survival, a bit of good news bubbled through large banks and the law firms that defend them.

Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis. Read more here

Quantitative Easing Wikipedia 

Quantitative easing (QE) is an unconventional monetary policy tool used by some central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank implements quantitative easing by purchasing financial assets from banks and other private sector businesses with new money that it creates electronically. This action increases the excess reserves of the banks, and also raises the prices of the financial assets bought, which lowers their yield. Read more here

The Money Masters

Do you know that only one zip code in this country spends nearly half of all the special interest lobbying money used to influence Congress? Guess what that zip code is? It’s 10036, the upper east side of Manhattan. That’s where the Mayor of New York City lives. That’s where the Wall Street bankers live. They control the money, they control the mass media, they control Congress. They get the bailouts – other Americans get the bill (in higher taxes to pay the ever-growing interest on the National debt, and in fewer services). Read more on The Money Masters

Having private banks create money is the root economic cause of world poverty, ignorance, hunger, and much preventable disease – the concentration of the world’s money in fewer and fewer hands and the accompanying impoverishment of billions of our fellow human beings, 1/3rd of whom make less that $2 a day, over 1/2 in abject poverty while a couple of hundred men grow fabulously richer daily. Until the money creation power is restored to the people – to their government and taken back from the bankers - we will never be able to make a dent in these other economic issues. We can fix this. We can fix it in a matter of months — a year at most – if we have the will. Read more here

The Money Masters - Wikipedia 

The Money Masters is a 1996 documentary film produced by attorney Patrick S. J. Carmack and directed and narrated by William T. Still. It discusses the concepts of money, debt and taxes, and describes their development from biblical times onward. It covers the history of fractional-reserve banking, central banking, monetary policy, the bond market, and the Federal Reserve System in the United States. The film is widely available online. Read more here

US Senator Carl Levin

Naming Culprits in the Financial Crisis
The New York Times
Gretchen Morgenson

Louise Story
April 13, 2011

A voluminous report on the financial crisis by the United States Senate — citing internal documents and private communications of bank executives, regulators, credit ratings agencies and investors — describes business practices that were rife with conflicts during the mortgage mania and reckless activities that were ignored inside the banks and among their federal regulators.

The 650-page report, "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse," was released Wednesday by the Senate Permanent Subcommittee on Investigations, whose cochairmen are Carl Levin, a Michigan Democrat, and Tom Coburn, a Republican of Oklahoma. The result of two years’ work, the report focuses on an array of institutions with central roles in
the mortgage crisis: Washington Mutual, an aggressive mortgage lender that collapsed in 2008; the Office of Thrift Supervision, a regulator; the credit ratings agencies Standard & Poor’s and
Moody’s Investors Service; and the investment banks Goldman Sachs and Deutsche Bank.

"The report pulls back the curtain on shoddy, risky, deceptive practices on the part of a lot of major financial institutions," Mr. Levin said in an interview. "The overwhelming evidence is
that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest."

Read more here

The Financial Crisis Inquiry Commission

The Financial Crisis Inquiry Commission determined that the 2008 financial crisis was an "avoidable" disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to a story in the New York Times January 25, 2011 ‘Financial Crisis Was Avoidable, Inquiry Finds’. The Times wrote "[T]he report is harsh on regulators. It finds that the Securities and Exchange Commission failed to require big banks to hold more capital to cushion potential losses and halt risky practices, and that the Fed "neglected its mission."

Credit Segregation Report, February 2011
NATIONAL PEOPLE’S ACTION

Three years into the massive financial crisis, the economic fallout has clearly not impacted all areas of the nation equally. As this report documents, sharp racial divides exist in terms of the prevalence of mainstream, wealthbuilding credit and the availability of high-priced, subprime loan products such as "payday" loans. This report examines the recent availability of consumer credit in African-American and Latino communities in five major Midwestern metropolitan areas: Chicago, IL, Detroit, MI, Kansas City, MO-KS, Peoria, IL, and St. Louis MO-IL. This report focuses on two consumer loan products at the opposite ends of the credit spectrum: home mortgage refinance loans and cash advance or payday loans. Together the disparate availability of these products paints a disturbing picture of consumer credit conditions in the areas where most African-Americans and Latinos live during this third year of financial crisis. Read more here

See how lawyers, bankers and regulators wrecked the economy in 2008

Bank regulation in the United States

From Wikipedia, the free encyclopedia

Bank regulation in the United States is highly fragmented compared with other G10 countries, where most countries have only one bank regulator. In the U.S., banking is regulated at both the federal and state level. Depending on the type of charter a banking organization has and on its organizational structure, it may be subject to numerous federal and state banking regulations. Unlike Japan and the United Kingdom (where regulatory authority over the banking, securities and insurance industries is combined into one single financial-service agency), the U.S. maintains separate securities, commodities, and insurance regulatory agencies - separate from the bank regulatory agencies - at the federal and state level. Read more here

Joe Nocera

Letting the Banks Off the Hook
The New York Times
By JOE NOCERA
April 18, 2011

Judging by last week’s performance, it sure looks as though the country’s top bank regulator is back to its old tricks.

Though, to be honest, calling the Office of the Comptroller of the Currency a "regulator" is almost laughable. The Environmental Protection Agency is a regulator. The O.C.C. is a coddler, a protector, an outright enabler of the institutions it oversees.

Back during the subprime bubble, for instance, it was so eager to please its "clients" — yes, that’s how O.C.C. executives used to describe the banks — that it steamrolled anyone who tried to stop lending abuses. States and cities around the country would pass laws requiring consumer-friendly measures such as mandatory counseling for subprime borrowers, or the listing of the fees the banks were going to charge for the loan. The O.C.C. would then use its power to either block or roll back the legislation.

It relied on the doctrine of pre-emption, which holds, in essence, that federal rules pre-empt state laws. More than 20 times, states and municipalities passed laws aimed at making subprime loans less predatory; every time, the O.C.C. ruled that national banks were exempt. Which, of course, rendered the new laws moot. Read more here

Florida Office of Financial Regulation

The mission of the Florida Office of Financial Regulation is to protect the citizens of Florida by carrying out the banking, securities and financial laws of the state efficiently and effectively and to provide regulation of business that promotes the sound growth and development of Florida’s economy. Read more here

Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system by:
Insuring deposits, Examining and supervising financial institutions for safety and soundness and consumer protection, and Managing receiverships. Read more about the FDIC

FDIC on Wikipedia

The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass-Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. As of November 18, 2010, the FDIC insures deposits at 7,723 institutions. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks). Read more on Wikipedia

Office of Comptroller of the Currency (OCC)

The OCC's primary mission is to charter, regulate, and supervise all national banks. We supervise the federal branches and agencies of foreign banks. Our goal in supervising banks is to ensure that they operate in a safe and sound manner and in compliance with laws requiring fair treatment of their customers and fair access to credit and financial products. Read more about the OCC

OCC on Wikipedia

Headquartered in Washington, D.C., the OCC has four district offices located in New York City, Chicago, Dallas and Denver. It has an additional 48 field offices throughout the United States, and a London office to supervise the international activities of national banks. It is an independent bureau of the United States Treasury and is headed by the Comptroller of the Currency.

Read more on Wikipedia

Securities and Exchange Commission (SEC)

The SEC is responsible for administering seven major laws that govern the securities industry. They are: the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and most recently, the Credit Rating Agency Reform Act of 2006.

The SEC was established by the United States Congress in 1934 as an independent, quasi-judicial regulatory agency during the Great Depression that followed the Crash of 1929. The main reason for the creation of the SEC was to regulate the stock market and prevent corporate abuses relating to the offering and sale of securities and corporate reporting. The SEC was given the power to license and regulate stock exchanges, the companies whose securities traded on them, and the brokers and dealers who conducted the trading.

U.S. Securities and Exchange Commission
From Wikipedia, the free encyclopedia

Left: U.S. Securities and Exchange Commission headquarters in Washington, D.C.

The U.S. Securities and Exchange Commission (frequently abbreviated SEC) is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States. In addition to the 1934 Act that created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and other statutes. The SEC was created by section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. § 78d (http://www.law.cornell.edu/uscode/15/78d.html) and commonly referred to as the 1934 Act).

Commission members

The Securities and Exchange Commission has five Commissioners who are appointed by the President of the United States with the advice and consent of the Senate. No more than three can be from a single political party. Each commissioner serves a five-year term, which are staggered so that one commissioner's term ends on June 5 of each year. Currently the SEC commissioners are chairman Mary L. Schapiro (D), Kathleen L. Casey (R), Elisse B. Walter (D), Luis A. Aguilar (D) and Troy A. Paredes (R). Read more here

SEC probing fraud at U.S.-listed foreign companies By Sarah N. Lynch, April 4, 2011

WASHINGTON (Reuters) - Securities regulators are probing Chinese and other foreign companies with questionable accounting practices that have used backdoor methods to access U.S. capital markets, a top regulator said on Monday.

"In recent years we have seen a spike in private companies merging with a public shell company as a way of going public," said Luis Aguilar, a commissioner at the U.S. Securities and Exchange Commission. "While it is Chinese companies that have grabbed recent headlines, the problems coming to the forefront would not necessarily be limited to companies based in China," he said.

Aguilar added that while the majority of these may be legitimate businesses, "a growing number of them are proving to have significant accounting deficiencies or being vessels of outright fraud." Aguilar was speaking to the Council of Institutional Investors spring gathering on Monday about a growing trend that has caused alarm at the SEC and led to trading suspensions and other enforcement actions. Read more here

Office of Thrift Supervision (OTS)

Mission Statement

To supervise savings associations and their holding companies in order to maintain their safety and soundness and compliance with consumer laws, and to encourage a competitive industry that meets America's financial services needs.

Comly Rich house

In early 1831, three town leaders in Frankford, Pennsylvania, outside of Philadelphia, met in a local tavern to plan how local townspeople could pool their money to accomplish together what they lacked the financial resources to do alone—buy their own homes. In doing so, they established the nation’s first savings association, the Oxford Provident Building Association, modeled after mutual building societies in England. Each member paid an initial fee of $5 per share and $3 per month thereafter. As their savings grew, association members were able to finance their American dream of homeownership. The association provided its first mortgage in April 1831 to a local lamplighter named Comly Rich, who obtained a loan for a $375 home that still stands on Orchard Street in Philadelphia County, Pennsylvania. Read more here

Office of Thrift Supervision
From Wikipedia, the free encyclopedia

The Office of Thrift Supervision (OTS) is a United States federal agency under the Department of the Treasury. It was created in 1989 as a renamed version of another federal agency (that was faulted for its role in the Savings and loan crisis). Like other US federal bank regulators, it is paid by the banks it regulates. The OTS was initially seen as an aggressive regulator, but was later lax. Declining revenues and staff led the OTS to market itself to companies as a lax regulator in order to get revenue.

The OTS also expanded its oversight to companies that were not banks. Some of the companies that failed under OTS supervision during the Financial crisis of 2007–2010 include American International Group (AIG), Washington Mutual, and IndyMac.

The OTS was implicated in a backdating scandal regarding the balance sheet of IndyMac. Reform proposals from Henry Paulson, Barack Obama, and the U.S. Congress have all proposed to merge the OTS with the Office of the Comptroller of the Currency.

Florida Bank's Collapse To Cost FDIC $4.9B

CBS News Business
Washington
May 22, 2009

BankUnited FSB Seized By Feds After Posting $1.2B In Losses; 2nd Largest Hit To FDIC Of Financial Crisis

(CBS/AP)  The federal seizure of struggling Florida thrift BankUnited FSB is expected to cost the Federal Deposit Insurance Corp. $4.9 billion, representing the second-largest hit to the FDIC's insurance fund since the financial crisis began felling banks last year.

The costliest was last year's seizure of California lender IndyMac Bank, on which the bank insurance fund is estimated to have lost $10.7 billion.

The Office of Thrift Supervision, a Treasury Department agency, said Thursday that BankUnited FSB reported $1.2 billion in losses last year as defaults on loans piled up. The thrift "was critically undercapitalized and in an unsafe condition to conduct business," the agency said in a statement.

Coral Gables, Fla.-based BankUnited FSB is the 34th federally insured institution to be closed this year, and the biggest. Florida's largest banking institution with about $13 billion in assets as of May 2 was sold for $900 million to an investor group led by former North Fork Bancorp Chairman and CEO John Kanas. It will reopen as a newly chartered savings bank called BankUnited on Friday, with Kanas at the helm.

The investor group includes several prominent firms: the Blackstone Group, the Carlyle Group, Centerbridge Partners and WL Ross & Co., the private-equity firm run by billionaire investor Wilbur Ross.

The new bank will assume $12.7 billion in assets and $8.3 billion of its total $8.6 billion in deposits. In addition, the FDIC and the new bank agreed to share losses on about $10.7 billion in assets.

Read more here

The Federal Reserve

Today the Federal Reserve’s duties fall into four general areas:

1. Conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employ-ment, stable prices, and moderate long-term interest rates.

2. Supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers.

3. Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.

4. Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system.
Read more about the Federal Reserve

The Creature from Jekyll Island : A Second Look at the Federal Reserve
G. Edward Griffin, Author

Where does money come from? Where does it go? Who makes it? The money magicians' secrets are unveiled. We get a close look at their mirrors and smoke machines, their pulleys, cogs, and wheels that create the grand illusion called money. A dry and boring subject? Just wait!

You'll be hooked in five minutes. Reads like a detective story - which it really is. But it's all true. This book is about the most blatant scam of all history. It's all here: the cause of wars, boom-bust cycles, inflation, depression, prosperity.

Creature from Jekyll Island is a "must read." Your world view will definitely change. You'll never trust a politician again - or a banker.

A History of the Federal Reserve, Volume 2, Book 1, 1951-1969
A History of the Federal Reserve, Volume 2, Book 2, 1970-1986

Allan H. Meltzer, Author

Allan H. Meltzer’s critically acclaimed history of the Federal Reserve is the most ambitious, most intensive, and most revealing investigation of the subject ever conducted. Its first volume, published to widespread critical acclaim in 2003, spanned the period from the institution’s founding in 1913 to the restoration of its independence in 1951. This two-part second volume of the history chronicles the evolution and development of this institution from the Treasury–Federal Reserve accord in 1951 to the mid-1980s, when the great inflation ended. It reveals the inner workings of the Fed during a period of rapid and extensive change. An epilogue discusses the role of the Fed in resolving our current economic crisis and the needed reforms of the financial system.

Read more on Amazon.com

End the Fed - Ron Paul, Author

Publisher Comments: During the 2008 presidential campaign, over 4,000 students gathered at the University of Michigan to hear Republican Party candidate Ron Paul speak. As he began to address the topics of monetary policy and the coming depression, a chant came from the crowd, End the Fed End the Fed As dollar bills were lit on fire and thrown into the night skies, it became clearer than ever that the real problem, one that nobody in the media was talking about, was the central bank-an unconstitutional entity and a political, economic, and moral disaster.

Most people think of the Federal Reserve as an institution that has always been there (it hasn't) and isn't going anywhere. But in END THE FED, Ron Paul draws on American history, economics, and fascinating stories from his own long political life to argue that the Federal Reserve is both corrupt and unconstitutional. It is inflating currency today at nearly a Weimar or Zimbabwe level, a practice that threatens to put us into an inflationary depression where $100 bills are worthless. What most people don't realize is that the Fed — created by the Morgans and Rockefellers at a private club off the coast of Georgia — is actually working against their own personal interests. Ron Paul's urgent appeal to all citizens and officials tells us where we went wrong and what we need to do fix America's economic policy for future generations.

Hachette Book Group (Grand Central Publishing)

Powell’s Books

Amazon.com

BookTV: End the Fed, Ron Paul
C-Span2 September 18, 2009
Valley Forge Convention Center
King of Prussia, PA

Representative Ron Paul talked about his book, End the Fed (Grand Central Publishing; September 16, 2009). In the book, Representative Paul looks at the history of the Federal Reserve and argues that the institution should be held accountable for the economic crisis being experienced by Americans. He responded to questions from members of the audience.

Prepresentative Paul spoke at a breakfast event on Friday, September 18, 2009, at the Northeast Regional Conference of the Campaign for Liberty, an organization for which Dr. Paul is honorary chairman. The conference was held at the Valley Forge Convention Center in King of Prussia, Pennsylvania.

Ron Paul, a physician, has represented Texas' 14th congressional district for 11 terms. He is the author of The Revolution: A Manifesto. Read more here

End the Fed? Ron Paul Is Wrong for All the Right Reasons: Books
Bloomberg
by James Pressley
September 17, 2009

Sept. 17 (Bloomberg) -- "The bank is trying to kill me," President Andrew Jackson declared. "But I will kill it!"

And throttle it he did, thwarting a bid by the second Bank of the United States to extend its charter beyond 1836. The U.S. would go without a central bank until the Federal Reserve System was established in 1913.

A battle over the place and power of a central bank in America has rumbled throughout U.S. history, pitting capitalists against populists who feared the wealthy few would hog power and crush liberty. The skirmishing has resurfaced amid our own credit crackup, with book after book faulting the Federal Reserve for allowing Americans to run up some $34 trillion in domestic non-financial debt.

Can the Fed be fixed? Don’t bother, writes U.S. Congressman Ron Paul in "End the Fed," a blistering libertarian broadside from a firm believer in Austrian economics.

Can the Fed be fixed? Don’t bother, writes U.S. Congressman Ron Paul in "End the Fed," a blistering libertarian broadside from a firm believer in Austrian economics.

Paul, a Republican from Texas, wants to abolish the Fed, freeze the money stock, and reintroduce a gold standard. His book lays out his arguments in blunt rhetoric pitched to the surly mood of an understandably disillusioned electorate. He attributes his title to a catchphrase he heard University of Michigan students chanting in October 2007.

"All around the country, people are gathering outside Federal Reserve buildings to protest against the power, secrecy and operations of the Fed, and chanting this great slogan," he writes. "Their goal is not reform but revolution."

Many of Paul’s assertions ring true. Inflation amounts to taxation, he says. Correct. Central bankers are central economic planners, he asserts. Absolutely. Wall Street likes "privatized profits and socialized losses." No surprise there. He’s right, yet draws the wrong conclusions.

Utopian Promises

Like many clever politicians, Paul has a knack for mixing sound observations with Utopian promises. Without the Fed, he says, we would enjoy "all the privileges of modern economic life without the downside of business cycles, bubbles, inflation, unsustainable trade imbalances and the explosive growth of the government that the Fed has fostered."

No wonder the jacket carries a written endorsement from folkie Arlo Guthrie, who says the book has "decisively changed my mind."

Hold on, though. Wasn’t America’s Fed-less 19th-century history punctuated with recurring booms, busts and banking panics? Paul dismisses such talk.

"Most of the tales of 19th-century banking are mythical," he says, blaming the upheavals on government meddling.

Paul’s position is that commercial banks should again be subjected to the full blast of the free market, like any other business. Central banks, in this view, make markets inefficient.

Inefficient Markets

There are two snags. The first is that financial markets aren’t as efficient as economic theorists have hypothesized. If you don’t believe me, read Justin Fox’s history, "The Myth of the Rational Market" (HarperBusiness).

The other hitch is that banks play a unique role in society -- a role that even Adam Smith recognized, as Henry Kaufman writes in "The Road to Financial Reformation" (Wiley).

"The great champion of laissez-faire recognized the special character of banks as custodians of wealth, and the risks to society if they are left in irresponsible hands," says Kaufman, a former Salomon Brothers Inc. managing director.

If we’re stuck with the Fed, we had better find a way to fix it. And that means understanding the muddled thinking that underpins central-banking decisions, as George Cooper has explained in "The Origin of Financial Crises" (Vintage).

Schizophrenic Fed

Cooper, a fixed-income fund manager at BlueCrest Capital Management Ltd. in London, argues that central bankers are schizophrenic. When the economy is bubbling, they behave like Friedmanites, leaving the market to do its thing. Come a slowdown, though, they turn Keynesian, rushing to stimulate the economy with rate cuts. That’s how the Fed allowed excess credit to build up, cycle after cycle, inflating asset prices into what George Soros calls a "super bubble."

Cooper’s solution: Oblige central banks to prick such bubbles by occasionally withdrawing liquidity from the market in what he calls "fire drills."

This is unlikely to satisfy Paul, who deplores the "scoundrels at the Fed." So perhaps he should reflect on the Panic of 1907, which ultimately led to the Fed’s founding.

When massive gold shipments drained into the U.S. from London after the San Francisco earthquake of 1906, the Bank of England moved to stanch the outflow by raising its benchmark interest rate to 6 percent from 3.5 percent, as Barry Ritholtz of research firm FusionIQ writes in "Bailout Nation" (Wiley). Other European banks followed suit.

To Ritholtz, the moral is clear:

"Unless all nations agree to do so simultaneously, the dissolving of a central bank amounts to the economic equivalent of unilateral disarmament."

"End the Fed" is from Grand Central (212 pages, $21.99).

(James Pressley writes for Bloomberg News. The opinions expressed are his own.)

To contact the writer on the story: James Pressley in Brussels at jpressley@bloomberg.net.

To contact the editor responsible for this story: Mark Beech at mbeech@bloomberg.net.

Pres. John F. Kennedy

Debt-Free United States Notes Were Once Issued Under JFK And The U.S. Government Still Has The Power To Issue Debt-Free Money
The Economic Collapse Blog
by Michael T. Snyder, Esq.
December 19, 2011

Most Americans have no idea that the U.S. government once issued debt-free money directly into circulation.  America once thrived under a debt-free monetary system, and we can do it again.  The truth is that the United States is a sovereign nation and it does not need to borrow money from anyone.  Back in the days of JFK, Federal Reserve Notes were not the only currency in circulation.  Under JFK (at at various other times), a limited number of debt-free United States Notes were issued by the U.S. Treasury and spent by the U.S. government without any new debt being created.  In fact, each bill said "United States Note" right at the top.  Unfortunately, United States Notes are not being issued today.  If you stop right now and pull a dollar out of your wallet, what does it say right at the top?  It says "Federal Reserve Note".  Normally, the way our current system works is that whenever more Federal Reserve Notes are created more debt is also created.  This debt-based monetary system is systematically destroying the wealth of this nation.  But it does not have to be this way.  The truth is that the U.S. government still has the power under the U.S. Constitution to issue debt-free money, and we need to educate the American people about this. Read more here

US $2 Silver Certificate

JFK's Executive Order 11100 Abolishing the Federal Reserve

by John P. Curran

September 2, 2010

"Article 1, Section 8 of the US Constitution specifically says that Congress is the only body that can "coin money and regulate the value thereof." The US Constitution has never been amended to allow anyone other than Congress to coin and regulate currency. So what’s the Federal Reserve?

In 1910 Senator Nelson Aldrich, then Chairman of the National Monetary Commission, in collusion with representatives of the European central banks, devised a plan to pressure and deceive Congress into enacting legislation that would covertly establish a private central bank. This bank would assume control over the American economy by controlling the issuance of its money. After a huge public relations campaign, engineered by the foreign central banks, the Federal Reserve Act of 1913 was slipped through Congress during the Christmas recess, with many members of the Congress absent. President Woodrow Wilson, pressured by his political and financial backers, signed it on December 23, 1913. The act created the Federal Reserve System, a name carefully selected and designed to deceive. "Federal" would lead one to believe that this is a government organization. "Reserve" would lead one to believe that the currency is being backed by gold and silver. "System" was used in lieu of the word "bank" so that one would not conclude that a new central bank had been created. Read more here and at JFK Vs The Federal Reserve

US $2 Silver Certificate

President John F. Kennedy, The Federal Reserve And Executive Order 11110
by Cedric X
From The Final Call, Vol. 15, No.6, January 17, 1996

On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.

With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificats were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything. Executive Order 11110 could have prevented the national debt from reaching its current level, because it would have given the gevernment the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver.

After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued. Read more here

Pres. John F. Kennedy

Executive Order 11110
From Wikipedia, the free encyclopedia


Executive Order 11110 was issued by U.S. President John F. Kennedy on June 4, 1963. This executive order delegated to the Secretary of the Treasury the president's authority to issue silver certificates under the Thomas Amendment of the Agricultural Adjustment Act.

President Kennedy's Executive Order (E.O.) 11110 modified the pre-existing Executive Order 10289 issued by U.S. President Harry S. Truman in 1951, and stated the following:

    "The Secretary of the Treasury is hereby designated and empowered to perform the following-described functions of the President without the approval, ratification, or other action of the President..."

The order then lists tasks (a) through (h) which the Secretary may now do without instruction from the President. None of the powers assigned to the Treasury in E.O. 10289 relate to money or to monetary policy. Kennedy's E.O. 11110 then instructs that:

    SECTION 1. Executive Order No. 10289 of September 9, 1951, as amended, is hereby further amended (a) By adding at the end of paragraph 1 thereof the following subparagraph (j):

    '(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of an outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption,' and (b) By revoking subparagraphs (b) and (c) of paragraph 2 thereof.

    SECTION 2. The amendments made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.

John F. Kennedy, THE WHITE HOUSE, June 4, 1963.

Executive Order 11110 is quite infamous among conspiracy theorists, such as Jim Marrs, author of the 1989 book Crossfire: The Plot that Killed Kennedy, who speculate that there is a link between the John F. Kennedy assassination and E.O. 11110 by arguing that the Federal Reserve Board was involved in the murder to protect its power over the monetary policy of the United States. Read more here

Crossfire: The Plot That Killed Kennedy

Jim Marrs, Author

Twenty-five years after the event, assassination books continue to appear. Marrs, a Dallas-area journalist who teaches a college course on the event, has, however, produced a special one. Its nearly 600 pages are jammed with detail on every aspect of the shooting, the investigations, the suspicions that fell on the Mafia, the FBI, the CIA, anti-Castro Cubans--all the usual suspects. For its comprehensiveness alone, this would be the one book for anyone seeking a really thorough examination of the assassination (but it sorely needs an index). Marrs is sensible and straightforward, giving every side of disputed questions, though it is clear that for him, as for most thoughtful people, the Warren Commission's picture of Oswald as a lone assassin doesn't work. The author talked to witnesses never officially interviewed, even offers never-before-seen pictures (though these contain nothing very startling). His conclusion: Kennedy made so many enemies in business, the military, the right wing, the mob, that his death became inevitable. He sees no Washington-based assassination plot, simply a willingness at the highest level (specifically Lyndon Johnson and J. Edgar Hoover) to relax protective vigilance enough to allow the deed to be done. Reed Business Information, Inc. Read more here

Bretton Woods system
From Wikipedia, the free encyclopedia

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states in the mid 20th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states.

Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference. The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944.

Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group. These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.

The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the IMF to bridge temporary imbalances of payments.

On August 15, 1971, the United States unilaterally terminated convertibility of the dollar to gold. As a result, "[t]he Bretton Woods system officially ended and the dollar became fully 'fiat currency,' backed by nothing but the promise of the federal government." This action, referred to as the Nixon shock, created the situation in which the United States dollar became the sole backing of currencies and a reserve currency for the member states. Read more here

Pres. Richard Nixon

Nixon's Colossal Monetary Error: The Verdict 40 Years Later
Forbes
by Charles Kadlec
August 15, 2011

Today, Aug. 15, 2011, is the 40th anniversary of President Richard Nixon's colossal error: severing the final link between the dollar and gold. No other single action by Nixon has had a more profound and deleterious effect on the American people. In the end, breaking the solemn promise that a dollar was worth 1/35th of an ounce of gold doomed his Presidency, and marked the beginning of the worst 40 years in American economic history.

The announcement itself was dramatic, contained in a Sunday evening address to the nation from the Oval Office. The promises made were profound and reflected the received wisdom of that day and today: unshackling the U.S. government from the requirement of maintaining the dollar's value in terms of gold would empower able men and women at the Federal Reserve to use monetary policy to increase the general prosperity of the American people.

Domestically, we were promised that the manipulation of quantity and value of a paper dollar would avoid costly recessions, provide high employment, and produce strong economic growth. Internationally, we were promised that the devaluation of the dollar would reduce our trade deficit and improve the international competitiveness of American workers and businesses. And, because trade was only one-tenth of the U.S. economy, all of this could be done while maintaining price stability.

Each and every one of these promises has been broken. Read more here

Foreclosure Crisis Triggers S&P Credit Downgrade
Housing Predictor
by Kevin Chiu
April 19, 2011

Standard and Poor’s long term credit downgrade of the U.S. economy is directly impacted by the foreclosure crisis, which has cost tax payers $148-billion to bail-out Freddie Mac and Fannie Mae so far. But S&P analysts expect "extraordinary official assistance to large players in the U.S. financial sector" to be made to fix the housing market and the economy at large.

"We estimate that it could cost the U.S. government as much as 3.5% of GDP to appropriately capitalize and re-launch Fannie Mae and Freddie Mac, two financial institutions now under federal control," S&P said in a statement, meaning it is likely to cost more than $700-billion to bail out and reorganize the two government sponsored lenders.

In the shadows of a massive failure to regulate the mortgage industry, major financial organizations have failed, including Countrywide, Freddie Mac, Fannie Mae, Bear Stearns and Lehman Brothers. Most commercial banks are hobbled by the foreclosure crisis, yet they are producing profits due to their investments in financial markets. Read more here

19 Reasons Why The Federal Reserve Is At The Heart Of Our Economic Problems

The Economic Collapse blog
by Michael T. Snyder, Esq.
March 30, 2011

Most Americans do not understand what the Federal Reserve is or why it is at the heart of our economic problems. When Americans get into discussions about the economy, most of them still blame either the Democrats or the Republicans for inflation, for the housing crash, for our rampant unemployment and for the national debt. But the truth is that the institution with the most power over our economic system is the Federal Reserve. So exactly what is the Federal Reserve? Most people would say that it is an agency of the federal government. But that is absolutely not true. In fact, the Federal Reserve itself has argued in court that it is not an agency of the federal government. Rather, the Federal Reserve is a privately-owned banking cartel that has been given a perpetual monopoly over our monetary system by the U.S. Congress. This privately-owned central bank has been destroying the value of the U.S. dollar for decades, it has run our economy into the ground and it has driven the U.S. government to the brink of bankruptcy. The Federal Reserve operates in great secrecy, it has never been subjected to a comprehensive audit and it is not accountable to the American people. Yet the decisions that the Federal Reserve makes have a dramatic impact on the lives of every single American citizen.

Read more here

How Is The Central Economic Planning That The Federal Reserve Does Different From The Central Economic Planning That Communist China Does?

The Economic Collapse blog

Michael T. Snyder, Esq.

March 23, 2011

Most Americans believe that we still live in a capitalist system and that free markets primarily determine the growth and development of our economy. But is that really the case? No, sadly it is not. The truth is that the U.S. Federal Reserve does a tremendous amount of central economic planning. So what makes the central economic planning that the Federal Reserve does different from the central economic planning that communist China does? Yes, in China it is the government that does the central planning and in the United States it is a private central bank that does the central planning, but other than that are there any huge differences? And if our economy is centrally planned, then how can we continue to claim that we still have a free market capitalist system? Read more here

Current Price of Gold

The U.S. Mint

Gold-related Investment Information

Gold on Wikipedia

The Extended Confessions Of An Economic Hit Man
Zero Hedge
by Tyler Durden
May 20, 2011

The book " Confessions of an Economic Hit Man" by John Perkins is easily one of the most engrossing pieces of non-fiction one can read to learn about the true drivers behind globalization, espionage, corporate cronyism, the emergence of such "artificial" organizations as the World Bank and the IMF, and most importantly, debt "enslavement", all as seen from an insider's view. It explains in simple words why over the past 40 years the developing world paradigm has been exploited as heavily as it has, why the BRIC concept was instrumental as a Red Herring to perpetuating the myth of endless growth, and why credit must always flow no matter what to keep the status quo in power. For those who have read the book, and for those who are on the fence about reading it, below we present the three part presentation by John Perkins at the 2006 Veterans for Peace National Convention in which he expounds on all the key ideas in his book, and does an extended Q&A covering topics not discussed previously. We urge everyone to spend at least a few minutes listening to Perkins who gives a unique and non-conflicted expert opinion on the primary force for why the the modern equivalent of enslavement is not by force, but by debt. Read more here

$100 Gold Certificate, 1920's

America's Forgotten War Against the Central Banks

"Let me issue and control a nation's money supply, and I care not who makes its laws." (Mayer Amschel Rothschild, Founder of Rothschild Banking Dynasty)

Many prominent Americans such as Benjamin Franklin, Thomas Jefferson, and Andrew Jackson have argued and fought against the central banking polices used throughout Europe.

A note issued by a central bank, such as the Federal Reserve Note, is bank currency. These notes are given to the government in exchange for an interest-bearing government bond. The primary means to pay for the interest on these bonds is to borrow more bank notes, thus beginning a vicious cycle that ultimately ends with the complete destruction of the currency and bankruptcy of the nation. History is replete with such occurrences. Read more

The Rothschild Family 

From Wikipedia, the free encyclopedia

The Rothschild family (known as The House of Rothschild, or more simply as the Rothschilds) is a European family of German Jewish origin that established European banking and finance houses from the late eighteenth century. Five lines of the Austrian branch of the family were elevated into the Austrian nobility, being given hereditary baronies of the Habsburg Empire by Emperor Francis II in 1816. The British branch of the family was elevated into the British nobility at the request of Queen Victoria. It has been argued that during the 19th century, the family possessed by far the largest private fortune in the world, and by far the largest fortune in modern world history. Read more here

David René de Rothschild

The Rothschild Archive was established in 1978 to preserve and arrange the record of a family that is widely recognised for the major contribution it has made to the economic, political and social history of many countries throughout the world.

The Archive continues to reflect the many facets of the family's history and maintains an international research centre for the furtherance of study in these fields.

The research centre is based in London, and this web site has been developed to make the contents of the archive more readily available to remote users. The site aims to cater for the needs of all Rothschild Archive researchers. Read more here

Catherine Austin Fitts

The fastest way to kick-start the shift away from a centralized economy is to stop financing the big banks - and through them, the activities they are financing - and to switch your bank deposits to a well-managed, community bank or credit union. In fact, it's the single greatest point of leverage you have as a consumer.

El Greco – Jesus and the Money Changers in the temple

Mapping the Real Deal: Where Would Jesus Bank?
July 5, 2004
Catherine Austin Fitts

"And Jesus went into the temple and began to cast out them that sold and bought in the temple, and overthrew the tables of the money changers" - Mark 11:15

Jesus and the Bankers

Jesus acted with ferocious and bold integrity when he threw the money changers out of the temple. Needless to say, he hiccuped their cash flows on what otherwise would have been a big grossing day. Their business model threatened, the priests who managed the money changers insisted that the Romans crucify Jesus. The Romans tried to pawn the problem off on the local king, Herod, who ducked and sent Jesus back to the Romans. The Romans, still looking for a way out, tried a flogging. That did not work. The priests meanwhile had succeeded in persuading the crowd to support them and scapegoat Jesus. Thirsting for a crucifixion, the crowd voted to set the criminal Barabbas free instead of Jesus.

Jesus died because the crowd voted for the criminal enterprise. The crowd voted for the priests and their rich endowments and their alliance with the money changers. The crowd did not ask "Cui Bono?" which is Latin for "who benefits?" If they had, they would have seen the real deal on who was making money on the death of Jesus and voted with their conscience, and for their own best interests instead. It's 2000 Years Later and We're Still Voting for the Criminals. Read more here

FDIC Press Release PR-79-2011
April 29, 2011

Bank of the Ozarks, Little Rock, Arkansas, Acquires All the Deposits of Two Georgia Banks First Choice Community Bank, Dallas and The Park Avenue Bank, Valdosta

Bank of the Ozarks, Little Rock, Arkansas, acquired the banking operations, including all the deposits, of two Georgia-based banks. To protect depositors, the Federal Deposit Insurance Corporation (FDIC) entered into purchase and assumption agreements with Bank of the Ozarks.

First Choice Community Bank, Dallas, Georgia, and The Park Avenue Bank, Valdosta, Georgia, were closed today by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver.

All 19 branches of the two closed banks will reopen during their normal business hours beginning Saturday as branches of Bank of the Ozarks. Depositors of the two failed banks will automatically become depositors of Bank of the Ozarks. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. First Choice Community Bank had seven branches in Georgia; and The Park Avenue Bank had eleven branches in Georgia and one branch in Florida.

The FDIC and Bank of the Ozarks entered into loss-share transactions on the failed banks' assets. The loss-share transaction for First Choice Community Bank was $260.7 million; and the loss-share transaction for The Park Avenue Bank was $514.1 million.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for First Choice Community Bank will be $92.4 million; and for The Park Avenue Bank, $306.1 million. Bank of the Ozarks' acquisition of all the deposits of the two institutions was the "least costly" option for the DIF compared to all alternatives.

Read more here

FDIC Failed Bank Information for The Park Avenue Bank, Valdosta, GA

On Friday, April 29, 2011, The Park Avenue Bank, Valdosta, GA was closed by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

All shares of The Park Avenue Bank were owned by its holding company, Park Avenue Bankshares, Inc., Valdosta, GA. The holding company was not included in the closing of the bank or the resulting receivership. If you are a shareholder of Park Avenue Bankshares, Inc., please do not contact or file a claim with the Receiver. You may contact Park Avenue Bankshares, Inc. directly for information as follows:

Park Avenue Bankshares, Inc.
3250 North Valdosta Road
Valdosta, GA 31604-3460
Attention: Donald J. Torbert, Jr.
1-229-241-2775

Link to PAB Annual Reports

Link to The Park Avenue Bank website

Loss-Share Questions and Answers
What is loss sharing?

Loss sharing is a feature that the Federal Deposit Insurance Corporation (FDIC) first introduced into selected purchase and assumption transactions in 1991. Under loss sharing, the FDIC absorbs a portion of the loss on a specified pool of assets which maximizes asset recoveries and minimizes FDIC losses through least-cost approaches. Loss sharing also reduces the FDIC’s immediate cash needs, is operationally simpler and more seamless to failed bank customers and moves assets quickly into the private sector. Read more here

Notice of Taking Possession

Georgia Department of Banking and Finance

The Park Avenue Bank, Valdosta, Georgia

Atlanta, Georgia - The Georgia Department of Banking and Finance ("Department") took possession of The Park Avenue Bank, Valdosta, Georgia on April 29, 2011. The Superior Court of Lowndes County issued an Order appointing the Federal Deposit Insurance Corporation ("FDIC") as Receiver of the Bank effective upon the Department taking possession of The Park Avenue Bank.

The Department took possession of The Park Avenue Bank pursuant to the Official Code of Georgia, Section 7-1-150(a) which authorizes the Department in its discretion to take possession of the business and property of any state chartered financial institution whenever such financial institution is either insolvent or operating in an unsafe or unsound condition to transact its business, is operating in violation of any court order, statute, rule or regulation, or requests the Department to take possession of its business and property.

Through an agreement with the FDIC, The Park Avenue Bank will be acquired by Bank of the Ozarks, Little Rock, Arkansas.

Read more here

Bank of the Ozarks acquires Valdosta bank; FDIC assures deposits safe
The Valdosta Daily Times
by Dean Poling
April 30, 2011

VALDOSTA — After more than 50 years of business, Park Avenue Bank closed its doors Friday afternoon.

It is scheduled to reopen today as part of Bank of the Ozarks, which is headquartered out of Little Rock, Ark. The Federal Deposit Insurance Corporation has insured all deposits and all Park Avenue Bank depositors automatically become depositors of the Bank of the Ozarks, according to the FDIC.

The Georgia Department of Banking and Finance closed Park Avenue Bank at the end of business hours Friday. Read more here

The Park Avenue Bank failed April 29, 2011. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for bank’s failure is $306.1 million.

However R. Bradford Burnette did much better, he walked away with at least $1,422,831 from the bank’s holding company in 2009 at a time when the bank was losing millions.

Is this sophisticated bank robbery, or legitimate bank executive compensation?  See my letter to Allen Stanley, Assistant Vice President of the Federal Reserve Bank of Atlanta, and the response by Fed Counsel Rebecca F. Wasserman January 26, 2011.

Ms. Wasserman wrote "Regulatory information that the Federal Reserve receives about the institutions that it examines is legally protected by the bank examiner privilege. This privilege extends to the information you have requested concerning the Federal Reserve's reasoning behind certain supervisory actions and consideration of possible future supervisory actions. Therefore, the Federal Reserve cannot respond to the questions posed in your letter."

The Park Avenue Bank was loosing millions of dollars in July 2009 when the Federal Reserve and the Georgia Banking Commissioner entered into a Written Agreement with Park Avenue Bank, PAB Bankshares, and their institution-affiliated parties to strengthen credit risk management practices and improve assets, etc., Docket Nos. 09-084-WA/RB-HC and 09-084-WA/RB-SM. See the Written Agreement below in PDF.

Reuters reported that R. Bradford Burnette was paid $1,809,870 in 2009 by PAB Bankshares, Inc., the bank’s holding company. Mr. Burnette is described in PAB Bankshares’ Annual Report as a Retired Bank Executive. According to the 2009 Director Compensation Table, Mr. Burnette was paid $202,292, as follows: Fees earned $32,556; Option awards $4,649; all other $165,087. The 2009 Director Compensation Table is below in PDF, and is page 127 in the 2009 Annual Report. Annual Reports and Presentations

$202,292 - 2009 earnings
$1,220,539 - salary continuation agreement
$1,422,831 - subtotal
$1,809,870 - Reuters compensation number
$387,039 - not accounted for

The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry

William K, Black, author

Persons interested in the economics of fraud, the S&L debacle, the problems of financial regulation, and microeconomics more broadly will find this book to be very important. It is a marvelous combination of insider experiences, well-grounded generalizations, and the foundations of a broader research agenda. It merits a wide readership and, one hopes, sustained reflection on its arguments and conclusions. (Robert E. Prasch Journal of Economic Issues )

Bill Black has detailed an alarming story about financial and political corruption….the lessons are as fresh as the morning newspaper. One of those lessons really sticks out: one brave man with a conscience could stand up for us all. (Paul Volcker, former chairman of the Federal Reserve ) Read more here

Park Avenue Bank robbed
The Valdosta Daily Times
August 25, 2008

VALDOSTA — Park Avenue Bank, at the corner of Toombs Street and West Hill Avenue, was robbed Friday afternoon and the suspect remains at large.

At approximately 2:10 p.m., a slender, white male entered the bank and demanded money, according to Valdosta police. Although the offender insinuated he may have had a gun, no weapons were displayed. Bank personnel complied with the demands of the offender, who fled the scene after taking an undisclosed amount of money, police said. Read more here

Money laundering is the practice of engaging in a series of financial transactions to conceal the ownership, source, control or destination of illegally gained money. Ultimately, it is the process by which the proceeds of crime are made to appear to have a legitimate origin. The crime proceeds involved can be generated by any number of criminal acts, including drug dealing, corruption, accounting and other types of fraud, and tax evasion. The methods by which money may be laundered are varied and can range in sophistication from simple to complex.

Many regulatory and governmental authorities quote estimates each year for the amount of money laundered, either worldwide or within their national economy. In 1996 the International Monetary Fund estimated that two to five percent of the worldwide global economy involved laundered money. However, the FATF, an intergovernmental body set up to combat money laundering, admitted that "overall it is absolutely impossible to produce a reliable estimate of the amount of money laundered and therefore the FATF does not publish any figures in this regard." Academic commentators have likewise been unable to estimate the volume of money with any degree of assurance. Read more on Wikipedia

UNODC on money-laundering and countering the financing of terrorism

The Law Enforcement, Organized Crime and Anti-Money-Laundering Unit of UNODC is responsible for carrying out the Global Programme against Money-Laundering, Proceeds of Crime and the Financing of Terrorism, which was established in 1997 in response to the mandate given to UNODC through the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988. The Unit's mandate was strengthened in 1998 by the Political Declaration and the measures for countering money-laundering adopted by the General Assembly at its twentieth special session, which broadened the scope of the mandate to cover all serious crime, not just drug-related offences.

The broad objective of the Global Programme is to strengthen the ability of Member States to implement measures against money-laundering and the financing of terrorism and to assist them in detecting, seizing and confiscating illicit proceeds, as required pursuant to United Nations instruments and other globally accepted standards, by providing relevant and appropriate technical assistance upon request.

Wikipedia - United Nations Office on Drugs and Crime

The United Nations Office on Drugs and Crime (UNODC) is a United Nations agency that was established in 1997 as the Office for Drug Control and Crime Prevention by combining the United Nations International Drug Control Program (UNDCP) and the Crime Prevention and Criminal Justice Division in the United Nations Office at Vienna. It was renamed the United Nations Office on Drugs and Crime in 2002. Read more on Wikipedia

Catherine Austin Fitts

"How the Money Works" in the Illicit Drug Trade
Catherine Austin Fitts
Mercato Libero News

Ms. Fitts’ articles about money laundering show that Florida is one of four states with the largest market share in illegal narcotics trafficking. The other states are New York, California and Texas. Ms. Fitts has written extensively about the money-laundering process. Ms. Fitts holds a Wharton MBA, served as Assistant Secretary of Housing - Federal Housing Commissioner under President George H. W. Bush, was a Managing Director and member of the board of Wall Street firm Dillon, Read & Co. Inc., and was President of The Hamilton Securities Group, an investment bank and financial software developer. Ms. Fitts is currently President of Solari, Inc. and publishes The Solari Report. Ms. Fitts is also currently a Managing Partner of Solari Investment Advisory Services, LLC. You can read more about Ms. Fitts’ background here

ABN AMRO Bank Dubai

ABN AMRO Bank N.V

About We want to be a bank that always puts its clients first and create sustainable long-term value for all of ABN AMRO's stakeholders – including clients, shareholders, employees and society at large.

ABN AMRO
From Wikipedia, the free encyclopedia

ABN AMRO Bank N.V. is a Dutch bank with headquarters in Amsterdam, the Netherlands. It was established, in its current form, in 2009 following the acquisition and break up of ABN AMRO Group by a banking consortium consisting of Royal Bank of Scotland Group, Santander and Fortis. Following the collapse of Fortis, the acquirer of the Dutch business, it was part nationalized by the Dutch Government along with Fortis Bank Nederland.

The bank is a product of a long history of mergers and acquisitions that date back to 1765. The original ABN AMRO was created in 1991 when Algemene Bank Nederland (ABN) and Amsterdam and Rotterdam Bank (AMRO) merged. By 2007 ABN AMRO was the second largest bank in the Netherlands and eighth largest banks in Europe by assets. At that time the magazine The Banker and Fortune Global 500 placed the bank at number 15th in the list of worlds biggest banks and it had operations in 63 countries, with over 110,000 employees. Read more on Wikipedia

ABN AMRO Clearing Chicago LLC

The Federal Reserve Board

Press release

December 19, 2005

ABN AMRO Bank, to pay $80 million in penalties to U.S. federal and state regulators

Bank supervisory and penalty actions released Monday will require ABN AMRO Bank, N.V. to undertake remedial action in its worldwide banking operations and to pay $80 million in penalties to U.S. federal and state regulators. Read more here

Illinois Signs Consent Orders Against ABN AMRO

Illinois Department of Financial and Professional Regulation

News Release

December 19, 2005

Chicago – A $15 million fine paid to the State of Illinois by ABN AMRO Bank N.V., head-quartered in the Netherlands, is the largest penalty ever imposed against an Illinois regulated bank. The fine is part of the $80 million settlement against the bank announced today to settle persistent problems with ABN AMRO’s compliance of federal and state laws and regulations.

ABN AMRO has offices in Chicago with assets of more than $31.4 billion. It is regulated by the Illinois Department of Financial and Professional Regulation (IDFPR), under its International Bank Supervision section, which participated in the examination and investigation of the bank’s business practices. Read more here

ABN Amro to Pay $80 Million Fine Over Iran, Libya

Wall Street Journal

December 20, 2005

Federal authorities fined Dutch bank ABN Amro Holding NV $80 million, one of the largest banking fines in U.S. history, for violating U.S. money-laundering laws and sanctions against Iran and Libya.

The move, by the U.S. Federal Reserve and the Treasury Department financial crime- and sanctions-control units, came in response to nearly a decade of violations involving billions of dollars in transactions that passed through the bank's offices in New York and Dubai, United Arab Emirates. Read more here

Burgess & Sedgeman

Florida Office of Financial Regulation
Admin. File No. 0828-FI-03/11


Petition to the Florida Office of Financial Regulation (OFR) for a public hearing on the Application to Merge Community Bank & Company Lakewood Ranch, Florida, and First Community Bank of America, Pinellas Park, Florida; Resulting Institution: Community Bank & Company. Includes Statement in Opposition, Motion for Designation as Party, and Notice of Intention to Appear.

Download in PDF below

Gov. Rick Scott

In a letter dated February 22, 2011 Florida Gov. Rick Scott thanked Neil Gillespie for contacting the Governor's office about changes to the Office of Financial Regulation. (ORF). Gov. Scott suggested I share my concerns with the Florida Cabinet about my recent experience with the Office of Financial Regulation (OFR). In a word, it was awful. Read my April 30, 2011 letter to the Florida Cabinet, Attorney General Pam Bondi, Chief Financial Officer Jeff Atwater, and Agriculture Commissioner Adam Putnam, in the PDF below. 

Florida Cabinet Member Adam H. Putnam, Commissioner, Florida Department of Agriculture and Consumer Services, responded to Neil Gillespie by letter of May 17, 2011. Commissioner Putnam agrees that politics have no role in determining the future of a financial institution and believes that consistent regulation of our state's financial institutions will provide for the growth and stability of sound community banks and thrifts. Please know that it remains of paramount importance to the Commissioner that Florida's financial institutions receive fair and equal treatment among regulators - whether State or Federal. Read Commissioner Putnam’s letter below in PDF. 

Florida AG Pam Bondi

Attorney General Pam Bondi received Neil Gillespie’s correspondence regarding his experiences with the Florida Office of Financial Regulation (OFR). Attorney General Bondi responded, and through Brandon Brooks expressed sorry for his difficulties, and forwarded his complaint to the Attorney General's legal staff for further review. Gillespie may also contact the OFR Inspector General. As the OFR is an agency under the direct authority of the Governor's Office, he may also wish to contact the Chief Inspector General for the State of Florida. Read the letter from Attorney General Pam Bondi below in PDF.

Facebook Community Bank

Investigative Reporting Workshop
American University
Washington, D.C.

In recent years, much of the traditional American media, in a drive to cut costs and maintain profits, has slashed its capacity to do investigative journalism. This has happened just as the forces of technology and globalization are combining to make government and powerful private institutions less transparent, and thus, less subject to public scrutiny and oversight. Read more here

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Shannon Behnken

Critics: Judge with interest in bank shouldn't hear foreclosures
The Tampa Tribune
By SHANNON BEHNKEN
July 21, 2011
 
TAMPA -- A Hillsborough County judge seeking to tame a backlog of thousands of foreclosure lawsuits is raising questions from critics who wonder whether she should be hearing foreclosure cases at all.

Judge Martha J. Cook has an ownership interest in Community Bank, where her husband, William H. Sedgeman Jr., serves as chairman and chief executive, public documents show.
The bank, known formally as Community Bank of Manatee, has 17 locations throughout the Tampa Bay area. The bank has been hard-hit by the foreclosure crisis and has struggled to shed troubled assets.

Like most banks, Community Bank often finds itself as a plaintiff against homeowners in foreclosure cases.

"It's reasonable that a homeowner would fear they aren't going to get a fair hearing before her," said Mark Stopa, a foreclosure defense attorney. "There's no way I could go into court before her without thinking about this." Read more here

Business briefs
Herald-Tribune
May 12, 2011

LAKEWOOD RANCH
Community Bank closing deal for lender

Community Bank & Co. expects to close its $10 million purchase of First Community Bank of America in Pinellas Park on June 1, now that the Federal Deposit Insurance Corp. has signed off. Lakewood Ranch-based Community will inject $20 million into the combined bank to keep it well capitalized. Community will be a $770 million-asset bank with 17 offices in Manatee, Charlotte, Hillsborough, Pasco and Pinellas counties. Read more here

Community Bank Receives Approval from State of Florida for Acquisition of and Merger with First Community Bank of America
PRNewswire
April 21, 2011

LAKEWOOD RANCH, Fla., April 21, 2011 /PRNewswire/ -- Community Bank & Company today announced that it has received from the State of Florida Office of Financial Regulation, a notice of intent to approve its acquisition of and merger with First Community Bank of America. Community Bank expects to complete the acquisition in the second quarter of 2011 pending approval from the FDIC. Read more here

Hearing on Bradenton bank set despite petitioner’s withdrawal
Bradenton.com
By CHRISTINE HAWES
April 15, 2011

MANATEE -- State regulators will be there. Representatives of the Manatee County bank whose big move into Pinellas County has been challenged will be there. A taxpayer-funded bailiff will be there. But the person who asked for a hearing over Community Bank & Co.’s planned purchase of First Community Bank of America decided Thursday he doesn’t want the hearing after all.

Neil Gillespie, operator of a website called yousue.org, requested the hearing on March 25. He claimed in his petition that the Florida Office of Financial Regulation had made numerous errors in its findings of fact regarding Community Bank’s acquisition. But Gillespie, an Ocala resident, withdrew his petition Thursday just hours before the scheduled 10 a.m. start today in a Manatee County courtroom. In his 20-page petition to withdraw, Gillespie expanded on claims he had made in his initial 18-page petition for the hearing. Read more here

Hielscher

A withdrawal, but a hearing on bank purchase plan anyway
Herald-Tribune
By John Hielscher
April 14, 2011

The public hearing will proceed today, but there might be no fireworks now that an opponent has backed off his challenge to the Community Bank & Co.-First Community Bank of America deal.

The Florida Office of Financial Regulation scheduled the hearing to take comments on Lakewood Ranch-based Community Bank's pending $10 million purchase of First Community.

But on Thursday, the Ocala man who sought the hearing withdrew his petition, saying the merger "is a foregone conclusion."

OFR spokeswoman Flora Beal said it was too late to stop the hearing, with no time for the required cancellation notice, and OFR staff was already headed to Bradenton.

So it will still be held at 10 a.m. in Courtroom 8B of the Manatee County Judicial Center.

Whether petitioner Neil J. Gillespie will appear is unknown. He was denied "party" status for the hearing, but like anyone would be given time to speak.

OFR Commissioner Thomas Cardwell signed off on Gillespie's request for the hearing in late March. Gillespie's petition "for the purpose of accepting public comment meets the requirements for approval" under state rules, Cardwell said in his order. Read more here

Manning

Regulators set public hearing on Community Bank & Co., First Community Bank of America merger
Tampa Bay Business Journal
by Margie Manning
April 13, 2011


The Florida Office of Financial Regulation has taken the somewhat unusual step of scheduling a public hearing on the planned acquisition of First Community Bank of America by Community Bank & Co.

The hearing will be at 10 a.m. April 15 at the Manatee County Judicial Center in Bradenton.

It comes on the heels of an April 11 special meeting of shareholders of First Community Bank Corp. of America (NASDAQ: FCFL), who voted to dissolve the Pinellas Park-based company after the bank acquisition is finalized.

The hearing was requested in a petition filed by Neil Gillespie, who described himself as a former customer of Community Bank, which changed its name earlier this year from Community Bank of Manatee. Read more here

Hielscher

Public hearing set over Manatee bank's planned purchase of another bank
Herald-Tribune
By John Hielscher
April 13, 2011

The Florida Office of Financial Regulation will hold a public hearing Friday in Bradenton on Community Bank & Co.'s proposed $10 million purchase of Florida Community Bank of America. The OFR agreed to the hearing after being petitioned by a former Community Bank customer who is challenging the deal on numerous grounds.

CBM Florida Holding Co., the parent of Lakewood Ranch-based Community Bank, agreed in February to acquire First Community Bank, a struggling 11-office, $470-million-asset bank in Pinellas Park. If the deal goes through, CBM will inject $20 million in fresh capital into the merged bank to retain its well-capitalized status. Community Bank chairman and chief executive Bill Sedgeman declined Wednesday to comment on the hearing or the ex-customer's opposition to the deal.

OFR spokeswoman Flora Beal said such hearings are requested occasionally. "They are neither common nor uncommon," Beal said. The hearing will begin at 10 a.m. in courtroom 8B of the Manatee County Judicial Center. Neil J. Gillespie of Ocala, describing himself as a former Community Bank customer, filed an 18-page petition objecting to the deal. Read more here

Community Bank FDIC consent order lifted
Bradenton.com
By JENNIFER RICH
April 2, 2011

MANATEE -- The FDIC Friday lifted the consent order that Community Bank & Co. had been operating under since November 2009. That was good news for bank officials who have worked hard to increase capitalization and raise new capital. "This is yet another positive development for Community Bank," said Chairman and Chief Executive Officer Bill Sedgeman.

The state’s Office of Financial Regulation had previously lifted its consent order in November.
The Lakewood Ranch bank received a three-star rating in the March rankings by Bauer Financial. The highest ranking of financial health of banks is five stars.

Community Bank was upgraded from a two-star to a three-star in the second quarter of 2010 after the bank raised $1.7 million in new capital. In the third quarter, it added an additional $7 million. "Community Bank is a highly capitalized and profitable bank and we are excited about all the positive signs we are seeing in the marketplace," said bank Director Trevor Burgess.

The bank, which is acquiring First Community Bank of America based in Pinellas Park, plans to open a sixth branch this month on Beach Drive in St. Petersburg. Community Bank has approximately $275 million in assets among its six branches in Manatee and Hillsborough counties. Read more here

Manning

Bank merger gains steam
Tampa Bay Business Journal
by Margie Manning
April 1, 2011

There’s been a lot more dire news about regulatory orders involving banks than positive developments lately.

But here’s a bit of news that could put some momentum into CBM Florida Holding Co.’s plan to buy First Community Bank of America for $10 million. The Federal Deposit Insurance Corp. lifted a regulatory order that CBM’s subsidiary, Community Bank & Co., has been operating under for more than a year.

The FDIC and the Florida Office of Financial Regulation issued consent orders against the institution, then called Community Bank of Manatee, in November 2009, requiring the bank to boost capital and improve banking practices. State regulators terminated their interest in the consent order one year later, a press statement from Community Bank said.

Community Bank has fared far better than did Peninsula Bank, an Englewood institution that signed a consent order with the state and FDIC at the same time as Community Bank. Peninsula failed in June and was acquired by Premier American Bank.

Community Bank, headquartered in Lakewood Ranch and with $276 million in assets as of Dec. 31, plans to buy the larger First Community Bank of America, a Pinellas Park-based institution with $470.6 million in assets, creating an institution with 17 branches across Hillsborough, Pinellas, Manatee, Pasco and Charlotte counties.

Shareholders of parent company First Community Bank Corporation of America (NASDAQ: FCFL) are set to vote on the deal April 11. Read more here

Hielscher

Bank crisis far from over
Herald Tribune
By John Hielscher
March 12, 2011

Six months have passed since the region's last bank failure. Just two Florida banks have collapsed so far this year, compared with five at this point last year. But analysts warn there is little reason to celebrate.

"The worst is behind us, but we are far from out of the Everglades on this banking crisis," said Ken Thomas, an expert on Florida banking.

"As last year, we will continue to lead the nation this year in the number of problem banks, those with enforcement actions, and in bank failures, but we will likely see a smaller number, 15 to 20," Thomas said.

Twenty-nine Florida banks failed in 2010, the most in any state and more than double the 14 that were closed in 2009.

Georgia recorded the second-highest rate of bank failures with 21. The two states accounted for nearly a third of the 157 U.S. bank failures last year.

"This is a remarkable statistic," said Thomas, a Miami-based consultant who also is a finance lecturer at the Wharton School of the University of Pennsylvania.

Florida's 247 banks and thrifts lost a combined $1.06 billion last year, an improvement from losses of $2.21 billion in 2009 and $2.76 billion in 2008.

Nearly two-thirds of the state's financial institutions remained in the red in 2010, compared with just 21 percent nationwide. Read more here

Manning

Untold tale behind the First Community Bank of America deal
Tampa Bay Business Journal
by Margie Manning
March 7, 2011


First Community Bank Corporation of America was wooed by at least one other suitor before agreeing to sell itself to CBM Florida Holding Co., the parent company of Community Bank & Co.

A Tampa area bank, identified only as "Bank A," approached First Community in July to talk about a partnership, according to a preliminary proxy filed by First Community with the Securities and Exchange Commission.

First Community (NASDAQ: FCFL), headquartered in Pinellas Park, was receptive; it had been losing money since 2008 as real estate values plummeted and its loan portfolio weakened, and it was in desperate need of fresh capital at a time when few investors were interested in community banks.

Bank A signed a confidentiality agreement with First Community and conducted due diligence throughout August and September — before Bank A decided against a deal, based on a loan analysis, the proxy said. Read more here

Manning

Regulators crack down on First Community Bank Corp. of America
Tampa Bay Business Journal
by Margie Manning
March 1, 2011


Federal regulators issued cease and desist orders to First Community Bank Corporation of America and its subsidiary, First Community Bank of America, just days after the holding company and the bank agreed to be acquired by CMB Florida Holding Co.

The cease and desist orders, which are among the more serious orders regulators issue against banks, require First Community to boost capital, improve earnings and cut problem loans, and impose other restrictions on how the bank does business.

The orders were issued Feb. 24 by the Office of Thrift Supervision. They were issued two weeks after First Community Bank Corporation of America (NASDAQ: FCFL), headquartered in Pinellas Park, signed an agreement to be acquired by CMB Florida Holding, the parent company of Community Bank & Co., formerly Community Bank of Manatee. Read more here

Florida bank failures 2010
Housing Wire
by CHRISTINE RICCIARDI
December 21, 2010

Bank failures in Florida have cost the Federal Deposit Insurance Corp. the most money of any state in 2010, according a report by Condo Vultures released Tuesday. The real estate consultancy firm said the 29 bank failures have cost about $2.1 billion in losses to the FDIC's deposit insurance fund, or about 10% of the $22.2 billion in losses so far in 2010.

Since 2008, when the housing bubble burst, 45 Floridian banking institutions have closed for a total loss of $9.7 billion, or 14% of the $69.1 billion total write-off nationwide since that year.
Peter Zalewski, a principal at Condo Vultures, said this data should come as no surprise.

"Consider that 185,000 condominium units — including more than 22,000 in greater downtown Miami – were created alone in the Tri-county South Florida region since 2003," Zalewski said. The Tri-county Florida area encompasses the Miami-Dade, Broward and Palm Beach counties. "It is worth noting the FDIC has been preparing for a rash of Florida bank failures, which is why it opened a 500-person bank seizure and asset sales office in the north Florida city Jacksonville in 2009." Read more here

Are we at the end of local bank failures?
Herald Tribune
by John Hielscher
September 20, 2010

Two Florida Highway Patrol Officers enter the downtown Sarasota branch of Flagship National Bank as federal regulators seized and closed the bank on Friday evening, Oct. 23, 2009

Investors snap up Florida banking bargains
Herald-Tribune
By John Hielscher
July 13, 2010

FLORIDA: Private equity groups have become key players in the acquisitions

BB&T Bank starts to make its presence known in region
Herald-Tribune
By John Hielscher
April 19, 2010

THE SIGNS ARE ALREADY UP, and about 50 BB&T bankers will soon follow into the bank's new regional headquarters in downtown Sarasota.

BB&T, which bought the failed Colonial Bank last year, is consolidating several offices and operations into the 1800 Second St. building. Read more here

Community Bank boosts capital

Community Bank of Manatee recently added $4.7 million to its capital coffers, boosting its regulatory capital levels and girding to increase lending.

Chairman/CEO Bill Sedgeman says about $3 million of that capital flowed down from the holding company, CBM Florida Holding Co., which was formed in December when an investor group acquired a majority stake in Community Bank. The rest came from two private investors new to the bank, he said.

The fresh capital will raise capital levels about 1 percentage point. The bank is under a consent order with federal regulators to maintain capital and reduce bad loans.

Sedgeman says loan demand is growing from small- and medium-sized businesses and from home buyers and refinances.

"We are trying to get the word out that we are open to taking new loan applications and for start-up and existing businesses," he said.

A group led by Brazilian businessman Marcelo Lima and former New York investment banker Trevor Burgess bought control of the bank for $11.5 million in December. Existing shareholders added $3.5 million. The bank lost $9.3 million in 2009. Read more here

Failed bank was under federal investigation
Herald-Tribune
By Michael Braga & Matthew Doig
May 16, 2011

First Priority Bank officials were secretly under investigation in 2009 by a federal agent whose office specializes in criminal cases against lenders, state records show. A Federal Deposit Insurance Corp. agent interviewed customers and at least one employee from the failed Bradenton lender while looking for "possible illicit activities of those involved with the bank," according to an FDIC summary provided to Florida law enforcement authorities two years ago.

FDIC officials would not comment on the investigation's status. But the glimpse provided by the Florida Department of Law Enforcement documents suggests a wide-ranging review that examined specific loans to customers, general banking practices and efforts by bank officials to shield information from regulators. Key in the FDIC investigation, according to the summary, were statements made by a former employee who once worked as bank president George Najmy's assistant.

The employee outlined a series of efforts by managers to shield their activities from scrutiny. Among them, bank leaders withheld items from the minutes of meetings and held off-the-books meetings where banking decisions were made.

In addition, the FDLE report states, two customers told an FDIC investigator the bank gave them inflated loans on the condition that they use the extra money to buy stock in the bank. Read more here