Bank Loan

Qatar Cuts Interest Rates

noreply@blogger.com (muhammad) — Mon, 29 Aug 2011 19:44:00 +0000

Decline in Bank Loan Growth

April 5 (Bloomberg) -- Qatar’s central bank cut interest rates for the first time in eight months after a slowdown in credit growth.

The bank lowered the benchmark overnight lending rate by 50 basis points to 5 percent and the deposit rate by the same amount to 1 percent, Governor Abdullah Al Thani said today in a telephone interview. He didn’t give a reason for the moves. The last reduction in August aimed to counter deflation and low borrowing costs worldwide, the central bank said at the time.

Growth in Qatari bank credit dropped to 10 percent in February, the slowest pace since 2009, according to central bank data. The decline came amid political turmoil in the Middle East, with unrest in Tunisia and Egypt spreading into some of Qatar’s Persian Gulf neighbors such as Bahrain.

“We see the cut in lending and deposit rates as a move to support private-sector credit growth,” said Monica Malik, an economist at Cairo-based investment bank EFG-Hermes Holding SAE. “There is substantial room to reduce the lending rate.”

Qatar, the world’s fastest-growing economy, held interest rates at levels higher than in other Gulf nations as the global financial crisis crimped borrowing in the region. Its inflation rate rose to 1.8 percent in February, after the country experienced deflation for most of 2010.

Qatar forecasts economic growth of 15.7 percent this year, slowing to 7.1 percent in 2012. The largest exporter of liquefied natural gas, it has a population of about 850,000 and the world’s highest per-capita gross domestic product, according to the CIA World Factbook. The yield on Qatar’s 4 percent dollar bond maturing January 2015 dropped 4 basis points to 2.98 percent today, according to Bloomberg prices.

Qatar’s benchmark stock index has declined about 2 percent this year after climbing almost 25 percent in 2010.

--With assistance from Vivian Salama and Dana El Baltaji in Dubai. Editors: Heather Langan, Louis Meixler, Ben Holland, Susan Lerner.

To contact the reporter on this story: Camilla Hall in Dubai at chall24@bloomberg.net.

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

America Loan Backstop

noreply@blogger.com (muhammad) — Sat, 09 Jul 2011 04:37:00 +0000

Bank of America Loan Backstop

On January 16^th 2009, Bank of America (BofA) disclosed with its first ever quarterly loss of $1.79 billion, a US government loan backstop for $118 billion on assets mostly from its government encouraged Merrill Lynch acquisition¹. The loan backstop is designed to cover a pool of financial instruments, assets, for up to $118 billion with maturities up to 10 years through the Treasury and FDIC with the Federal Reserve providing the actual non-recourse loan². The non-recourse loans means in the event BofA cannot repay the loan, the government is entitled to seize the risky assets being pledged by BofA as collateral, but if the loan value exceeds the value of the risky assets, it cannot go after BofA for the remaining loan amount.

There are a few strict limits imposed on BofA when using this loan facility: executive compensation must be submitted and approved by the government, dividends on common shares cannot exceed $.01 per share per quarter for three years without government approval, $4 billion of preferred stock with an 8% dividend rate along with other fees are to be paid to the government, and any material disposal of the risky assets in the pool by BofA has to be approved by the government².

As of July 2009, the overall confidence of the economy has picked up and BofA has never used the funding provided by the government loan backstop. Both sides, the government and BofA, agree the accord was never signed, but the government wants BofA to pay fees in the range of $2-4 billion for having the implicit government guarantee and potential access to the loan facility³.

Loan Fraud

noreply@blogger.com (muhammad) — Sun, 20 Jun 2010 08:09:00 +0000

Fraudulent loans

Mortgage Fraud

Mortgage fraud is the most common form of loan fraud, and the most costly. The victims can be banks or individuals. And sometimes individuals can perpetrate fraud without even knowing it. “Creative financing” is a term that has been used in the mortgage industry for a long time now. Unfortunately, many times it forces the consumer to commit fraud without even realizing it. Here are a few examples of some things that a mortgage applicant may do which would constitute mortgage fraud:
Over appraising a property value. Happen to be good friends with an appraiser? Maybe he bumped up your house value by a little bit to help you get a higher selling price. If that’s the case, it’s mortgage fraud.
Applying for a “stated income” mortgage? Maybe you exaggerated your income a little bit to help get a lower interest rate. That’s not creative financing, that’s mortgage fraud.
Kickbacks, false deposits, lying about residency, lying about employment, repayment of gifts, and many other common activities may be construed as fraud. Unfortunately, some unscrupulous mortgage brokers looking for a quick buck may actively encourage you to engage in fraud, and even convince you that it’s perfectly legal. According to the FBI, mortgage fraud is defined as “any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan .
Other Types Of Fraudulent Loans
Other types of fraudulent loans may include applying for a loan with a fake identity, forging loan documentation, or even posing as a financial institution in order to collect a down payment on an alleged loan, and disappearing after receiving the cash.

Five banks given responsibility

noreply@blogger.com (muhammad) — Sat, 13 Mar 2010 07:59:00 +0000

Five banks given responsibility of the A$7 billion IPO

The government of Queensland has picked up five investment banks to manage the public offering of QR National. The total worth of the IPO is expected to be close to A$7 billion.
Credit Suisse, Goldman Sachs, JBWere, Merrill Lynch, RBS and UBS are going to the ones, said the treasurer secretary of Queensland, Andrew Fraser.
QR is into the business of coal, freight and infrastructure servicing. The announcement that it would go public came on December 8.

A Banker appointed as Chief of Australia Post

A banker has been appointed as chief executive of Australia Post. The Government owned mail service has appointed Ahmed Fahour, Former National Australia Bank chief, as chief executive of Australia Post. This was done after a long international search of four months.
Mr Fahour, who headed NAB's Australian business, was also a member of the prime minister's Social Inclusion Board and a trustee of the Melbourne Cricket Ground. He also held some senior roles with Citigroup, Boston Consulting Group and most recently Gulf Finance House.

Online Payday Loan Sites

noreply@blogger.com (muhammad) — Fri, 25 Dec 2009 06:37:00 +0000

Consumers Warned of Online Payday Loan Sites

The Consumer Federation of America (CFA) is warning consumers to exercise extreme caution when using Internet payday loan sites, where loans due by the next payday, can cost up to $30 per $100 borrowed and borrowers typically face annual interest rates (APRs) of 650%.
According to a CFA survey of one hundred Internet payday loan sites, small loans involving electronic access to consumers' checking accounts pose high risks to consumers who borrow money by transmitting personal financial information via the Internet."Internet payday loans cost up to $30 per $100 borrowed and must be repaid or refinanced by the borrower's next payday," said Jean Ann Fox, CFA's director of consumer protection. "If payday is in two weeks, a $500 loan costs $150, and $650 will be electronically withdrawn from the borrower's checking account."borrower's checking account."Online payday loans are marketed through e-mail, online search, paid ads, and referrals. Typically, a consumer fills out an online application form or faxes a completed application that requests personal information, bank account numbers, Social Security Numbers and employer information. Borrowers fax copies of a check, a recent bank statement, and signed paperwork. The loan is direct deposited into the consumer's checking account and loan payment or the finance charge is electronically withdrawn on the borrower's next payday.
"Internet payday loans are dangerous for cash-strapped consumers," stated Ms. Fox. "They combine the high costs and collection risks of check-based payday loans with security risks of sending bank account numbers and Social Security Numbers over web links to unknown lenders."
CFA's survey of 100 Internet payday loan sites showed that loans from $200 to $2,500 were available, with $500 the most frequently offered. Finance charges ranged from $10 per $100 up to $30 per $100 borrowed. The most frequent rate was $25 per $100, or 650% annual interest rate (APR) if the loan is repaid in two weeks. Typically loans are due on the borrower's next payday which can be a shorter term.
Only 38 sites disclosed the annual interest rates for loans prior to customers completing the application process, while 57 sites quoted the finance charge. The most frequently posted APR was 652%, followed by 780%.
Although loans are due on the borrower's next payday, many surveyed sites automatically renew the loan, withdrawing the finance charge from the borrower's bank account and extending the loan for another pay cycle. Sixty-five of the surveyed sites permit loan renewals with no reduction in principal. At some lenders, consumers have to take additional steps to actually repay the loan. After several renewals, some lenders require borrowers to reduce the loan principal with each renewal.
Contracts from Internet payday lenders include a range of one-sided terms, such as mandatory arbitration clauses, agreements not to participate in class action lawsuits, and agreements not to file for bankruptcy. Some lenders require applicants to agree to keep their bank accounts open until loans are repaid. Others ask for "voluntary" wage assignments even in states where wage assignments are not legal.

Why You Need The Best Payday Loans

noreply@blogger.com (muhammad) — Mon, 23 Nov 2009 08:30:00 +0000

The Best Payday Loans

It can happen to anyone. There's no one among us that's such a good money manager that they can't accidently forget to pay a bill and then find themselves a little short when the notice comes in the mail that they're overdue.
We can't foresee when our car is going to break down either and generally we don't have lots of money just sitting in the bank to cover those costly repairs. Those are just a few of the reasons that everyone should have the advantage of knowing where they can get the kind of payday loans that will help them smooth over the trouble spots. These are a great way to get a cash advance on the Internet that's hassle free.
A Hassle Free Cash Advance
First and foremost you to understand why the best place to look for one of these loans is on the Internet. The Web became the preferred way of doing business a few years ago for several reasons but at the top of the list was the way the Internet has of disposing with red tape.
No where is that straight to the point aptitude more obvious than with payday loans. When you start searching for the place that will suit your needs and budget, you'll soon see that the best of the firms that offer this service provide great features like competitive rates and no application fees.
Easy To Apply Online
That makes it all the more easy for you to apply online for one of these loans and get an answer usually within minutes. It's not uncommon to look for the money to be in your possession on the next business day. There are a variety of reasons why this type of cash advance is popular.
Medical Bills. With the state of the nation's healthcare up in the air, it's important to know that you've got a backup plan in case you're in between policies now and need to know that you can get some money should you need a little coverage. There are items that you might not account for in the daily budget like glasses and prescription drugs.
Rent. It's often hard to keep all the loose ends of any financial situation together and even the most responsible people can forget their rent and get stuck between paychecks.
The point is simple. Getting to understand all the things that the right payday loans company can do for you is a solid investment in your piece of mind.

Searching for a direct deposit cash advance?

Are you counting the days until your next payday? Do you lose sleep every night wondering how you are going toLet our payday cash advance matching service help you out of your financial difficulties. Start to afford to make your next car payment on time? If you answered yes to any of those two questions, you maybe in serious financial risk and things will only get worse unless you do something about it.
Well fret no further, because the good people at Check Free Cash have the solution for you! With our service, we find lenders who will direct deposit cash advances to you. Therefore, you can meet your current cash needs with even a little extra to spare. All you have to do in order to get your payday loan is fill out a quick form and you will have your money in a flash. No more waiting which means you can use your money when you want to. Our lenders have exceptional customer service, and are willing to work with clients of any background or financial history. day

Borrow Money Through a Personal Bank Loan

noreply@blogger.com (muhammad) — Sat, 24 Oct 2009 06:56:00 +0000

Instructions

Assess your current financial situation by listing your assets, detailing your monthly income and deducting any liabilities, debts or expenses.
Ask your employer for a letter confirming your monthly income and job security, and back it up with pay stubs or, if your salary is deposited directly into your bank account, invoice statements.
Do some shopping. You may or may not qualify to get a personal loan through your regular bank. If you don't, there are dozens of lenders out there who specialize in personal loans
Compare not only interest rates, but also repayment terms. Find out if your monthly loan payment is fixed or variable, and opt for a fixed term whenever possible. Ask about any up-front fees, and make sure you know whether the loan is disbursed all at once or in installments.
Offer collateral to get a lower interest rate. Even if you have excellent credit, an unsecured personal loan will always come at a higher interest rate than a secured one.
Complete all application materials in full, including supporting documentation listing your assets, liabilities and income
Complete all application materials in full, including supporting documentation listing your assets, liabilities and income
Repay the loan according to the terms outlined in your agreement. If you default, you risk losing the collateral you offered up to secure your loan. If you have an unsecured loan, failure to make payments will have a profoundly negative impact on your credit rating.

world bank loan for Pakistan education

noreply@blogger.com (muhammad) — Wed, 23 Sep 2009 18:36:00 +0000

$300m world bank loan for Pakistan education

Washington, Sep 12: The World Bank has approved a $300 million concessional loan for Pakistan for education and poverty reduction.
The bank's board, which met in Washington on Thursday, approved $200 million for the Benazir Income Support Programme and $100 million for higher education.
It is an IDA concessional loan at zero point five per cent interest rate and is repayable in 35 years.
Under the Benzair Income Support Programme, the government aims to provide cash grants to a targeted population designated as poor.
Two months ago, the World Bank loaned $75 million to Pakistan from its technical assistance fund to conduct survey to determine who qualifies to receive cash grants. A World Bank team will conduct the survey and based on it findings, it will develop a score card or guidelines for the distribution of grants.
"Pakistani households are highly vulnerable to income shocks and existing social assistance programmes cover only a very small fraction of the poor," said Yusupha Crookes, the World Bank country director for Pakistan.
"Assisting the poor and the vulnerable is a key objective of the government's poverty reduction strategy. This project will help build a robust safety net system that provides chronic and transient poor people with both basic income support and access to opportunities that will help lift them out of poverty," Mr Crookes added.
Since 2000, the bank has provided $646 million for anti-poverty programmes in Pakistan, which does not include the funds approved on Thursday.
The programme, which had reached more than 2.5 million people, included funds for micro-credit loans and skills and enterprise development training.
The higher education support programme credit will support the government's initiatives to increase participation, enhance quality and relevance and strengthen the efficiency and financial sustainability of higher education institutions. In June, the bank approved an aid package of $900 million dollars for Pakistan, the bulk aimed at educational projects.
The interest-free IDA loan was specifically directed at improving education in Punjab and Sindh to scale up a community driven development project that already active in some 35,000 villages throughout the country.
The IDA loan comes from the International Development Association, which is a part of the World Bank that helps the world's poorest countries.

$4.3-bn World Bank loan for India to finance

infrastructure projects

The World Bank has approved $4.3 billion in loans for India to help finance infrastructure projects and support its economic stimulus programme.
"This money will be directed towards four projects," World Bank country director for India Roberto Zagha told reporters in a video conference Wednesday morning, adding: "This is a crucial time to support Indian economic recovery."
Emphasising on infrastructure development, Zagha said: "Today’s support will help maintain credit growth and continued infrastructure investments. Supporting infrastructure is particularly important during the current crisis, not just to sustain the domestic economy at a time of reduced global demand, but even more to lay the foundations for stronger future growth."
He said despite the uncertainty about the pace of the economic recovery, "current trends suggest that a growth rate of between 5.5 and 6.5 percent for 2009-10 is realistic".
The bank also sanctioned $1.2 billion for the India Infrastructure Finance Co Ltd (IIFCL) for financing public-private partnerships in infrastructure and to stimulate the development of a long-term local currency debt financing market.
"This loan will help IIFCL increase the availability of long-term finance for infrastructure projects across a range of sectors including roads, power, airports, and ports," said IIFCL chairman and managing director S.S. Kohli.
In addition, the World Bank sanctioned $1 billion to address India’s acute power shortages by assisting PowerGrid Corp, the national electricity distribution company, with its investment programme after a freeze in overseas lending.
The loan is expected to help PowerGrid strengthen five transmission systems in the northern, western and southern regions of the country. This will facilitate the transfer of power from energy surplus regions to towns and villages in under-served regions of the country.
"This loan will enable PowerGrid to strengthen the existing transmission system as well as expand the Indian national grid which will help the government of India achieve its objective of ‘Power for All by 2012′," said PowerGrid chairman and managing director S.K. Chaturvedi.
The bank also provided $150 million to Andhra Pradesh to improve water supply and sanitation services for 2,600 villages across six districts to provide piped water to 2.1 million people and extend sanitation services to one million people.
The World Bank said it would also provide $2 billion to India’s banking sector to expand the volume of credit available to firms.
Zagha said that as a result of the global financial crisis, private and foreign banks have slowed lending and deposit taking, increasing demand on public sector banks.
"This loan will help maintain credit growth levels, support social banking and employment growth, and help strengthen the economic recovery ahead."
The loans (banking sector and PowerGrid) from the International Bank for Reconstruction and Development (IBRD) have a 30-year maturity including a five-year grace period.
The IBRD loan to IIFCL has a 28-year maturity including a 7.5-year grace period.

Bernanke

noreply@blogger.com (muhammad) — Sat, 22 Aug 2009 10:49:00 +0000

Bernanke Reviews the Past Year of Crisis

Federal Reserve Chairman Ben Bernanke spoke today at the Kansas City Federal Reserve Bank's Annual Economic Symposium in Jackson Hole, Wyoming. His review of significant crisis points during the past year as well as the policy responses provides an instructive look-back at "the most severe financial crisis since the Great Depression." He optimistically concludes that we are "beginning to emerge" from the "deep global recession."

Americans Cutting Back on Credit Cards More Than Others

Amber Nelson

In a new survey commissioned by international lender ING Direct , it appears that Americans are far more likely than their European counterparts to cut back on their credit card use during this recession in order to save money. A full 46 percent of Americans surveyed said they are refraining from charging their purchases with plastic, a much higher percentage than any of the other eight included countries had. For example, only 11 percent of Germans and 17 percent of Italians said they were doing the same. “Whether it’s at home, in the boardroom or in the car showroom people...

Student Loan Repayment Plans

Student loan repayment can be accomplished via any one of a number of different repayment plans. The loan repayment plan that goes with your loan will depend on a number of different factors such as the total loan amount and your personal needs. The standard student loan repayment will allow you to pay a fix monthly payment. The loan term cannot exceed 10 years, but it can be shorter and the minimum monthly payment will be $50.00
Extended Loan Repayment
This extended plan works like the standard loan repayment plan, with the major difference being the time period of the loan. The loan period can be anywhere between 12 and 30 years.
Graduated Loan Repayment
With the graduated student loan repayment, the loan repayment term is between 12 and 30 years, but your payments will start off low, and will then subsequently increase each year. Under this repayment plan, the monthly payment can never be less than half of the amount the standard loan payment would be, nor can it ever be more than 1 ½ times the standard loan repayment amount. Additionally, the minimum loan payment must be at least the interest that accrues, as well as a minimum of $25.00
Income Contingent Loan Repayment
Student loan repayment under this plan will factor in the borrowers income, and the total monthly debt that they have. The monthly payment will be readjusted every year. The term for this loan repayment can be up to as many as 25 years. Payments are a minimum of $5.00 per month and the plan is only available to those who borrow directly. At the 25 years maturity, any balance that remains will be charged off. Under the law, this charge off is treated as taxable income to the borrower.
Income Based Loan Repayment
Income based student loan repayment was introduced as part of the College Cost Reduction Act of 2007. This program works very much like the income contingent repayment plan except with this one, the monthly payments are capped using a lower percentage and a narrower definition of discretionary income. This program is available to both direct borrowers as well as FFEL programs.
Student loan repayment can be made for all federal education loans with no early repayment penalty. Though you will have to check with each individual lender for details pertaining to their policies, plans can generally be changed once each year. Be sure that you are able to meet the loan terms when you do change.

What's Going On at Stanford International Bank?

noreply@blogger.com (muhammad) — Thu, 18 Jun 2009 07:51:00 +0000

What's Going On at Stanford International Bank

Ray Pellecchia and I think that if Harry Markopolos had put his theories about Bernie Madoff online, Madoff would not have been able to continue his scam much longer. Against that, a lot of people are saying that no matter how detailed Markopolos's analysis, without the backing of a large institution like the Wall Street Journal or the SEC, nothing would have happened.
So it'll be interesting to see what happens now that Alex Dalmady has gone public with his suspicions about Stanford International Bank, an Antigua-based private bank with $8 billion in assets. Dalmady's report can be found here; it makes for quite a rollicking read, and if I had any money with SIB I'd be asking some pointed questions right now.
Stanford International Bank has nothing to do with the university, but everything to do with a Texan billionaire cricket tycoon (yes, really) named Sir Allen Stanford. (His knighthood was the first ever bestowed on an American by the government of Antigua.) Stanford has close ties with Venezuela's monied classes, who reportedly have some $3 billion in his bank; the Caracas branch of his bank was raided in November by the Venezuelan authorities, who accused him of being a US spy.
But the Americans don't seem particularly enamored of Sir Allen either: the SEC started issuing subpoenas to Stanford Group in July, after two employees quit, saying "that the company gave clients false historical performance data for its securities".

As you can see, Stanford manages to report extremely consistent returns every year, and it even managed to make a 6% profit on its portfolio in 2008. Which is extremely impressive, given what happened to just about every asset class last year. And which is even more impressive given that Stanford International Bank is a bank which doesn't make loans.
SIB, it turns out, is a very peculiar fish indeed: it offers extremely high interest rates on its deposits -- on the order of 7.5% for a one-year CD. It then takes that money and, rather than lending it out at a higher rate still, invests it in stocks and hedge funds and commodities and the like.
If that sounds dangerous to you, ask yourself whether you'd be remotely reassured by the "Depositor Security" section of Stanford's website:
SIB has seen consistent profitability and growth every year since the Bank was founded. After first paying its clients a premium return on their deposits and then rewarding employees for their performance, the Bank has reinvested every dollar earned back into retained earnings. This has continuously strengthened SIB's capital base for future growth and is a significant difference between SIB and other international banks.
Basically, this is Allen Stanford -- the bank's sole shareholder -- saying "I'm a billionaire, I'm good for the money".
There's much more in Dalmady's report than just suspiciously good returns, however. Check this out:
The bank has 75 employees on the island. But a small group manages it. There is mention of an investment committee, but the members of the committee are not named. A few years ago there was an actual investment manager or VP; now the position appears to be vacant. There is one board member, an 85-year-old cattle rancher and used car dealership owner who has the title of "Investments"...The financial statements of the bank are audited. The auditor is a local (island) firm. The principal is a 72-year-old gentleman who has been auditing the bank for many years (at least ten). PriceWaterhouseCoopers and KPMG have offices on the island, and it is a good internal control practice to change auditors every few years, but the bank prefers to stick with its trusted firm. The banking authorities which supervise the bank are those from the island. The same island with the population similar to Altagracia de Orituco. The bank does not take institutional deposits or deposits from other banks. This is not necessarily a bad thing, but corporate depositors would be expected to do some due diligence on the bank before committing their money.
Right now, Dalmady's report has been picked up mainly by the Latin blogosphere (see here and here for starters). That makes sense, given that SIB's investors are mostly Latin Americans looking to keep their money offshore.
Now the SEC has been looking into Stanford since July, and hasn't announced anything, so maybe there's really nothing to see here. I have a call in to Stanford's spokesperson, Lula Rodriguez; I'll let you know if and when she gets back to me. But certainly the world is more attuned to the possibility that its financial institutions are dodgy than it was even a few months ago. So maybe the real scrutiny of SIB is only beginning.
Update: Brian Bertsch, director of press relations at Stanford Financial Group, phoned me with this statement:

Business Loans

noreply@blogger.com (muhammad) — Sun, 26 Apr 2009 18:02:00 +0000

Bank loans

Bank loan providers want to see a proven track record before they lend you any money, but you can't establish the track record until you get the loan. In order to get funded you have to know exactly what they are looking for? Most bankers look at the five C's:
Character. What is your credit history. Have you been a good borrower?
Capacity. Do you have any industry experience?
Capital. How much money do you need? Is there a clear understanding of the amount of funds needed and where it will be spent.
Conditions. What are the terms of the loan? The loan terms should be structured so that they can be paid back without overly restricting cash flow.
Collateral. What can you bring to the table? In many cases, you should be able to provide up to 30% percent of your capital need in cash and/or other assets.
Bank loans are extremely difficult to obtain and they are usually only given to businesses with outstanding credit and a proven track record. If local banks have determined you don't meet the five C's criteria or if they can't provide enough financing, there are probably non-bank sources in our directory who can. Due to the large number of non-bank lenders, it can seem like a daunting task to have to search through them and find the right one. Our capital search tool makes it easy to find the right type of financing for your business.

Payday Loans

noreply@blogger.com (muhammad) — Sat, 28 Mar 2009 09:53:00 +0000

Payday Loans a Steady Financial Application

For Immediate Release
Personal Payday Loan announced this week that a payday loan is solid financial tool for consumers that need additional cash for any situation. A large majority of consumers surveyed show that they actually favored payday loans over other alternatives, because they are more convenient, offer quick approvals, and are much less paperwork than any other financing options.
The survey states that payday loans are being used with medium frequency as well as being the more preferred method for visitors to finance short-term needs and projects. On average, the majority of visitors commonly use payday loans about eight times per year. Also, 94% of those surveyed indicate, payday loan companies offer an applicable service, which indeed furthers supporting the facts of payday loans as a useful application to visitors from all around.

Bank Loan Losses

noreply@blogger.com (muhammad) — Wed, 25 Feb 2009 05:49:00 +0000

How Do You Recapitalize $1.8 Trillion in Bank Loan Losses?

I've been having a look at Nouriel Roubini's estimate of a total of $1.8 trillion of losses in the US banking system, compared to just $230 billion in TARP recapitalizations to date and $200 billion of new money from private-sector sources. And while I might niggle with a few of the numbers he uses to reach that $1.8 trillion number, there's nothing there which is obviously crazy: it's very much within the realm of possibility.
There's no one huge number which accounts for most of the $1.8 trillion, although the single scariest one is probably the $295 billion that Nouriel reckons banks are going to lose on their commercial and industrial loans -- a number which doesn't even include another $35 billion in leveraged loan losses or $127 billion in mark-to-market losses on high-grade and high-yield corporate debt which ended up on US banks' balance sheets despite the fact that it was securitized.
Nouriel uses a naive view of the Markit ABX, TABX, and CMBX indices to work out the mark-to-market value of asset-backed bonds; I'd quibble with that. On the other hand, there are lots of potentially dodgy assets which Nouriel isn't including in his calculations, including sovereign debt, municipal debt, and -- biggest of all -- loans extended by US banks to foreign companies and individuals. We've already been through a round of European banks taking big losses on their US assets; we haven't even begun to see US banks take losses on their European assets, or their loans to formerly-flush companies in commodity-rich countries like Russia, Brazil, and Australia.
It's worth bearing Nouriel's numbers in mind when reading Tim Geithner's testimony from this morning:
The tragic history of financial crises is a history of failures by governments to act with the speed and force commensurate with the severity of the crisis. If our policy response is tentative and incrementalist, if we do not demonstrate by our actions a clear and consistent commitment to do what is necessary to solve the problem, then we risk greater damage to living standards, to the economy's productive potential, and to the fabric of our financial system.Senators, the ultimate costs of this crisis will be greater, if we do not act with sufficient strength now.In a crisis of this magnitude, the most prudent course is the most forceful course.
"The most forceful course" is clearly not the incrementalist one of adding to Paulson's TARP here, throwing in a few tax cuts there, announcing some big public works, and hoping for the best. The cost of recapitalizing the banking system alone -- to say nothing of the losses elsewhere within the shadow banking system -- might well be larger than Obama's entire stimulus plan.
Now those costs don't need to be paid for in cash dollars. Government guarantees, whether they arrive implicitly, through nationalization, or explicitly, through loan acquisition and the creation of a ring-fenced "bad bank", can do a lot of good at zero up-front cost. But given the commitment that both Obama and Geithner have made to transparency, I do hope that they're very clear about the real present value of such guarantees -- a sum of money which could easily run into the hundreds of billions of dollars.
But most of all, given the implosion in the Citigroup and Bank of America share prices after they got bailed out with government loan guarantees, I hope that Geithner has learned that ad hoc solutions are a recipe for disaster. I look forward to an announcement, soon, of something big, coherent, consistent, and transparent. Not that Geithner gave any hint of having any such thing in mind during today's testimony.

ICICI Bank cuts home auto loan rates

noreply@blogger.com (muhammad) — Sat, 10 Jan 2009 17:56:00 +0000

ICICI Bank

In a New Year bonanza to home and car loan takers, the country’s largest private sector lender ICICI Bank on Wednesday (December 31) reduced the benchmark lending rate by 50 basis points for existing as well as new borrowers.
The benchmark Advance Rate (I-BAR) has been reduced by 0.5 percentage points to 16.25 per cent with effect from December 31, ICICI Bank said in a statement, adding that the fixed deposit rates will be reduced by up to 75 basis points. The floating rate for home and auto loans has been slashed from 14.25 per cent to 13.5 per cent benefiting all the existing customers, it added.
The interest rates on fixed deposits of various tenures have also been cut by 0.5 per cent to 0.75 per cent, it said. The decision comes with in days of ICICI Bank’s CEO and Managing Director K V Kamath announcing a New Year gift to its customers as low interest regime is good for the economy.
Earlier this month, the bank had cut the lending rate for new home loan borrowers up to Rs 20 lakh by 150 basis points. The decision comes in the wake of a similar announcement made by its peers in the public sector like the State Bank of India, Punjab National Bank and Bank of Baroda.
Following liberal monetary policy announced by the RBI in the first week of December, even its closest private sector competitor HDFC Bank had reduced its benchmark lending rates by 50 basis points to 16 per cent. PNB, earlier this week, had said “the benchmark prime lending rate would come down to 12 per cent from the existing 12.50 per cent.”
Besides, PNB also had announced a reduction in its peak deposit rate by 100 basis points to 8.5 per cent for deposits of one year to less than three years. Accordingly, interest rates in the time buckets having maturities of 46 days and above have also been cut by 25 basis points to 125 basis points, it had said.
Earlier during the day, LIC Housing Finance announced reduction in interest rates up to 75 basis points for the existing home loan borrower’s consequent to a reduction in cost of funds. New customers of the LIC Housing Finance would continue to get loans at an offer rate of 9.25-9.75 per cent for loans up to Rs 20 lakh.
Meanwhile, public sector housing finance firm Housing and Urban Development Corporation has also reduced interest rates on home and project loans by 50 to 125 basis points with effect from January 1. For home loans up to five years, the interest rate has been lowered to 10.25 per cent from 11.50 per cent, a cut of 125 basis points, while home loans with payback period beyond five years, the interest rates have been cut to 10.75 per cent from 11.75 per cent.
Besides, Bank of Baroda and Dena Bank also decided to reduce its BPLR by 75 basis points to 12.50 per cent and 12.75 per cent respectively from tomorrow. To prop up demand in the housing sector, all the PSU banks have implemented special housing loan scheme under which the fixed home loan of up to Rs five lakh would attract interest rate of 8.5 per cent.
Also fixed rate for loan above Rs five lakh to Rs 20 lakh for a maximum period up to 20 years, the interest rate has been pegged at 9.25 per cent. The interest rate will be subjected to reset on July 1, 2014 for the scheme.
(With inputs from agencies)
( This post is from an independent writer. The opinions and views expressed herein are those of the author and are not endorsed by APakistanNews.Com.)

U.S. Bank Loan System Allows Counterfeiting of all Money Loaned

noreply@blogger.com (muhammad) — Wed, 10 Dec 2008 06:21:00 +0000

LOAN SYSTEM NEEDS REFORM -IT'S THE PEOPLE'S MONEY

by Alistair McConnachie
Politicians need practical proposals which are understandable and do-able. Here is a proposal intended to bring the Money Reform issue into the political debate, draw policy-makers into the argument, and put Money Reform on the political agenda. Let's work through it, step by step.
THE PRINCIPLES ... OR "WHAT DO WE BELIEVE?"
1- That the present method whereby virtually all money comes into society as an interest bearing debt to the banking system is contrary to the democratic imperative that the creation of money should be a public service, under public control for the public good.
This democratic imperative can be summed up in the slogan: It's the People's Money.
As Richard Greaves stated (Prosperity, Nov 2001):
"For as long as the power to create money is in the hands of private interests who do it for profit and control, we can never say that we live in a democracy."
And as Bryan Gould, former Economics Spokesman for the Labour Party said in the New Statesman (19-2-93):
"Why shouldn't a socially aware and economically responsible government createcredit where it is appropriate ... in order to ensure investment is made and at the same time strike a great blow for the democratic control of the economy?"
2- That since the government can issue a security -- which is, in effect, an IOU written by the government to the banks -- then the government can create the same amount of money directly and debt-free, without borrowing from the banks.

Obtaining Bank Loans in this Economy

noreply@blogger.com (muhammad) — Sun, 30 Nov 2008 13:02:00 +0000

Obtaining bank financing in this environment is different than it has been in the past 5 years though not impossible. Understanding how to approach a banker in this economy is crucial to success.Recently banks required 3 years financial statements, 3 years tax returns and personal financial statements in order to loan a company money. Now they are wanting much more information. They are now focusing on the soft issues; management team, marketing plan, operations, etc. They are looking for companies that have a good strategy and management team in addition to good underwriting criteria.

In addition to the Five C's of banking they are looking for companies with - Discipline- Credibility- RelationshipsWhen approaching bankers character is returning as a big factor in who they are going to loan money to.Finally, with capital so tight interest rates are not as important or negotiable for loan. At prime rate so low the interest rate is not a factor. What is important to banks and to the entrepreneur is debt covenants.Two of the most important debt covenants to banks are the ones related to cash flow and collateral coverage. These two areas limit the amount of leverage that your company can achieve.

Construction Costs Are Going Through the Roof

Recently I have been visiting with several general contracting clients regarding the challenges they are facing. Both complained of the dramatic rise in construction costs in the face of a softening economy. Over the past 6 months construction costs have been increasing 1% - 2% per month for an annualized inflation rate of 12% to 20%. These increases have made it difficult to manage the budgets for their projects. Projects that were awarded 6 months ago have seen dramatic price increases in almost every area. Steel prices, as we mentioned, have seen the most dramatic increase. In some projects the steel component has increase 50% over the past six months. But that is not the only area. Equipment rental, PVC pipe (made from petrochemical feedstock), copper wiring and other basic material have all seen increases. Finally, delivery costs to get the material to the job site have followed the price of gasoline.So how are they managing the situation? One strategy is to lock in their subs prices within seven days of being awarded the contract. One contractor notified the sub on the eighth day and received a price increase of $20,000. He later negotiated it back down to $2,000 (which he couldn't pass on to the customer.)Other strategies include negotiating price increases with customers or factoring in modest price increases in their original bid. Either way it will be interesting to see how rising replacement cost vs falling demand affects real estate values.

Total Bank Loans and Leases Reach New Record

noreply@blogger.com (muhammad) — Sun, 30 Nov 2008 12:53:00 +0000

According to banking data from the Federal Reserve that was updated today, Total Loans and Leases of Commercial Banks in the U.S. continue to grow, and have doubled from $3.5 trillion in 1999 to $7 trillion in 2008. On a monthly basis, Total Bank Loans and Leases exceeded $7 trillion for the first time in September 2008, and reached $7.258 trillion by the first week of October.
We keep hearing news reports that describe U.S. credit markets as being "tight," "frozen," "seized-up," "ultra-tight," "drum tight," etc. Why isn't that much-publicized credit tightness showing up in commercial bank loan data, which keeps setting record highs, and is now more than $7 trillion?

Bank loan to Bangladesh 4 secondary education

noreply@blogger.com (muhammad) — Wed, 26 Nov 2008 09:40:00 +0000

Bank loan to Bangladesh

$130 million US dollars will go to Bangladesh to improve secondary education in the country. - Kale The credit from the International Development Association (IDA), the World Bank's concessionary arm, has 40 years to maturity with a 10-year grace period and it carries a service charge of 0.75 percent, said a World Bank press release.The 'Secondary Education Quality and Access Enhancement Project' will finance activities in 121 Upazilas aimed at improving education quality and poverty-targeted stipends and tuition to girls and boys to increase access and retention.Although Bangladesh has recorded impressive achievements in the education sector significant challenges remain. Completion rate at the secondary level is as low as 20 percent and many poor children, especially boys, are still left out of the secondary school system, the press release added.Female enrollment in the secondary schools increased from 1.1 million in 1991 to 4.4 million in 2006 after an innovative World Bank financed initiative 'Female Secondary School Assistance Project' was launched in 1993, it said.Schools and families received cash incentives under this project to keep girls in secondary school through completion."Achievement of high quality secondary education is a critical foundation for higher levels of education and skills which are likely to have a significant impact on economic development", said World Bank Country Director for Bangladesh, Xian Zhu."This project will ensure that poor children are not left out of the secondary school system. Importantly, it will also enhance secondary teacher and student performance, as well as in making schools more accountable to the community

Banks make provision for bad-debts

The top banks in South Africa are increasing their provision for bad debts because of more people failing to keep up with home loan repayments, caused by the high interest rates and increasing inflation.
Absa, Nedbank, Standard Bank and First National bank all confirmed that they were preparing for an increase in bad debts and doing everything to ensure consideration of repossession of property as a last option

How To Get A Bank Loan With Ease ?

noreply@blogger.com (muhammad) — Fri, 07 Nov 2008 07:16:00 +0000

If you are a first-time entrepreneur and you want to start your own business you are almost undoubtedly going to need a bank loan. Here are some tips on getting one. You must realize that because you dont have a business ownership track record securing a bank loan will be an uphill battle. That doesnt mean you shouldnt try but dont expect the process to be a cake walk. It wont be. Any bank will tell you that a small business loan has risk factors and that costs of servicing these smaller accounts are primarily responsible for their disinterest in offering a bank loan to an aspiring entrepreneur.Your first time business bank loan can happen, however, and here are some ideas on how to increase your chances of getting that small business bank loan. The first thing to remember is to think positive and assume you are entering that bank from a position of strength. Keep in mind that you are customer, not a beggar. Banks sell loans, you buy. For the most part those banks want and need your loan business and the loan officers are tasked with getting your business. While it certainly is always a good idea to start with the bank that is familiar with you as a person - the one with which youve done business regularly - it is also important that you seek a bank that has underwritten loans for others in your industry and stays familiar with your industry. Look for banks that actively finance small businesses.There are also banks whose specialty is government programs - participation by the government in funding or guaranteeing loans. Information on the latter would be readily available at your local Small Business Development Center of the Small Business Administration (SBA.)Keep in mind, however, that no matter how dedicated to small business financing, the bank is going to ask for some fairly hefty collateral for your start up business. Be prepared to prove to that bank loan officer that lending you and your new company money is not a high risk proposition.Complete your loan application prior to arrival if you can, bring copies of three years of financial statements such as cash flow, testimonials from satisfied and returning customers, your business plan and a cover letter that spells out why you need the money and how your business is now thriving and will only do better with that bank loan funding.If you are fully prepared to ask for that bank loan, no question should surprise you. While you should have the details in your business plan already, be prepared to talk about how much money your firm will need and for how long, and what the bank loan funding will be used for. You'll need to talk about whether you are going to buy new equipment, supplies and assets, pay off some old bills, or spend it on operating expenses. Youll also need to show a well-thought-out and achievable repayment plan, with a payment schedule.Two important points that should be made about your face to face bank loan interview are often discounted. The first is that you should dress professionally to meet the loan officer. Your garb should be that you would wear to meet a client. The other is that your documents should all be neat, easy to read, clear and clean.

Should World Bank Loans Be Made to Middle Income Countries Such as China?

A controversy is brewing over the question of whether World Bank loans should be made to middle income countries such as China that have international capital market access. Of course part of this controversy is pure sheer U.S. mercantilistic protectionism. National security hawks that were instrumental in sabotaging the CNOOC bid for Unocal based on far fetched national security arguments are now taking aim at World Bank loans to China making the really convoluted, concocted and incorrect argument that World Bank loans allow China to then buy U.S. assets galore and/or spend more on its military build-up.

World Bank

noreply@blogger.com (muhammad) — Fri, 07 Nov 2008 07:13:00 +0000

The World Bank provides over $20 billion in assistance to developing and transition countries every year. The Bank's projects and policies affect the lives and livelihoods of billions of people worldwide - sometimes for the better, but very often in controversial and problematic ways.
The World Bank was originally established to support reconstruction in Europe after World War II, but has since reframed its mission and expanded its operations both geographically and substantively. Today, the Bank's mission is to reduce poverty. It has over 184 member countries and provides over $20 billion annually for activities ranging from agriculture to trade policy, from health and education to energy and mining. The World Bank provides funding for bricks-and-mortar projects, as well to promote economic and policy prescriptions it believes will promote economic growth. For example, part of the over $300 million the Bank is currently providing the West African country of Niger funds health programs addressing HIV/AIDS and irrigation. However, the Bank also promotes more controversial projects in the country, like privatization of state enterprises.
The World Bank is not a bank in the common sense of the word. A single person cannot open an account or ask for a loan. Rather, the Bank provides loans, grants and technical assistance to countries and the private sector to reduce poverty in developing and transition countries.
The World Bank Group is actually comprised of five separate arms. Two of those arms - the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) work primarily with governments and together are commonly known as "the World Bank". Two other branches - the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) - directly support private businesses investing in developing countries. The fifth arm is the International Center for Settlement of Investment Disputes (ICSID), which arbitrates disagreements between foreign investors and governments. This webpage outlines key features of the two arms that are now collectively referred to as the World Bank: IBRD and IDA. Find out more about MIGAand the IF (BIC website).

BIC's work

People and communities have a right to understand what the World Bank is doing in their country, and participate in and influence the development of Bank projects and policies. Bank Information Center activities to promote these goals include

investigating problematic Bank-funded projects that are negatively impacting people and the environment
participating in World Bank policy reviews, and promoting increased transparency, accountability and public participation in the institution's operations
tracking thematic issues such as human rights, climate change and governance, constantly challenging and expanding the dominant discourse around these important topics
providing hard-to-obtain information about the Bank to concerned individuals and organizations, thus expanding access to and understanding of the institution and its impacts

International Monetary Fund

noreply@blogger.com (muhammad) — Fri, 07 Nov 2008 07:05:00 +0000

BIC's new IMF Program supports and assists global civil society in informed engagement on macroeconomic policies supported by the IMF. The program aims to stimulate wider public debate on the IMF’s new priorities as well as existing and future operations with a particular focus on identifying opportunities for reform.

The IMF: A brief history

The International Monetary Fund was established in 1944 at the Bretton Woods conference. It was conceived alongside the World Bank, to provide a framework for international economic cooperation.
IMF operations include surveillance of both member countries and the global economy; technical assistance; and financial support.

The IMF in crisis mode

The IMF is currently going through significant challenges as an institution. If approached correctly, these challenges represent opportunities for concrete reform and, for some, an opportunity to discuss whether or not the IMF in its current form should exist. These challenges are largely summed up as a relevance crisis and a budget crisis, at least in the medium-term.

Relevance crisis

In part, many core IMF functions (i.e., crisis resolution / “insurance” exchange rate management, financial policy advice, and surveillance) are being carried out through alternative arrangements/mechanisms, including inter alia: higher levels of foreign reserves, new regional/bi-lateral lending arrangements, and remittances from citizens abroad. The unprecedented build-up of foreign reserves, particularly in East Asia, is widely interpreted as being motivated, in part, by the determination to avoid having to turn to the IMF in case of financial crisis. Furthermore, greater liquidity in capital markets provides many middle-income countries with alternatives.
Furthermore, there are several substantial bi-lateral lending arrangements, such as: Venezuela to Argentina, oil-rich countries to needy Muslim nations (Middle East and Africa), and China to Africa (as well as other countries ). To add to the mix, there are also regional arrangements. Most notably, Asian countries have renewed efforts at establishing swap facilities between the region’s central banks to pool resources (currently around $70 billion) against speculative attacks .
Furthermore, increasingly the rules underpinning global financial governance are being set by private actors and groupings of national regulatory institutions, such as the International Federation of Accountants (IFAC), Inter-Agency Standing Committee (IASC) and the International Organization of Securities Commissions (IOSCO). In addition, the private sector is a source of frequent and up-to-date surveillance information, in contrast to the relative infrequent Article IV Consultations, which occur only every 12-18 months.

Medium-term budget crisis

Largely due to the high political and sovereign costs and the current state of the global economy, borrowing from the Fund is at its lowest level in decades. For example, significant IMF debtors that have declined further IMF assistance include: Pakistan (third largest), Ukraine (fourth largest), Serbia, and Azerbaijan. Furthermore, in FY2005 and 06 there were just 14 and 13 lending operations respectively – the lowest since 1975. Adding to the revenue shortfall confronting the Fund, many middle-income countries, including some of the IMF’s largest debtors, have already or plan to pay off their IMF debt well ahead of schedule, including: Thailand, Russian Federation, Brazil, Argentina, Indonesia, Turkey, and Uruguay.

Student Loans, Without the Bank

noreply@blogger.com (muhammad) — Wed, 05 Nov 2008 19:20:00 +0000

In these days of tightening credit and Wall Street nervousness about new ways of lending money, introducing an innovative online student loan service seems courageous indeed. But that is what Fynanz, Inc. has recently done. Fynanz takes the social network idea, and combines elements of eBay auctions and microcredit to offer students a new way of borrowing money for their studies, that involves neither banks nor the government.Fynanz's basic service is called the OpenLoan. Students (U.S. citizens or permanent residents) can take out an OpenLoan for their educational expenses only: tuition, room and board, books, computer, and associated living expenses. Individual loans range from $2500 to $20,000. Students can borrow up to $120,000 for an undergraduate degree or $160,000 for a graduate degree. OpenLoans have long-term repayment terms: Balances of less than $5000 run for 10 years; loans of $5000 or more have 20-year terms.Fynanz's terms may be generous, but the company isn't crazy. If a borrower is under the age of 21, without a verifiable income, or employed for fewer than 2 years, the loans must be cosigned. The cosigners, most often parents, must meet the criteria for an individual loan. Fynanz charges an upfront fee for borrowers and the company does not claim to have the lowest interest rates. In fact, the Fynanz site encourages borrowers to first check out federal student loans, which usually have lower rates, before borrowing from Fynanz.There's one more requirement for students: Fynanz gives each student a grade, called a Fynanz Academic Credit Score, or FACS. FACS is an index that quantifies academic achievement and loan history; the company says it's a better indicator of creditworthiness than the traditional credit score. FACS helps determine the interest rate that the borrower pays to the lender. In general, the company says, the higher the FACS, the lower the risk to the lender, and thus the lower the interest rate to the borrower.Once approved and FACS-graded, students can then enter the Fynanz marketplace, where lenders evaluate the borrowers and bid on lending money to students. Students create and post profiles discussing their academic backgrounds, work history, extracurricular activities, FACS score, and loan requirements. The profiles can also include photos. (Here's a hint: Be more judicious in your choice of photos on Fynanz than on Facebook.)Lenders can be anyone who wants to put their money directly into the education of individual students, but Fynanz also takes some of the risk out of the deal. While lenders can be total strangers to the students, Fynanz encourages family and friends to bid on the loans to help create competition and drive down the interest rate. This part of the Fynanz service adopts the microcredit idea of social pressure to encourage loan repayment. The experience of Gramee Bank and other microlenders suggests borrowers are less likely to default on a loan from someone they know than a total stranger. To further encourage lenders to use the marketplace, Fynanz guarantees the loan from 50 to 100% based on the borrower's FACS grade.Please note that because Fynanz is a new service, it still needs to get approval from most state authorities, and right now it's available only to borrowers who are residents of New York and Florida. Borrowers from New York and Florida can attend a university in any state, and lenders likewise can come from any state. The company plans to enlarge its operating area as it gains states' approvals.Will the Fynanz idea succeed? Only time will tell, but it seems like a better business proposition than sub-prime mortgages.

World Bank Loan In Rupees

noreply@blogger.com (muhammad) — Wed, 05 Nov 2008 19:14:00 +0000

The BBC reports that the World Bank is considering the first ever proposal for a loan of $3.5 billion to be disbursed and repaid in rupees and not the US dollar. This is being done to ostensibly counter the fluctuating rupee- dollar rate. However, it needs no saying that a continually strengthening rupee and forecasts of a double-digit Indian economic growth make the proposal extremely lucrative for the World Bank.
The Maharashtra state government is seeking a loan worth some $3.5bn but is concerned about the fluctuations in the value of the dollar.
If approved, it would be the first time the World Bank has agreed to a such a loan in rupees.
The idea is that the loan would be sanctioned in dollars, but would be handed over in rupees.
All repayments would be in rupees too.
This would prevent any changes in the amount to be repaid caused by fluctuating exchange rates.

Lawsuit Loans - A Review and Guide

Oddly enough, lawsuits cost mone. Usually lots and lots of money, and for many people it may be difficult, if not impossible to cover the expenses of litigation so you can seeit to its conclusion. As a result, an entire industry has formed around this need, providing litigation fundin to clients who want to keep their lawsuits going. Any Lawsuit is one of the newer loan services offering funding for various types of lawsuits, and is the subject of this review.
A division of Alpine Fundin, AnyLawsuits.com is currently in the process of a redesign, but so far their site has been easy to rea and navigate, complete with a FAQ section that offers more details on how their funding service works. They also accurately explain that “lawsuit loans” aren’t actually loans, but are really cash advances, so the terms of agreementfor this type of funding will be different from what you would expect from a typical bank loan.
Unfortunately, it was hard to garner how good the reputation of this lending company was. The site offers no testimonials from previous clients, and a search inquiry at the Better Business Bureau was unable to turn up any more information. In addition, there was little information as to what the terms of their cash advances might be, other than that you would be required to pay some type of flat fee once you receive a settlement. While this fee is sure to vary from case to case, it would help to give the visitor some general idea of how much he or she might be expected to pay in order to receive litigation funding, and outline what the typical conditions of their contract would be. Such disclosure should go far in establishing trust with current and potentially new clients.
A word to the wise though: litigation funding as a whole is not cheap, and according to financials experts should only be seen as a last recourse. How much you will pay back for such cash advances will depend on the provider, but usually there is either a recurring interest fee you will pay per month, based on the amount of the cash advance, or you will pay a flat fee once the lawsuit is settled. The interest rates can often be high, and since this type of lending is not subject to usury laws, the propensity for abuse is enormous. Say you were to receive $10,000 in funding, with a recurring fee of 10% per month. That’s a $1,000 you’ll pay out of pocket every month until your lawsuit is concluded. And if a lender is particularly shady, you may get hit with all types of unexpected fees while your

Dems Hit Terry on Bank Loan

noreply@blogger.com (muhammad) — Wed, 05 Nov 2008 19:13:00 +0000

Rep. Lee Terry (R-Neb.), who found himself locked out of $100,000 in campaign money as the financial crisis hit, has come under fire from Democrats in his state for taking out a $100,000 bank loan to cover the unavailable cash.
In September, Terry found himself locked out of $100,000 in campaign money invested in the Reserve Fund when the giant money market fund was unable to pay its customers. Terry’s campaign took out a $100,000 loan from Sherman County Bank Oct. 24 to make its final TV and direct mail purchases of the campaign, Lee Campaign Manager Dave Boomer told The Hill.
When the loan was reported in the Omaha World-Herald last week, the Nebraska Democratic Party wasted no time in using it to hit Terry.
“At a time when Americans are struggling to obtain credit, Lee Terry apparently had no trouble securing a $100,000 loan when his campaign hit hard times," said Eric Van Horn, Communications Director of the Nebraska Democratic Party. "This loan raises serious questions. Did Lee Terry receive a sweetheart deal?”
The Nebraska Dems questioned whether Terry’s $100,000 prevented the bank from lending to any homebuyers or students seeking loans.
Lee's challenger, Democrat Jim Esch, seized on the frozen funds to blast Terry's support for Social Security privatization.
"Congressman Terry's decision to invest in a money market fund was a gamble and he lost. Now he wants to make the same gamble with our Social Security," the campaign said in a statement released Friday.
When asked for comment by The Hill, Terry's campaign was quick to point to the $15 million loan taken out by the Democratic Congressional Campaign Committee (DCCC) Sept. 8.
“This is a last-minute smear by Democrats. If they're concerned about the availability of loans then they should attack the DCCC,” Boomer said.
With the loan, Terry had just under $330,000 cash on hand compared to Esch's $110,000, as of Oct. 15. The closeness of Terry and Esch's race has been disputed by various parties and polls. A poll conducted for Esch's campaign in mid-October showed Terry leading by one percentage point, though Terry's campaign disputes its methods, while a Daily Kos/Research 2000 poll in early October showed Terry leading by 10 percentage points.
Terry, meanwhile, is hammering Esch for telliMSNBC today that he "probably would" vote against the Freedom of Choice Act supported by Barack Obama, which would guarantee abortion rights for American women whose pregnancies have not reached the point of viability.
Esch declares himself a "pro-life Democrat" who opposes abortion and embryonic stem-cell research. Boomer called Esch's statement a "major blunder."

Ugly Aardvarks and Non-Stellar Constellations

noreply@blogger.com (muhammad) — Tue, 04 Nov 2008 12:36:00 +0000

Posted on October 28th, 2008 in BREAKING NEWS!
The subprime crisis is catching up fast to Mizuho Financial Group as Japan’s second-largest bank does a 180, going from a share buyback to mulling over raising capital. Don’t be fooled by the feigned denial; the bank has no choice since earnings are souring and they’ve poured $1.2 billion into the black hole known as Merrill Lynch.
Mizuho Financial Group Inc. led Japanese banks lower in Tokyo trading after it was downgraded by JPMorgan Chase & Co. and a report said the lender may delay a share buyback due to lower-than-forecast earnings.
As recently as 2006 Mizuho Financial Group was back on its game, becoming the first Japanese lender to list on the New York Stock Exchange since 1989.
The listing of Mizuho’s ADRs on the NYSE is clear evidence of a new era for Mizuho Financial Group and its return to the world stage,” said Mizuho Financial Group CEO Terunobu Maeda. “It is also a symbol of the revival of the Japanese banking industry, following the long and difficult period of consolidation and reform.
So, after the years of struggle to get back on top, what made the bank decide to jump into the sub prime waters, and what did they want with Merrill Lynch? The standard line is that it was cheap, but an insolvent bank should be cheap since it’s void of earnings. Was it just coincidence that John Thain, who was CEO of the New York Stock Exchange, welcomed Mizuho aboard?
“We welcome Mizuho Financial Group, Inc. to our family of listed companies,” said NYSE Group, Inc. CEO John A. Thain. “It is fitting for Mizuho Financial Group, one of the largest financial institutions in the world, to take its place among the world’s leading companies. We look forward to providing the company and its shareholders with the highest levels of market quality and services.”
Did Thain collect on a favor earned back in the NYSE day? Or did it just enhance his chances to pull Mizuho in? There is no way to know, but what happened next can be viewed as a microcosm of Wall Street’s infinite greed.
It begins with a young but ruthless whiz kid to whom Wall Street’s amoral tenets came easily, as did those of the 144-year-old bank to which he parasitically attached.
Alexander Rekeda, a 34-year-old Ukrainian-born math whiz, turned in his BlackBerry and security card and sent an e-mail to his bosses at Calyon, the investment- banking unit of Credit Agricole SA. Then, along with ten colleagues from the New York structured-finance team, who fired off similar messages, he walked two blocks down the Avenue of the Americas to Mizuho Financial Group Inc.
It was Dec. 8, 2006, and Rekeda’s arrival was a coup for Mizuho, Japan’s second-largest bank by revenue.
Rekeda’s arrival nearly killed Mizuho.
While Mizuho was a newcomer to the CDO market in the U.S., it had experience arranging and selling similar investments in Japan and Europe. The company had ramped up its loan- securitization business, which Japanese banks were able to do without borrowers’ consent after October 1998. Merrill Lynch & Co., Bear Stearns Cos. and Goldman Sachs Group Inc. all helped Japanese banks repackage and market securities backed by corporate loans and mortgages.
That the bank was paying big fees to the Wall Street Godfathers implies that management intended to make its inroads into the CDO trade in the customary manner - with fees, favors, payoffs and kickbacks. When Mizuho decided too widen those inroads, the bank did not intend to rock the boat. But Rekeda had other vastly different ideas: it was the group he led that ran roughshod over Mizuho and its 63-year-old home gardening CEO, Terunobu Maeda.
By the time Rekeda and his cabal were pushing out the CDOs for Mizuho, subprime loans were imploding as Maeda and management were clueless.
On Dec. 11, 2006, the same day Mizuho announced it was setting up an office in the U.S. to create asset-backed debt securities, Fitch Ratings said the outlook for U.S. subprime mortgage bonds was “negative.” It expected delinquencies on those loans to rise by 50 percent.
Rekeda should have stopped pedaling the toxic devices for the bank’s best interests, but we did say that he had vastly different ideas. Witness:
There was also confusion about the hiring deal. The Calyon team turned out to include more than the five people expected by Hitoshi Shimoyama, then deputy president of investment banking unit Mizuho Securities USA Inc., documents in the case allege.
“Mizuho did not even know the number or names of additional persons until shortly before they came,” Shimoyama said in a March 17, 2007, affidavit.
But on Wall Street, profits are religion and 34-year-old whiz kids don’t become billionaires by putting the bank’s or the client’s interests before their own. And so Rekeda and his group went for the fees and sold the dope.
Rekeda’s group priced its first deal within 10 weeks, after the Mortgage Bankers Association reported that the default rate on U.S. subprime loans reached 12.6 percent, the highest level since the first quarter of 2003.
Rekeda planned to bring at least nine more CDO deals to market within six months, the investment newsletter Asset-Backed Alert reported on May 11, 2007. The newsletter quoted him saying the bank had “built up the pipeline.” As of April 1, 2007, Mizuho Securities had amassed more than 550 billion yen in residential mortgage-backed securities and CDOs supported by home loans, according to the bank’s financial statements.
One of those deals made it to market in June 2007: a special-purpose entity called Delphinus 2007-1. Although named after a constellation, its contents were hardly stellar. Three- quarters of its securities were based on subprime mortgages, according to a July 23 Fitch report.
But the one that burst for a $7 billion loss was named for something not so glorious; the CDO was called Aardvark.
The deal was named after a squat animal with a pig-like snout that feeds on ants and termites. Incorporated as a special- purpose company in the Cayman Islands, Aardvark ABS CDO was an ugly concoction: 31 percent of its $1.5 billion of securities were backed by subprime loans, 23 percent by residential mortgages repackaged from other CDO deals, and 33 percent by Alt- A mortgages, a category just above subprime. The remaining 13 percent were prime loans.
So, Mizuho was raided by Rekeda and never saw a Yen, Dollar or Deutsche Mark out of the subprime good times, but
Mizuho expects as much as 20 billion yen in potential further losses on bonds and bad loans related to bankrupt Lehman Brothers Holdings Inc., company spokeswoman Masako Shiono said on Sept. 16. Moody’s Investors Service, citing “questions regarding the effectiveness of Mizuho’s risk management and its risk appetite,” continues to give the bank a negative outlook.
Actually it was Rekeda’s appetite for risk, as he and his grabbed theirs, leaving the bank to fester in radioactive CDO sewage. Eventually two of Bear Stearns CDOs imploded, Mizuho stopped writing CDOs and the whole world would learn about special purpose entities drafted in the Cayman Islands. But that wouldn’t help the old bank left alone to pick up the pieces of its fallen empire.
Mizuho Financial Group spent nearly two lost decades to bring its house to order, but Rekeda needed only a year to wreck it again.
Rekeda, meanwhile, has moved on. He now works for Guggenheim Capital Markets LLC in New York, along with Paolo Torti and Xavier Capdepon, who both followed him from Calyon to Mizuho. Their new jobs: selling distressed CDOs at a discount.
Moved on as they always do, unlike like nature’s parasites who die when they kill their hosts, Rekeda is rich and happy to search for another.