The federal order slapped recently on US Century Bank is one of the harshest -- if not the harshest -- in FDIC history. It stakes out so many problems at the bank, the question begs to be asked: why not just shut down the bank? The question leads to others. Knowing the directors involved and their public personas, from founders Sergio Pino to Ramon Rasco, and insider dealing in Miami-Dade County, why did federal intervention take so long?
Are federal banking investigators, including law enforcement, completely mismatched to problem banks like US Century and its directors? How, for example, did a bank with such systemic problems as US Century (all detailed in the consent order) obtain only a few years ago the largest taxpayer bailout in the state of Florida? If the bank assets are rotten now, they were rotten then, so someone's trust was abused; and we are not talking about bloggers. We are talking about lots of people with accounting and law degrees and fiduciary responsibilities.
To meet the terms and requirements of the consent order, the FDIC imposed restrictions and conditions on bank operations -- many to be accomplished within 60 days -- that appear insurmountable. It would take an army of qualified bank managers to put the changes in effect so quickly, and the order is largely due to the lack of qualified managers.
There are so many unanswered questions; never mind 60 days, they couldn't be answered in 10 to 20 years.
5 comments:
Couldn't help but notice the headline from this morning, knowing that the thieves and crooks who crashed the national economy got many of their schemes from building in Florida swampland. I think they called it, "what the market wants".
China, a Big Creditor, Says U.S. Has Only Itself to Blame
By REUTERS
One of America’s biggest creditors, the Chinese government, said Saturday that the United States had only itself to blame for losing its top-tier AAA credit rating from Standard & Poor’s.
Beijing also used the downgrade to again call for a new stable global reserve currency.
“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” China’s official news agency, Xinhua, said in a harshly worded commentary.
Coming from a Country with such a fine Human Rights record - they can KMA! That global currency issue is old and won't work. Look at the situation with the Euro right now. That would be a sampling of things to come if we moved that way.
But, I do agree, we cannot continue to borrow our way out of this. We need to seriously cut the Federal Budget. And, yes, I know it will add to the unemployment rolls but we cannot keep this up any longer.
I find the timing of this "accounting discovery" on the part of Standard and Poor's to be highly suspicious. Conflict of interests with the same people they rate, who themselves hold short positions on US bonds? Bond trading by insiders within the rating company itself. I'd say the Justice Department should launch an investigation into these clowns, first over their role in pumping up worthless derivatives and selling them as AAA bonds to the public up until the collapse of Lehman Bros., and also for this sneak attack that they've mounted against this country.
As for US Century, word on the street is that they haven't even begun to do a comprehensive loan review of their portfolio. Their nonperforming loans stand at 15%, but given how aggressive they were in handing out loans to practically anyone, it is assumed that this number should skyrocket in the next few months. This means that their capital numbers, already very stressed, are going to take a big hit.
I give these guys another 6-9 months. $50 million in taxpayer bailout funds evaporated...
Well I guess the Cuban American community can be proud of another cuban american business involved in loan and mortgage fraud. Wow lets just add bank fraud to mortgage fraud and entitlement fraud in medicare, and lets not forget how many former elected leaders have been arrested or forced to leave elected office for criminal activity. Why dont we see any other ethnic group besides hispanics involved in all this criminal activity involving fraud against the government. Just another day in the hispanic fraud capital of the world.
The Cuban American community has not cornered the market on fraud. How about R. Allen Stanford and the billions he ran out of downtown Miami, with pictures of the Bush brothers on the walls. That said, it is true that Cuban American business leaders absolutely will not criticize or hold up to scrutiny these facts. Whatever happened to that anti-corruption drive that Cuban American leaders once tried to boost? Maybe the Chamber of Commerce should take that cause up. Just a thought.
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