This Time Is Different – By John Mauldin – Thoughts from the Frontline
The Statistical Recovery has Arrived
This Time Is Different
A Crisis of Confidence
Greeks Bearing Gifts
Biotech, Conversations and Babies
… And this is key. Read it twice (at least!): “Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence-especially in cases in which large short-term debts need to be rolled over continuously-is the key factor that gives rise to the this-time-is-different syndrome. Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang!-confidence collapses, lenders disappear, and a crisis hits. … –
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Free banks: FDIC Friday Lotto: Another Reason Why Banks Are Not Lending – by MISH – In case you need another reason why banks are not lending, please consider the following email from a Senior Vice President at a small California Bank. “A California Banker” writes … By spreading out the number of bank failures over many months, the FDIC gives that small percentage of well capitalized banks a further reason not to lend for as long as the weekly lotto continues. Remember, the reason these banks are not in trouble in the first place is because they had prudent lending standards. … – MISH’S Global Economic Trend Analysis
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Lower leverage, deposit-based funding the “new normal” for US banks – Standard & Poor’s Ratings Services thinks it’s unlikely that banks will resume the risky practices and policies whose apparent failure forced the government to shore up the U.S. banking system in 2008 and 2009. Instead, in S&P’s view, banks will likely revert to a more conservative strategy based on a “loan-to-own” mindset versus the “originate to distribute” approach that exposed the largest financial institutions to the downside of aggressive underwriting and excessive leverage. – Research Recap
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California mortgage defaults drop 24.3% – The number of homes entering the first stage of foreclosure fell in the fourth quarter compared with the previous quarter, MDA DataQuick says – a sign that banks are working with delinquent borrowers – LA Times Business