Central bankers running outta room to move.. Once next global recession begins things will get very dicey as all their ammo pretty much spent already inflating the current bubble...
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[h=1]ECB's Draghi says looking at options to drive QE forward[/h]Thu Sep 8, 2016 | 9:28 AM EDT
By Balazs Koranyi and Francesco Canepa | FRANKFURT
(Reuters) - European Central Bank President Mario Draghi said on Thursday the bank was looking at options to ensure it could pursue its unprecedented money-printing program, with euro zone inflation still way below its official target.
However the bank stopped short of confirming a specific extension of its 80-billion-euro monthly asset purchases, reaffirming its existing line that they would continue until next March or beyond if necessary.
"The Governing Council tasked the relevant committees (with the ECB) to evaluate the options that ensure a smooth implementation of our purchase program," he told a news conference after the policy-making council kept its key interest rates on hold.
Draghi unveiled a modest downgrade of the bank's euro zone growth forecasts warned of downside risks, among them Brexit-related uncertainty, but said no action was required for now.
"For the time being, the changes are not substantial to warrant a decision to act. We see that our monetary policy is effective," he said.
The ECB kept its deposit rate at -0.4 percent, charging banks for parking cash overnight, and held the main refinancing rate, which determines the cost of credit in the economy, unchanged at 0.00 percent.
The euro hit a two-week high, bond yields across the euro zone rose and stock markets in the region fell on his confirmation that an extension of the central bank's asset-purchase program was not discussed at the meeting.
Keeping rates deep in negative territory and printing money at a record pace, the ECB is hoping to revive inflation and growth in a region weighed down by nearly a decade of economic malaise and crises.
After 18 consecutive months of buying government bonds to pump up the economy and raise inflation, the European Central Bank's holdings hit a landmark 1 trillion euros last week -- yet prices are seen rising a mere 0.2 percent this year, well below its target of near two percent.
WHAT TO CHANGE
Prolonging the purchases is controversial because it risks further distorting market prices and even running out of eligible bonds. The ECB has already had to stop purchases in Estonia and found no bonds to buy in Luxembourg last month.
That has led to increasing speculation that it will have to adapt the rules of its asset purchase program to provide even more stimulus, as it is widely expected to do before year-end.
The choice is then between tweaking purchase rules or going for a bigger redesign.
Easiest options could include buying bonds yielding less than the bank's -0.4 percent deposit rate, extending the maturity range of eligible bonds to 30 years from 20 years and buying an even bigger portion of certain bond issues.
Bigger changes could involve the purchase of new types of assets, like bank bonds, non performing loans or in the extreme case, stocks.
Still, each of these changes would generate concern or even outright opposition from the hawks and the growing camp of moderates on the Governing Council, who worry about the unintended negative effects of the ECB's extraordinary stimulus.
The ECB slightly upgraded its euro zone growth forecast to 1.7 percent from 1.6 percent this year, but downgraded it to 1.6 percent from 1.7 percent for both 2017 and 2018. Its forecast for a modest takeoff in inflation to 1.2 percent next year and 1.6 percent in 2018 were barely changed.
Draghi had his usual stern words to say on the structural reform efforts of the region's governments, describing them as in need to be "substantially stepped up" to raise productivity, improve the business environment, and boost infrastructure.
"Fiscal policies should also support the economic recovery," he said, repeating a message made by central bankers at the annual Jackson Hole gathering this year but which has seen only little take-up so far in Europe.
($1 = 0.8891 euros)
(Writing by Mark John; Editing by Jeremy Gaunt)
------------
[h=1]ECB's Draghi says looking at options to drive QE forward[/h]Thu Sep 8, 2016 | 9:28 AM EDT
By Balazs Koranyi and Francesco Canepa | FRANKFURT
(Reuters) - European Central Bank President Mario Draghi said on Thursday the bank was looking at options to ensure it could pursue its unprecedented money-printing program, with euro zone inflation still way below its official target.
However the bank stopped short of confirming a specific extension of its 80-billion-euro monthly asset purchases, reaffirming its existing line that they would continue until next March or beyond if necessary.
"The Governing Council tasked the relevant committees (with the ECB) to evaluate the options that ensure a smooth implementation of our purchase program," he told a news conference after the policy-making council kept its key interest rates on hold.
Draghi unveiled a modest downgrade of the bank's euro zone growth forecasts warned of downside risks, among them Brexit-related uncertainty, but said no action was required for now.
"For the time being, the changes are not substantial to warrant a decision to act. We see that our monetary policy is effective," he said.
The ECB kept its deposit rate at -0.4 percent, charging banks for parking cash overnight, and held the main refinancing rate, which determines the cost of credit in the economy, unchanged at 0.00 percent.
The euro hit a two-week high, bond yields across the euro zone rose and stock markets in the region fell on his confirmation that an extension of the central bank's asset-purchase program was not discussed at the meeting.
Keeping rates deep in negative territory and printing money at a record pace, the ECB is hoping to revive inflation and growth in a region weighed down by nearly a decade of economic malaise and crises.
After 18 consecutive months of buying government bonds to pump up the economy and raise inflation, the European Central Bank's holdings hit a landmark 1 trillion euros last week -- yet prices are seen rising a mere 0.2 percent this year, well below its target of near two percent.
WHAT TO CHANGE
Prolonging the purchases is controversial because it risks further distorting market prices and even running out of eligible bonds. The ECB has already had to stop purchases in Estonia and found no bonds to buy in Luxembourg last month.
That has led to increasing speculation that it will have to adapt the rules of its asset purchase program to provide even more stimulus, as it is widely expected to do before year-end.
The choice is then between tweaking purchase rules or going for a bigger redesign.
Easiest options could include buying bonds yielding less than the bank's -0.4 percent deposit rate, extending the maturity range of eligible bonds to 30 years from 20 years and buying an even bigger portion of certain bond issues.
Bigger changes could involve the purchase of new types of assets, like bank bonds, non performing loans or in the extreme case, stocks.
Still, each of these changes would generate concern or even outright opposition from the hawks and the growing camp of moderates on the Governing Council, who worry about the unintended negative effects of the ECB's extraordinary stimulus.
The ECB slightly upgraded its euro zone growth forecast to 1.7 percent from 1.6 percent this year, but downgraded it to 1.6 percent from 1.7 percent for both 2017 and 2018. Its forecast for a modest takeoff in inflation to 1.2 percent next year and 1.6 percent in 2018 were barely changed.
Draghi had his usual stern words to say on the structural reform efforts of the region's governments, describing them as in need to be "substantially stepped up" to raise productivity, improve the business environment, and boost infrastructure.
"Fiscal policies should also support the economic recovery," he said, repeating a message made by central bankers at the annual Jackson Hole gathering this year but which has seen only little take-up so far in Europe.
($1 = 0.8891 euros)
(Writing by Mark John; Editing by Jeremy Gaunt)
[h=1]Bank of America: Here's One Way the ECB's Bond Buying Could Come to an End[/h][h=2]A wave of LBOs amid exuberant credit markets.[/h]The only thing that can gatecrash the European Central Bank bond-buying-spurred credit party is ... the European Central Bank bond-buying program itself?
That's the conclusion drawn by Bank of America Corp. analysts who argue that the ECB's Corporate Sector Purchase Programme (CSPP) could lower company borrowing costs to levels that would spark a wave of leveraged loan buyouts (LBOs), creating volatility in credit spreads that could shake investors' faith in the central bank and confidence in the market.
The CSPP could "quickly become its own worst enemy if it leads to a rapid rise in releveraging", the analysts, led by Barnaby Martin, write.
A deluge of LBOs, which involve the acquisition of a public-listed company using a significant portion of borrowed money to take it private, would be just the latest in a string of symptoms suggesting over-exuberant credit markets. This week, for instance, saw the first sale of negative-yielding debt by non-financial companies after Sanofi, a French drugmaker, and Henkel AG, a German household products maker, issued benchmark deals with a yield of minus 0.05 percentage points for three- and two-year notes, respectively.
Such ultra-low yields on corporate bonds could encourage private-equity firms and financial sponsors to drive an uptick in debt-financed buyouts with such a trend inevitably causing a deterioration in target companies' creditworthiness and, as such, take some investment-grade firms into junk territory. In this context, LBOs would mean CSPP-eligible bonds would become ineligible in the ECB's bond-buying plan given the central bank's focus on investment-grade debt.
The BofA analysts add that this event risk would pose a policy dilemma for the central bank: "It would be a very challenging type of event risk for the ECB to manage and could sap their enthusiasm for continuing with CSPP."
In other words, the pro-cyclical impact of a corporate becoming suddenly ineligible for CSPP-inclusion would trigger a disruptive jump in spreads, similar to the credit-cliff effect triggered by a rating-agency downgrade.
Underscoring the increasingly-hospitable debt climate for LBOs is the fact that September is poised to become the busiest month for payment-in-kind toggle notes, which allow companies to defer interest payments and are sometimes issued to finance leveraged buyouts when a borrower might have other debt obligations that need to be serviced with cash. German auto components maker Schaeffler AG, for example, is likely to sell 2.5 billion euros ($2.81 billion) of the notes this week.
Citing recent private-equity interest in TDC A/S, which the Danish phone carrier subsequently snubbed, and news that buy-out firm KKR & Co LP's was one of the bidders for a stake in Spain's Gas Natural, the analysts say there might be an upturn in the European LBO cycle. That's because negative-yielding corporate bonds transfer the economics of LBOs, since such issuance would, in effect, help to pay down the principal on the debt tranche of a buy-out deal as companies would be paid to borrow.
With the rapid fall in junk yields, interest coverage — a measure of debt-servicing capacity — for European LBOs has risen this year, they say, indicating companies are more able to service their debts. What's more, the Bank of America analysts reckon negative-yielding BB-rated bonds, excluding callable debt, are nigh.
"Cheap debt can suddenly make unviable candidates appear 'viable' for private equity," they said.
Bank of America Corp
Bank of America Corp
In other words, the unleashing of the animal spirits in the financial-sponsor world through LBOs, driven by record-low debt costs, would haunt bond investors given the ensuing rise in corporate leverage, and the ECB could come under fire for generating volatility in credit spreads.
LBOs have been criticized in the boom years as an example of financial engineering and predatory capitalism, but the analysts don't mention the prospect of reputational risks for the ECB in the event of an uptick in buy-outs.
It's also far from certain an LBO boom will be forthcoming in Europe, though market conditions are hospitable given the record-low cost of debt capital for sponsors. What's more, even if a boom ensues, and the ECB generates volatility in some credit spreads, it might be seen as a price worth paying in the central bank's bid to reflate the single-currency bloc.
But, with the ECB buying around half of the traded daily volume of euro corporate credit, and overseeing a 65 percent spread-tightening since March of bonds eligible for purchase, according to Citigroup Inc, its presence in the market is profoundly reshaping the euro fixed-income landscape — and the equity market too given the heightened potential for debt-financed M&A, buybacks, and a prospective rise in LBOs.
Bank of America's sketch of the a possible end-game for the CSPP, therefore, could be seen as low-probability but high-risk warning for euro credit investors.
Before it's here, it's on the Bloomberg Terminal. LEARN MORE
That's the conclusion drawn by Bank of America Corp. analysts who argue that the ECB's Corporate Sector Purchase Programme (CSPP) could lower company borrowing costs to levels that would spark a wave of leveraged loan buyouts (LBOs), creating volatility in credit spreads that could shake investors' faith in the central bank and confidence in the market.
The CSPP could "quickly become its own worst enemy if it leads to a rapid rise in releveraging", the analysts, led by Barnaby Martin, write.
A deluge of LBOs, which involve the acquisition of a public-listed company using a significant portion of borrowed money to take it private, would be just the latest in a string of symptoms suggesting over-exuberant credit markets. This week, for instance, saw the first sale of negative-yielding debt by non-financial companies after Sanofi, a French drugmaker, and Henkel AG, a German household products maker, issued benchmark deals with a yield of minus 0.05 percentage points for three- and two-year notes, respectively.
Such ultra-low yields on corporate bonds could encourage private-equity firms and financial sponsors to drive an uptick in debt-financed buyouts with such a trend inevitably causing a deterioration in target companies' creditworthiness and, as such, take some investment-grade firms into junk territory. In this context, LBOs would mean CSPP-eligible bonds would become ineligible in the ECB's bond-buying plan given the central bank's focus on investment-grade debt.
The BofA analysts add that this event risk would pose a policy dilemma for the central bank: "It would be a very challenging type of event risk for the ECB to manage and could sap their enthusiasm for continuing with CSPP."
In other words, the pro-cyclical impact of a corporate becoming suddenly ineligible for CSPP-inclusion would trigger a disruptive jump in spreads, similar to the credit-cliff effect triggered by a rating-agency downgrade.
Underscoring the increasingly-hospitable debt climate for LBOs is the fact that September is poised to become the busiest month for payment-in-kind toggle notes, which allow companies to defer interest payments and are sometimes issued to finance leveraged buyouts when a borrower might have other debt obligations that need to be serviced with cash. German auto components maker Schaeffler AG, for example, is likely to sell 2.5 billion euros ($2.81 billion) of the notes this week.
Citing recent private-equity interest in TDC A/S, which the Danish phone carrier subsequently snubbed, and news that buy-out firm KKR & Co LP's was one of the bidders for a stake in Spain's Gas Natural, the analysts say there might be an upturn in the European LBO cycle. That's because negative-yielding corporate bonds transfer the economics of LBOs, since such issuance would, in effect, help to pay down the principal on the debt tranche of a buy-out deal as companies would be paid to borrow.
With the rapid fall in junk yields, interest coverage — a measure of debt-servicing capacity — for European LBOs has risen this year, they say, indicating companies are more able to service their debts. What's more, the Bank of America analysts reckon negative-yielding BB-rated bonds, excluding callable debt, are nigh.
"Cheap debt can suddenly make unviable candidates appear 'viable' for private equity," they said.
Bank of America Corp
Bank of America Corp
In other words, the unleashing of the animal spirits in the financial-sponsor world through LBOs, driven by record-low debt costs, would haunt bond investors given the ensuing rise in corporate leverage, and the ECB could come under fire for generating volatility in credit spreads.
LBOs have been criticized in the boom years as an example of financial engineering and predatory capitalism, but the analysts don't mention the prospect of reputational risks for the ECB in the event of an uptick in buy-outs.
It's also far from certain an LBO boom will be forthcoming in Europe, though market conditions are hospitable given the record-low cost of debt capital for sponsors. What's more, even if a boom ensues, and the ECB generates volatility in some credit spreads, it might be seen as a price worth paying in the central bank's bid to reflate the single-currency bloc.
But, with the ECB buying around half of the traded daily volume of euro corporate credit, and overseeing a 65 percent spread-tightening since March of bonds eligible for purchase, according to Citigroup Inc, its presence in the market is profoundly reshaping the euro fixed-income landscape — and the equity market too given the heightened potential for debt-financed M&A, buybacks, and a prospective rise in LBOs.
Bank of America's sketch of the a possible end-game for the CSPP, therefore, could be seen as low-probability but high-risk warning for euro credit investors.
Before it's here, it's on the Bloomberg Terminal. LEARN MORE
[h=1]Draghi Dialing Down the Drama May Mark Wane of Monetary Activism[/h]Central bankers might be becoming a little more sanguine about the limits to their powers.
Take European Central Bank President Mario Draghi, who on Thursday talked up the effectiveness of his institution’s stimulus policies to date, but damped expectations that he’ll load up with fresh asset-buying soon. His only new announcement after again downgrading euro-area growth forecasts was that officials will look into how to ensure the current program overcomes a worsening scarcity of bonds.
Even with the scheduled end of the 1.7 trillion-euro ($1.9 trillion) plan just six months away, Draghi said policy makers meeting in Frankfurt haven’t yet discussed what they’ll do when that day comes. If a new laissez-faire tone is creeping in to replace years of hyperactivity, it may be a signal that the division of labor between central banks and governments in providing economic support is shifting.
“Draghi doesn’t sound like a central banker who’s in any hurry to ease further,” said Tim Graf, head of European macro strategy at State Street in London. His stance “fits in with the G-20 statements about using all actors to support growth, including the fiscal side. Taking ever-easier monetary policy for granted is becoming less valid.”
For a QuickTake explainer on QE, click here
As a communications tack, Draghi’s performance after the Governing Council met to set euro-area monetary policy is comparable with the attitude a day earlier by Mark Carney. The Bank of England governor told lawmakers that his institution’s rapid response after the U.K. voted to quit the European Union probably staved off a recession, but also said the BOE isn’t “trigger-happy.”
In other words: Emphasize how effective monetary policy has been, talk less about what it still can do.
Leaders and finance chiefs from the world’s top economies seem to agree. They’ve spent much of this year, under China’s G-20 presidency, saying they want governments to do more and central banks less. Draghi read at length from the communique issued at this month’s leaders’ meeting in Hangzhou. There are even nascent signs that the fiscal purse strings are being loosened a little.
[h=3]‘No Hurry’[/h]Still, bond investors were disappointed, with prices sliding after he spoke. Francesco Papadia, a former ECB director general, remarked on Twitter that Draghi’s “ambiguity” on prolonging QE may have been needed to placate more hawkish members of the Governing Council.
While the ECB “seems to be in no hurry to go wild and decide on new bold measures,” vagueness now doesn’t preclude surprise action later, according to Carsten Brzeski, chief economist at ING-DiBa in Frankfurt.
Central bankers remain adamant that their actions work. Carney said the BOE had “without a shadow of a doubt” reduced the likelihood of an economic contraction through a rate cut and renewed asset buying, and that he’s “serene” about the central bank’s conduct. Draghi expressed satisfaction that the current stimulus-boosted recovery is “firmer, more robust than other recoveries we’ve seen in the past.”
But nor are they ready to start new adventures in monetary stimulus. The BOE head opposes negative rates, and neither man has shown any enthusiasm for helicopter money or a radical expansion into asset classes such as equities.
[h=3]Striking Change[/h]Draghi said the “main thing” was to make sure QE can be implemented “in the new constellation of interest rates.” Officials are likely to focus on how to avoid getting snarled up in their own existing rules about which bonds they can buy -- such as a stipulation that the yield on securities for purchase can’t be below the deposit rate of minus 0.4 percent. That limit currently disqualifies the equivalent of $1.87 trillion of euro-area government debt from QE.
The relative inaction “looks disconnected from past experiences when the ECB used to react to” any revisions to the economic outlook, Frederic Pretet, a rates strategist at Scotiabank Europe in Paris. “This is striking when we remember that, not so long ago, the ECB president stressed the need to bring back inflation back to target without undue delay.”
Before it's here, it's on the Bloomberg Terminal. LEARN MORE
Take European Central Bank President Mario Draghi, who on Thursday talked up the effectiveness of his institution’s stimulus policies to date, but damped expectations that he’ll load up with fresh asset-buying soon. His only new announcement after again downgrading euro-area growth forecasts was that officials will look into how to ensure the current program overcomes a worsening scarcity of bonds.
Even with the scheduled end of the 1.7 trillion-euro ($1.9 trillion) plan just six months away, Draghi said policy makers meeting in Frankfurt haven’t yet discussed what they’ll do when that day comes. If a new laissez-faire tone is creeping in to replace years of hyperactivity, it may be a signal that the division of labor between central banks and governments in providing economic support is shifting.
“Draghi doesn’t sound like a central banker who’s in any hurry to ease further,” said Tim Graf, head of European macro strategy at State Street in London. His stance “fits in with the G-20 statements about using all actors to support growth, including the fiscal side. Taking ever-easier monetary policy for granted is becoming less valid.”
For a QuickTake explainer on QE, click here
As a communications tack, Draghi’s performance after the Governing Council met to set euro-area monetary policy is comparable with the attitude a day earlier by Mark Carney. The Bank of England governor told lawmakers that his institution’s rapid response after the U.K. voted to quit the European Union probably staved off a recession, but also said the BOE isn’t “trigger-happy.”
In other words: Emphasize how effective monetary policy has been, talk less about what it still can do.
Leaders and finance chiefs from the world’s top economies seem to agree. They’ve spent much of this year, under China’s G-20 presidency, saying they want governments to do more and central banks less. Draghi read at length from the communique issued at this month’s leaders’ meeting in Hangzhou. There are even nascent signs that the fiscal purse strings are being loosened a little.
[h=3]‘No Hurry’[/h]Still, bond investors were disappointed, with prices sliding after he spoke. Francesco Papadia, a former ECB director general, remarked on Twitter that Draghi’s “ambiguity” on prolonging QE may have been needed to placate more hawkish members of the Governing Council.
While the ECB “seems to be in no hurry to go wild and decide on new bold measures,” vagueness now doesn’t preclude surprise action later, according to Carsten Brzeski, chief economist at ING-DiBa in Frankfurt.
Central bankers remain adamant that their actions work. Carney said the BOE had “without a shadow of a doubt” reduced the likelihood of an economic contraction through a rate cut and renewed asset buying, and that he’s “serene” about the central bank’s conduct. Draghi expressed satisfaction that the current stimulus-boosted recovery is “firmer, more robust than other recoveries we’ve seen in the past.”
But nor are they ready to start new adventures in monetary stimulus. The BOE head opposes negative rates, and neither man has shown any enthusiasm for helicopter money or a radical expansion into asset classes such as equities.
[h=3]Striking Change[/h]Draghi said the “main thing” was to make sure QE can be implemented “in the new constellation of interest rates.” Officials are likely to focus on how to avoid getting snarled up in their own existing rules about which bonds they can buy -- such as a stipulation that the yield on securities for purchase can’t be below the deposit rate of minus 0.4 percent. That limit currently disqualifies the equivalent of $1.87 trillion of euro-area government debt from QE.
The relative inaction “looks disconnected from past experiences when the ECB used to react to” any revisions to the economic outlook, Frederic Pretet, a rates strategist at Scotiabank Europe in Paris. “This is striking when we remember that, not so long ago, the ECB president stressed the need to bring back inflation back to target without undue delay.”
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Fed Tells Congress To Restrict Banks From Buying Stocks, Commodities
What is The Fed suddenly worried about?
In a somewhat shocking report from The Federal Reserve, Janet Yellen and her motley crew of private bankers areurging Congress to make some significant changes to banking regulation. As Bloomberg highlights:
- Fed urges Congress to repeal section of the Bank Holding Act that allows Wall Street firms to make investments in non-financial companies, report says
- Prohibiting merchant banking would prevent Wall Street from “becoming exposed to the risk of legal liability for the operations of a portfolio company,” Fed says
- Merchant-banking ban would also “help address potential safety and soundness concerns and maintain the basic tenet of separation of banking and commerce,” Fed says
- Fed also advises Congress to restrict bank ownership of physical commodities
- Fed separately advises Congress to force industrial loan companies to operate within the “regulatory and supervisory framework applicable to other corporate owners of insured depository institutions”
- Fed, FDIC and OCC report to Congress on bank practices required under Dodd-Frank Act
1) the ban on 'investing in non-financial companies', which is highly ironic given that other central banks are directly buying massive stakes in the world's corporate entities; and
2) restrictions on physical ownership of commodities, which raises eyebrows on both oil manipulation and the hoarding of precious metals ahead of The Fed losing control.
Of course, the chances of any of these reccommendations actually being signed into law is nil - especially if Clinton is elected - since Wall Street donors will not take kindly to this 'restriction'.2) restrictions on physical ownership of commodities, which raises eyebrows on both oil manipulation and the hoarding of precious metals ahead of The Fed losing control.
Banksters at it as usual..
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[h=1]Wells Fargo fined $185M over unauthorized accounts that harmed customers[/h]Wells Fargo Bank, one of the nation's largest banks, has been hit with $185 million in civil penalties for secretly opening millions of unauthorized deposit and credit card accounts that harmed customers, federal and state officials said Thursday.
Photo: Spencer Platt, Getty Images, Getty Images North America
File photo taken in 2016 shows pedestrians passing a Wells Fargo bank branch in New York City.
Employees of Wells Fargo (WFC) boosted sales figures by covertly opening the accounts and funding them by transferring money from customers' authorized accounts without permission, the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency and Los Angeles city officials said.
An analysis by the San Francisco-headquartered bank found that its employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers, the officials said. Many of the transfers ran up fees or other charges for the customers, even as they helped employees make incentive goals.
The findings stem in part from a Los Angeles County Superior Court lawsuit filed last year in which Los Angeles City Attorney Mike Feuer accused the bank of violating California unfair competition laws.
The civil action charged that Wells Fargo Bank and its parent, Wells Fargo & Co., "victimized their customers by using pernicious and often illegal sales tactics to maintain high levels of sales of their banking and financial products."
"Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears that the bank did not monitor the program carefully," said CFPB Director Richard Cordray. He added that thousands of bank employees "misused consumer names and personal information to create new checking and credit card accounts to inflate their sales figures to meet their sales targets and claim higher bonuses."
The bank agreed to pay full restitution to all victims and a $100 million fine to the Consumer Financial Protection Bureau's civil penalty fund — the largest in the regulator's five-year operating history. Wells Fargo will pay a separate $35 million penalty to the Office of the Comptroller of the Currency, and an additional $50 million to the city and county of Los Angeles.
The settlements, which the bank said it had made provisions for as of June 30, include an additional $5 million in customer remediation.
Additionally, Wells Fargo said it terminated approximately 5,300 employees and managers over a five-year period for their involvement with the unauthorized accounts. The firings, representing roughly 1% of the total workforce during that time, "reflect our commitment to monitoring and addressing any inappropriate sales conduct," the bank said.
The bank agreed to the filing of a CFPB consent order without admitting or denying legal conclusions reached by federal investigators.
“Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us," the bank said in a statement. "Wells Fargo is committed to putting our customers’ interests first 100% of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request."
The bank said a review by a third-party consultant resulted in $2.6 million in refunds to customers for any fees associated with products the account holders "may not have requested." Accounts refunded represented a fraction of one percent of the accounts reviewed, and refunds averaged $25, Wells Fargo said.
Wells Fargo shares closed fractionally higher at $49.90 Thursday.
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc
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[h=1]Wells Fargo fined $185M over unauthorized accounts that harmed customers[/h]Wells Fargo Bank, one of the nation's largest banks, has been hit with $185 million in civil penalties for secretly opening millions of unauthorized deposit and credit card accounts that harmed customers, federal and state officials said Thursday.
File photo taken in 2016 shows pedestrians passing a Wells Fargo bank branch in New York City.
Employees of Wells Fargo (WFC) boosted sales figures by covertly opening the accounts and funding them by transferring money from customers' authorized accounts without permission, the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency and Los Angeles city officials said.
An analysis by the San Francisco-headquartered bank found that its employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers, the officials said. Many of the transfers ran up fees or other charges for the customers, even as they helped employees make incentive goals.
The findings stem in part from a Los Angeles County Superior Court lawsuit filed last year in which Los Angeles City Attorney Mike Feuer accused the bank of violating California unfair competition laws.
The civil action charged that Wells Fargo Bank and its parent, Wells Fargo & Co., "victimized their customers by using pernicious and often illegal sales tactics to maintain high levels of sales of their banking and financial products."
"Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears that the bank did not monitor the program carefully," said CFPB Director Richard Cordray. He added that thousands of bank employees "misused consumer names and personal information to create new checking and credit card accounts to inflate their sales figures to meet their sales targets and claim higher bonuses."
The bank agreed to pay full restitution to all victims and a $100 million fine to the Consumer Financial Protection Bureau's civil penalty fund — the largest in the regulator's five-year operating history. Wells Fargo will pay a separate $35 million penalty to the Office of the Comptroller of the Currency, and an additional $50 million to the city and county of Los Angeles.
The settlements, which the bank said it had made provisions for as of June 30, include an additional $5 million in customer remediation.
Additionally, Wells Fargo said it terminated approximately 5,300 employees and managers over a five-year period for their involvement with the unauthorized accounts. The firings, representing roughly 1% of the total workforce during that time, "reflect our commitment to monitoring and addressing any inappropriate sales conduct," the bank said.
The bank agreed to the filing of a CFPB consent order without admitting or denying legal conclusions reached by federal investigators.
“Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us," the bank said in a statement. "Wells Fargo is committed to putting our customers’ interests first 100% of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request."
The bank said a review by a third-party consultant resulted in $2.6 million in refunds to customers for any fees associated with products the account holders "may not have requested." Accounts refunded represented a fraction of one percent of the accounts reviewed, and refunds averaged $25, Wells Fargo said.
Wells Fargo shares closed fractionally higher at $49.90 Thursday.
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc
The end is near for the QE bubble..
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[h=1]The ECB's QEnundrum: Draghi May Run Out Of Bonds To Buy As Soon As November[/h]Yesterday we pointed out the many "Conundrums Of A Policy Maker" which focused on the waning ability of central banks and sovereign governments to continue to control asset prices as their traditional forms of stimulus are reaching the end of their useful life. As proof of just how ineffective the marginal stimulus from Central Banks has become, the Financial Times points out this morning that the ECB will likely have bought every dollar of eligible debt available by the end of this year under its $1.6 trillion QE program.
As the FT points out, there is about $7.5 trillion of government and agency paper outstanding in the EU. That said, the ECB is restricted to purchasing bonds with maturities ranging from 2-30 years and with a yield above the eurozone's deposit rate of -0.4%. According to FT calculations, those restrictions eliminate roughly $1.5 trillion of eligible paper. Moreover, the ECB is also restricted from purchasing more than 33% of any given issuance or of a single country's outstanding debt which reduces total supply of eligible paper further to just $2.0 trillion which is only slightly more than the $1.6 trillion approved for the QE program.
That said, other rules require the ECB to make purchases on a pro-rata basis in-line with the size of the economies of its member states. Therefore, the ECB will likely run out of paper to buy in larger countries like Germany earlier than others. Per the FT, many analysts are starting to speculate that the ECB will have bought every single available bond by the end of 2016.
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[h=1]The ECB's QEnundrum: Draghi May Run Out Of Bonds To Buy As Soon As November[/h]Yesterday we pointed out the many "Conundrums Of A Policy Maker" which focused on the waning ability of central banks and sovereign governments to continue to control asset prices as their traditional forms of stimulus are reaching the end of their useful life. As proof of just how ineffective the marginal stimulus from Central Banks has become, the Financial Times points out this morning that the ECB will likely have bought every dollar of eligible debt available by the end of this year under its $1.6 trillion QE program.
As the FT points out, there is about $7.5 trillion of government and agency paper outstanding in the EU. That said, the ECB is restricted to purchasing bonds with maturities ranging from 2-30 years and with a yield above the eurozone's deposit rate of -0.4%. According to FT calculations, those restrictions eliminate roughly $1.5 trillion of eligible paper. Moreover, the ECB is also restricted from purchasing more than 33% of any given issuance or of a single country's outstanding debt which reduces total supply of eligible paper further to just $2.0 trillion which is only slightly more than the $1.6 trillion approved for the QE program.
That said, other rules require the ECB to make purchases on a pro-rata basis in-line with the size of the economies of its member states. Therefore, the ECB will likely run out of paper to buy in larger countries like Germany earlier than others. Per the FT, many analysts are starting to speculate that the ECB will have bought every single available bond by the end of 2016.
The mechanics of the ECB’s quantitative easing project means banks and investors believe the central bank cannot keep on buying €80bn of bonds a month as planned— or extend quantitative easing — unless it relaxes rules about what it can buy.
With the eurozone’s recovery proving relatively lacklustre, the ECB has vowed to continue QE at least until March and many economists expect it will be forced to prolong the programme beyond that date.
But credit analysts at banks including Citi, HSBC, Bank of America Merrill Lynch, BNP Paribas and JPMorgan and investors such as Pimco all say the €1.6tn programme is fast approaching a wall, perhaps as early as this year. The trouble is that no one outside the ECB knows how close the wall is.
Citi believes the squeeze is so severe that the ECB will run out of German paper to buy in November, although BofA thinks the programme can run unaltered until the end of the year.
And, as we concluded yesterday, there's only one thing left to do when you've lowered interest rates to below 0% and purchased every piece of sovereign paper possible.With the eurozone’s recovery proving relatively lacklustre, the ECB has vowed to continue QE at least until March and many economists expect it will be forced to prolong the programme beyond that date.
But credit analysts at banks including Citi, HSBC, Bank of America Merrill Lynch, BNP Paribas and JPMorgan and investors such as Pimco all say the €1.6tn programme is fast approaching a wall, perhaps as early as this year. The trouble is that no one outside the ECB knows how close the wall is.
Citi believes the squeeze is so severe that the ECB will run out of German paper to buy in November, although BofA thinks the programme can run unaltered until the end of the year.
Shipping companies starting to go 
up now, ships are always a good indicator for the bigger picture
Hanjin seeks funds to free stranded cargo worth $14bn
The failed Hanjin shipping group is desperately seeking funds to rescue $14bn (£10.5bn) worth of cargo stranded round the world following its collapse.
Hanjin filed for receivership in South Korea last week after attempts to bail out the indebted company failed.
Ports have refused to accept Hanjin cargoes without guarantees that port fees will be paid.
However, creditors, banks and the South Korean government are all reluctant to put up the cash.
The global economic downturn, fierce competition and falling prices has hit profits across the cargo shipping industry and Hanjin collapsed with debts of about $5.4bn (£4.1bn) last month.
There are an estimated 89 Hanjin ships out of its 141-vessel fleet in difficulty, and some have been seized by creditors.
The ships contain everything from computer parts to perishable food with many of the cargoes destined for the Christmas market in the US and Europe.
http://www.bbc.co.uk/news/business-37304940
Hanjin Shipping Co. Ltd is South Korea's largest and one of the world's top ten container carriers in terms of capacity. In August 2016, the company applied for receivership.
Hanjin shipping operates some 60 liner and tramper services around the globe transporting over 100 million tons of cargo annually. Its fleet consists of some 200 containerships, bulk and LNG carriers. Hanjin Shipping has its own subsidiaries dedicated to ocean transportation and terminal operation and it has 230 branch offices in 60 different countries.
https://en.wikipedia.org/wiki/Hanjin_Shipping
up now, ships are always a good indicator for the bigger pictureHanjin seeks funds to free stranded cargo worth $14bn
The failed Hanjin shipping group is desperately seeking funds to rescue $14bn (£10.5bn) worth of cargo stranded round the world following its collapse.
Hanjin filed for receivership in South Korea last week after attempts to bail out the indebted company failed.
Ports have refused to accept Hanjin cargoes without guarantees that port fees will be paid.
However, creditors, banks and the South Korean government are all reluctant to put up the cash.
The global economic downturn, fierce competition and falling prices has hit profits across the cargo shipping industry and Hanjin collapsed with debts of about $5.4bn (£4.1bn) last month.
There are an estimated 89 Hanjin ships out of its 141-vessel fleet in difficulty, and some have been seized by creditors.
The ships contain everything from computer parts to perishable food with many of the cargoes destined for the Christmas market in the US and Europe.
http://www.bbc.co.uk/news/business-37304940
Hanjin Shipping Co. Ltd is South Korea's largest and one of the world's top ten container carriers in terms of capacity. In August 2016, the company applied for receivership.
Hanjin shipping operates some 60 liner and tramper services around the globe transporting over 100 million tons of cargo annually. Its fleet consists of some 200 containerships, bulk and LNG carriers. Hanjin Shipping has its own subsidiaries dedicated to ocean transportation and terminal operation and it has 230 branch offices in 60 different countries.
https://en.wikipedia.org/wiki/Hanjin_Shipping
Pneumonia eh? That's the least of her problems.
Pneumonia often shows up in the final stages of an elderly persons life, before decent antibiotics it was known as "old mans friend" because it helped the old folk on their way and gave them a dignified end.
Poor Hillary is knackered and unfit for purpose, they didn't even take her to a hospital, but her daughters flat, to keep outside parties away from her.
It's a bit like a mini Kim Jong-il scenario, or Howard Hughes, where they try to hide what's going on from the masses
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On Sunday, video showed her being supported by aides as they put her into her van after she left the 9/11 ceremony in New York early.
She was taken to her daughter's flat nearby and her team told reporters she was "overheated". The candidate re-emerged later on Sunday, telling reporters: "I'm feeling great. It's a beautiful day in New York."
She then left for her home in Chappaqua, New York, and on Sunday evening Dr Bardack issued the health update.
http://www.bbc.co.uk/news/election-us-2016-37336164
Pneumonia often shows up in the final stages of an elderly persons life, before decent antibiotics it was known as "old mans friend" because it helped the old folk on their way and gave them a dignified end.
Poor Hillary is knackered and unfit for purpose, they didn't even take her to a hospital, but her daughters flat, to keep outside parties away from her.
It's a bit like a mini Kim Jong-il scenario, or Howard Hughes, where they try to hide what's going on from the masses
---------------------------------------------------------------
On Sunday, video showed her being supported by aides as they put her into her van after she left the 9/11 ceremony in New York early.
She was taken to her daughter's flat nearby and her team told reporters she was "overheated". The candidate re-emerged later on Sunday, telling reporters: "I'm feeling great. It's a beautiful day in New York."
She then left for her home in Chappaqua, New York, and on Sunday evening Dr Bardack issued the health update.
http://www.bbc.co.uk/news/election-us-2016-37336164
like I said near zero chance they raise before election.. Especially when the fed is lefty/big government is good thinking generally speaking... bad market leading up to election clearly a positive for the non incumbent party...
after Friday's action and Hilary's illness they were very quick to reassure Wall Street... See very little chance of major decline till we get past election... And near zero chance of rate hike
