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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (776315)	3/23/2014 6:43:31 PM
From: Bilow	Read Replies (1) \| Respond to of 1574576

Hi mindmeld; Re: "First of all, I agree the business cycle cannot be smoothed out. Then when does the Fed try so hard to do it? Do you dispute that their manipulation of interest rates and QE is precisely an attempt to smooth out the business cycle? It's futility at work and it creates distortions."; The Fed does not try to eliminate (i.e. "smooth out") the business cycle, that's impossible. Instead, it tries to reduce the peaks and raise the valleys (valleys more than peaks, LOL). That is not necessarily a futile enterprise. I've given evidence that the business cycle now is less extreme than it was during the early years of the Fed. And I can give evidence that the business cycles before the Fed were more extreme than they are now. You've given no evidence to the contrary. As far as I can tell, you ignored the evidence I gave completely with no response. Why should I give you more? Re: "We have a rapacious government that has funneled the wealth of the nation to cronies and lobbyists, installed an alphabet soup of security apparati that daily violate our Constitutional Rights, engaged in outright buying of votes through ignoring certain laws and executing only those they please, allowing our largest banks to commit fraud and money laundering with impunity while none of their execs go to jail, massively increased the welfare roles including food stamps and unemployment for 5 years after the recession began, and engaged in spying of our allies."; I agree with this but it has nothing to do with the Fed. Try to stick to the subject. -- Carl

To: RetiredNow who wrote (776315)	3/27/2014 11:51:54 AM
From: tejek	Read Replies (1) \| Respond to of 1574576

Citigroup sinks 5% after failing Fed 'stress test' Paul Davidson, USA TODAY 10:57 a.m. EDT March 27, 2014 CItigroup shares dropped about 5% Thursday after the Federal Reserve rejected the plans of Citigroup and four other banks to raise dividend payments and increase stock buybacks. The Fed said their management practices or capital cushions are not robust enough to withstand a severe economic downturn. Twenty-five other banks that took part in the Fed's annual "stress test" received a green light for their planned dividend payouts and share repurchases. Bank of America and Goldman Sachs initially fell short of minimum capital requirements but met the standards after reducing their planned dividend payments and share buybacks over the past week. The capital plans of Citigroup, HSBC North America Holdings, RBS Citizens Financial Group and Santander Holdings USA all were rebuffed because of flaws in their oversight practices or what the Fed calls "qualitative concerns." Zions Bancorporation's plan was turned down because it fell short of the minimum capital buffer required in the event of a severe recession. The banks now have 90 days to address the weaknesses identified by the Fed and resubmit their dividend and share buyback plans. Citigroup's shares were down 4.7% to $47.82 in late morning trading. The Fed's decision was part of the annual checkup it requires banks with more than $50 billion in assets to undergo to ensure they can endure shocks like those that upended the banking system and led to big government bailouts in the 2008 financial crisis. Citigroup was the biggest recipient of federal bailout money during the crisis, getting $45 billion in cash infusions and many billions more in guarantees. The Fed said its rejection of Citigroup's plans "reflects significantly heightened supervisory expectations for the largest and most complex" bank holding companies. The Fed said Citigroup "has made considerable progress improving" its risk management and control practices the past several years, but its capital plan contained "a number of deficiencies." For example, the Fed questioned Citigroup's ability to project revenue and losses "for material parts of the firm's global operations" in a sharp economic downturn. The central bank also cited gaps in Citigroup's own stress testing that reflect "its full range of business activities and exposures." In a statement, Citigroup said it had planned to raise its quarterly dividend to 5 cents per share and repurchase $6.4 billion of its stock. Instead, it can continue its current dividend payment of 1 cent per share and $1.2 billion in stock repurchases. "Needless to say, we are deeply disappointed by the Fed's decision regarding the additional capital actions we requested." The company said its plans "represented at a modest level of capital return and still allowed Citi to exceed the required (capital) threshold." The banking giant said it will continue to work closely with Fed officials "to better understand their concerns" and meet their standards. The plans of HSBC and RBS Citizens were rejected because of "inadequate governance and weak internal controls," among other factors. The Fed also cited flaws in the two banks' "practices for estimating revenue and losses" in certain circumstances. Zions, meanwhile, had a Tier 1 common ratio, which compares high-quality capital to risk-weighted assets, of 4.4%, below the Fed's 5% minimum. The bank said last week that it would resubmit its capital plan after the Fed released initial results that showed the bank likely falling short of the minimum. As a group, the 30 bank holding companies had a Tier 1 common ratio of 11.6% in the fourth quarter of 2013, up from 5.5% in the first quarter of 2009 and 11.3% in last year's stress test. "With each year we have seen broad improvement in the industry's ability to assess its capital needs under stress," Fed Gov. Daniel Tarullo said. "However, both the firms and supervisors have more work to do as we continue to raise expectations for the quality of risk management in the nation's largest banks." In the extreme scenario, the Fed test assumed a rise in the 6.7% unemployment rate to 11.2%, a 50% drop in stock prices and a decline in home prices to 2001 levels. usatoday.com