Wednesday, April 23, 2014

Quantitative Easing….


Chart This !!
Spent several days last week at an economics conference sponsored by the Federal Reserve Bank of Atlanta.  They hold it out in the north Georgia woods - a good distance from reality - which seemed appropriate.

There were a lot of really "scary smart" people at the conference including an economics Nobel laureate, several highly distinguished academics, global bank economists from the U.S., China, Spain, Japan, Chile, Italy, etc. and the leading economic theorists from government agencies such as the Fed, the FDIC, the U.S. Treasury, and the SEC.  You get the picture - the best and the brightest in quantitative economics. No one from NCUA was registered

Never been bothered much about not being "the smartest person at the table"(that's just the way life is); but it's a bit unnerving when you have to honestly admit that you're unquestionably and repeatedly "the dumbest person at the table"(it was that kind of group!).  Practiced being quiet a lot and trying to feign invisibility when the Q&A started soaring well above my head.


The Bernanke Solution !
What I found most intriguing was the open, heated debate among these very bright folks over the merits of the recent practice of "quantitative easing" by the Fed. Literally trillions of dollars have been injected into the banking system in an attempt to revive the U.S. economy.  Former Fed Chair Ben Bernanke colorfully labelled quantitative easing as the practice of "dumping helicopter loads of cash" on to communities all across America.  

Much of the debate centered around the future economic consequences of reabsorbing this excess monetary stimulus as the economy gains strength.  It was somehow both reassuring and refreshing to hear the best and brightest profess profound doubt and concern over being in these uncharted economic waters - with highly arguable and uncertain outcomes. All in decided contrast to the "inerrant robusterians" at the NCUA, who remain resolutely and insanely certain, about the unfailing wisdom of their myopia.

Myopia?
"Nah, just can't see it…"

It would have improved my self-esteem greatly to have had a few of them at my conference table...

But all the robust bashing aside, what was most startling was finding out that the Atlanta Fed had already begun the national monetary unwinding process with at least one way to use all that excess money!

Take a close look at one of the numerous notepads which were spread across all the conference tables…


Tuesday, April 22, 2014

Kafkaesque…. Credit Unions: The New "Criminal Class"?


Guilty, always guilty...

Franz Kafka was a Czech-German writer of the early 1900's. His novels often involved people caught up in struggles with mindless bureaucracies, which has led to the creation of the term "Kafkaesque" to describe such situations.


Wikipedia defines Kafkaesque as follows: "Examples include instances in which bureaucracies overpower people often in a surreal, nightmarish milieu which evokes feelings of senselessness, disorientation, and helplessness.  Characters in Kafkaesque settings often lack a clear course of action to escape the situations, which are incomprehensibly complex, bizarre, or illogical."

"The Trial" portrays the saga of Joseph K. a
These are the conclusions
upon which I base my facts...
worldly, young bank official who is arrested "one fine morning", although he has done nothing wrong.  The novel tells the story of Joseph K.'s struggles and encounters with the invisible Law and the untouchable Court. " 


K. can never quite discover the crime of which he is accused, the laws to which he must answer, nor the process by which guilt and innocence are determined.  K. is entrapped in a system which need not listen nor explain, and to which and from which there is no appeal.  And, K. of course, is inevitably executed by that system despite his innocence…

Perhaps you might like to reflect upon when "they" decided you and your credit union were part of the "criminal class" and whether or not you or your credit union are…

Monday, April 21, 2014

From The Field....


Life is a carousel...


"We seem to be off and running, sometimes in circles…"

(… the great mandala?)

Sunday, April 20, 2014

Rants And Raves….


Fat chance !

*  Still hoping that the police in Bakersville can step away from the donut box long enough to enforce some traffic laws.


*  God will judge step-mothers.

*  When you see a political ad on TV you might as well consider it a lie, it most likely is.

*  If you're gonna be low down enough to steal from other people, try not to let anyone see you.


*  Some of the people who move here think that folks whose families have lived here for years aren't near as smart as them. Well least we were smart enough to get here first.

And the "you'll only find this sort of quality put down moment" in the 
Mitchell News-Journal...

Saturday, April 19, 2014

From The Field….


Winging it?

"Wasn't sure I was hearing the whole story on his past credit history, but there did seem to be a colonel of truth in his…"


(… and he showed a lot of pluck!)

Friday, April 18, 2014

From The Field...




He's one of our more difficult members, always acting above his raisin

(Thinks he's too grape…?)

Thursday, April 17, 2014

Taxing The Patience Of America...



Swine… very.very swine!
The "angels of  b*#king" continue to harp!  Fluttering around about credit unions as they continue to sign another, then another, and yet another "consent decree". (So numerous now that they're probably "robo-signing" 'em!) 

A "decency decree" might be more appropriate and may be what will eventually be required for our "fine" Wall St. b*#ks…  yes, fine after fine after fine after…. 


Here are our friends from Bankerspank once more:



Sue-y, sue-y… call in the hogs!

Wednesday, April 16, 2014

Risk-Based Congressional (RBC!) Testimony...


 Spotting the high risks…

Here's a brief follow-up on a couple of comment questions, which asked for a bit of "fact checking" on the McKenna Congressional testimony posts.  

One of the points that the NCUA has manufactured to justify its new risk-based capital (RBC) proposal is the "high risk" threat posed  by "large, complex" credit unions to the NCUSIF.  

As mentioned, the NCUA in its RBC proposal attempts to change the Federal Credit Union Act (FCUA) by unilaterally declaring that 1) all credit unions below $50 million in assets are  a) "small" and b) "not complex"; and equally, 2) all credit unions above $50 million in assets are a) "large" and b) "complex".  



Neither statement is true, but who said the truth was important ?

Here are "the $$ numbers" which go with the charts in the 4/14/2014 charts…

Tuesday, April 15, 2014

From The Field… Back Taxes!


I are s…..

MOST UNUSUAL REQUEST OF THE MONTH:

The member was filling out the intake questionnaire for the VITA tax prep program.  He stopped and asked the member service rep, if she could help him.  She said sure, what was the  problem?

He said the only thing left to enter were the birth dates of his two children, which he couldn't remember.  But, that he did have them tattooed on his back, if she would be willing to lift up his T-shirt and write them down….

( What happened ?…. don't ask!!)


Monday, April 14, 2014

More Michael McKenna...



Legal Beagle or...
"BULL" dog?
Well, while we're at it, let's take one more look at last week's (4/8/2014) oath-defying testimony by NCUA's chief legal beagle before the House Financial Services Committee:*

*(Caution: this quote is from the "unclarified" written version and may therefore be subject to revision, denial, or subsequent pleas of temporary insanity.)

EXCERPT:

"The proposed risk-based capital [rule] also exempts two-thirds of credit unions, those with less than $50 million in assets, because they are not considered complex. Based on losses from several larger credit unions incurred during the past crisis, a final risk-based rule will be critical to protecting against future losses."

TWO OBSERVATIONS:


1.  "… not considered complex."  NCUA, in the proposed RBC rule, changes the Congressionally mandated determination of complexity to a simple, arbitrary formula: 
a) < $50 million in assets = not complex and b) > $50 million = complex. Pretty sophisticated "consideration" logic there, heh!? But, par for the course in the perverted regulatory logic underpinning much of NCUA's proposed RBC rule.    



2.  "Based on losses from several larger credit unions…"  NCUA has started using the "large credit unions are riskier" excuse at every opportunity, in every forum. Mr. McKenna of course parades the "party line" in his testimony.   

The chart which NCUA uses before general audiences to justify this "logic" is shown above; which would indicate that the Agency needs to shift exam resources from small, non-complex CUs to those "under-microregulated", larger, riskier CUs.  

Since NCUA is callously killing off smaller CUs at a very rapid pace - out of arrogance, indifference, or both!; it makes great, self-preservation logic for the Agency to fabricate a "large CU bogey-man" to justify their continued existence in a rapidly shrinking field. If not, NCUA might have to do what private sector businesses and all CUs do - cut budgets, work force and overhead.  NCUA is desperately trying to equate risk to asset size, which would justify a perpetually increasing Agency - without any real consideration of complexity or risk.

By the way, would you like to see the risk chart NCUA uses internally (don't ask me who sent it!)….