Saturday, December 31, 2016

Exta! Exta! Fee Checking!!!!!

"Evethings "fee" at the TBTF's !!!

Bank of America, 
JP Mogan 
Sun Tust and Wells Fago have all announced a geat new sevice:

Fee Checking !!!!

(So, what "r" you waiting for?  Celabate!)

Friday, December 30, 2016

NCUA: Request For Comments FOIA... Part 3


- Senator Daniel Patrick Moynihan

As a review of Democratic Senator Daniel Patrick Moynihan's book "Secrecy", by CNN noted:

"Moynihan's indictment of "secrecy-as-official-policy" is ringing.  If the government [or an "independent federal agency"] refuses to tell its citizens [or credit unions] the truth, they are denied their right to make informed decisions.  Moynihan sees another danger in the cult of secrecy: governmental self-delusion. A government [or an "independent federal agency"] which won't share its "secrets" with the governed [credit unions] does more than foster cynicism, Moynihan argues;... 

... it undercuts the foundation of democracy.

NCUA: Request For Comment On The FOIA... Part 2



[... and from whom?]

Thursday, December 29, 2016

NCUA: Request For Comments On FOIA... Part 1


A Doubting Thomas...

"It is only error, not truth, that shrinks from inquiry."
                        - Thomas Paine

NCUA has developed a habit and attitude for not listening to sound advice - even from "Founding Father" types like Thomas Paine - which has led to the unfortunate view, that in terms of transparency NCUA's...

Wednesday, December 28, 2016

An NCUA Premium Assessment... Another Forecasting Turkey From The Robusterians!

Spot the trend?
Some non-competency validated and unaccountable
robusticowboys at a certain unnamed regulatory agency (... "if you know whadda mean Barn"...) have been collaborating once again with the capital market specialists in adjacent cribicles to fashion a non-transparent future for we of lesser understanding. Their fruitcake forecasts and foolish flapdoodle comes at a "premium price" for credit unions! 

These boys and girls, who appear to have too little to do on a regular, daily basis, are using their OTR-sponsored play periods to invent some pretty bizarre, highly unusual, and mostly irrelevant trend lines for the NCUSIF equity ratio.   All released with a straight face! 
"The Great Robusterini"

Their future projections, based on lingerie logic [pretty flimsy!], give a whole new meaning to the concept of "regression" analysis - in this case "fabricated model parameters" to support their pre-conceived and consistently erroneous views of interest rates, economic markets, and reality.  They repeatedly assure their critics that they are not stand-up comics, but the doubt persists.

Spontaneous Robustion!
As an example, according to the latest ruminations of economists of the robusterian ilk, the typical turkey in America has increased in average weight from 13.2 lbs. in 1929 to an average weight of 30 lbs. [Source: The Economist] in 2016.  Based on this definitive, fully "r-squared" [as in "robust" squared] trend line,  the Robusterians will probably forecast that the average American turkey will weigh 300 lbs. by the end of this century, and may top 16,000 lbs. [8 tons a piece!] by Y3K!

The Real "Big Bird"!

Based on this robust forecast, turkeys - rather than the meek - may inherit the earth... and those turkeys are going to be very hungry and looking for trouble around Thanksgiving! Does your credit union have a plan for this threat to the safety and soundness of the "insurance fund"?

Additionally, the heads-with-point specialists have invented a correlation between rising turkey weights and...

Tuesday, December 27, 2016

Monday, December 26, 2016

20/20 Visionaries...

" Today, part of the mission of our credit union in 2017 is to help NCUA learn how to substitute foresight for hindsight."

Saturday, December 24, 2016

Christmas in D.C.....



Now More Than Ever....

"Tyranny, like hell, is not easily conquered."

- Thomas Paine
(December 23, 1776)   

Friday, December 23, 2016

The Four Stages of Christmas...

1.)  You believe in Santa Claus.

2.)  You don't believe in Santa Claus.

3.)  You are Santa Claus.

Thursday, December 22, 2016

If You Wanted To Tell Congress What Credit Unions Are Really All About...



... no finer example of the cooperative,
"People Helping People" philosophy.

Thank you Marvel
... right there with you m'am!



Wednesday, December 21, 2016

What Does Mulvaney Have To Do With This?

A "senior moment" when
you are only 30...?!?
 Seems like some "millennials" are having difficulty with memory lapses - really fear for you as you get older, if your short term memory is already "kaput"!

So, the question posed was: "Why do you think Rep. Mick Mulvaney has "a problem" with NCUA?"

Last year in July, the Chair of NCUA, Ms. Matz, appeared before a Congressional hearing conducted by the House Financial Services Committee - kinda' like being called to the principal's office in middle school! And, NCUA and the entire credit union movement really  "got spanked"! 

Mr. Mulvaney's questioning was most excruciating and excoriating, as you can see...

... and then it got worse...

Tuesday, December 20, 2016

Monday, December 19, 2016

"...I Can Read The Writing On The Wall..."

Rep. Mick Mulvaney (R-SC)
[Always "excited" by NCUA...!]

But apparently the NCUA can't "read"...

... or won't

"Trump Nominates NCUA Critic Rep. Mick Mulvaney..." [CUTimes link]

Could this be NCUA's...

Simple Question... Time For An Answer

It would appear to most experienced and informed observers that the recent investment of  CU share insurance deposits on behalf of the NCUSIF has been thoughtless - to the point of reckless disregard of prudence. 

But those very same capital market folks, who were dead-certain they understood the Corporates, remain in place today and their "Titanic self-assurance" remains undaunted by their mishaps with icebergs. After all: "Ice Happens!"

But more than enough has been "bitched,
griped, and whined" about the mismanagement of the NCUSIF, whether it's inept investments, excessive OTR draw downs "justified" by "manufactured cost accounting analyses", or purposeful misrepresentation of FCU regulatory fees; it's time to stop. Why?

Because, if the NCUA, as manager of the NCUSIF, does not have a fiduciary responsibility  [Chairman Metsger indicates that NCUA does have an FR!] to the CU depositors, who own the Fund, then NCUA - right or wrong - may do with the Fund as it sees fit - then everyone needs to hush and move on.

Wouldn't it be appropriate for one of the major trades - NAFCU, CUNA, NASCUS - to seek a formal, public legal opinion on this question...


And why is the question crucial to CUs?

Sunday, December 18, 2016

Pre-Season Favorites: Dear Santa…..

Making a list, checking it...

I also want to be taller than my brother and a trash pack.  

* I would like a little baby winner dog.  

I love my stomps you brought me last year.  

Please give me these things, if you do I will be good. 

 How are you? Are you lactose intolerant, if so I can leave you some soy milk.  I might write another letter because I'm not done thinking what I won't yet.

* I want a magic bell.  I am three feet tall.  I have been good to my big sister even if she is so mean and all about horses.  

* I would like some pink roller skates and whatever else you think I might like to have.  If we're not home you can take my stuff to my Grandma's house.

* I live in a house right somewhere; it has bricks on it.  My dad always eats your cookies.  We are out of milk but I can leave sweet tea.  I saw you on TV yesterday.  I want a baby that eats cookies and drinks coffee.

And last but not least...

Saturday, December 17, 2016

Southern Comfort...


Making A List, Checking It Twice...

Ho - Ho - Ho !!

Dear Santa,

You are the best! How have you been doing? I love your work. How is Ms. Claus?  How are the reindeer?  You have a great family. Is it warm this time of year at the North Pole?

I am seven years old.  I live in the house with the tall swing set.  You go left, then you go right, and you will be at my house.  I have been so good this year and have not misbehaved for the most part, because I knew the elves were watching.  I got purple at school.  I am coming to your parade.  I hope I am on the nice list….

Friday, December 16, 2016

NCUA: The Art of the Deal!

Remember that $800 million portfolio of long-term, 9/10 year treasuries purchased by the NCUSIF over the last couple of months? The transaction which "may-be-an-example-of-why" Mr. Trump is our President-elect!

Well relax, yesterday the value only... 

Thursday, December 15, 2016

The Land of OZ.... NCUSIF Unrealized Losses

What did 'ya need "to get the message",
 a registered letter!?!
While waiting around yesterday for the FED's "surprise"
announcement  (... a surprise only to the "hazards of Duke"!) of an interest rate change, noticed that the agenda [here's the link] for today's NCUA Board meeting is packed with "interesting stuff", like the Corporate Stabilization Fund and NGN Legacy Asset Disposition Strategy - may well be worth "streaming", starts at 10 a.m.! 

"Pay no attention to that ("robust")
man behind the curtain..."
Hopefully the Board, while they are at it, will ask the staff to discuss their NCUSIF "investment strategy" during the "open session".

We've been talking about 1) repositioning and shortening the NCUSIF portfolio in the face of an announced FED strategy of raising rates (perhaps with 3 more rate increases in 2017!), and in doing so, 2) "capturing" and booking the $247 million in "unrealized gains" reported by Mr. Rendell L. Jones, NCUSIF CFO, at October 31, 2016.  

As you will recall the unrealized gains were $457+ million in June, 2016, were $381+ million in September, 2016 and were $247+ million in October - "capturing" those gains before rates rose further was a great opportunity to avoid that $300 million ("3bps") assessment on credit unions next year!

Well, as part of the reporting for the meeting today, NCUA has published the November 30, 2016 NCUSIF financials and that $247 million unrealized gain has grown into a...

Wednesday, December 14, 2016

The NCUA Budget: Easy Money... "Unlucky 13" - Part 2! Odd or Oz?

Long-term investments...
Odd? or OZ?
Just wanted to give you a quick update on those "peculiar" $800 million in long-term treasury bonds purchased by the NCUSIF "robust, investment munchkins" during August, September, and October, 2016. For most folks it's hard to comprehend "going long" in the face of the "declared intentions" of the FED to raise rates!

Peculiar, most peculiar....!
As previously noted, the market value of those $800 million in bonds had declined to $750 million at 12/7/2016 - a market value loss of $50 million in less than 60 days! 

By Tuesday - 12/13/2016 - the bonds had dropped an additional $7 million in value to $743 million.

And, with the Fed hike in rates on Wednesday - 12/14/2016; at the end of the day on the 14th, the new value of those $800 million in bonds was...

The NCUA Budget: Easy Money... Part "Unlucky 13"


So, for the last several weeks you've had to suffer through a discussion of the "management" of the NCUSIF by "NCUA's finest". Even heard a proposal to NCUA Chair Metsger to help him increase earnings on the NCUSIF next year by $100 million+, but evidently he missed the message...

Rates are going up... "ACT"!
Yesterday, in Part 12 [here's the link], we went over how NCUA might improve earnings and reduce risks by repositioning the NCUSIF portfolio. Not that difficult to do with treasuries, which are fully liquid. Sell all of the portfolio and book the NCUSIF unrealized gain balance of $247million (the balance last reported on 10/31/2016) and immediately buy the identical securities back. Voila! you have increased the earnings by $247 million, increased the NCUSIF fund balance by $247 million, and you no longer need to assess credit unions next year for $300 million!

Only problem is NCUA has failed to "ACT" and this afternoon, the Federal Reserve Board is going to raise rates ( the FED has been "promising" to do since August!).  Let's take a look at what happens to an "unrealized gain" when rates go up...

Tuesday, December 13, 2016

The NCUA Budget: Easy Money ...Part 12

Alright, last call! (... at last!) Certain you've had more than enough discussion of the share insurance fund - the NCUSIF.

Guess at least we all learned that the NCUSIF is invested in U.S. treasuries, over a 10 year, equally balanced "ladder". And, we now know that the average maturity is 5 years, the current average yield is 1.82%, and that the projected earnings of the NCUSIF are not enough to support the targeted equity ratio of the Fund and the growing budgetary needs of the NCUA. 

We only have one idea,
... assess the credit unions!
The NCUA senior staff believes the only answer to this dilemma is to assess credit unions $300 to $600 million next year. 

Astute readers have pointed to another alternative, which may now have eluded the Agency ... since it has failed to "ACT"... or even ask!

Here's how the NCUSIF could make a 
"quick $247 million"
[based on NCUSIF's 10/31/16 financials]
 to bolster the Fund...

The NCUA Budget: Easy Money...Part 11 3/4


Remember the $800 million [see Part 7 - here's the link] of your NCUSIF insurance deposit that the investment "NCUA Pros" went long with over the last 90 days?

We reported less than a week ago on 12/7/2016,  that the $800 million investment had dropped in value to $750 million!

Well, rates have changed and the new value is...

Monday, December 12, 2016

The NCUA Budget: Easy Money... Part 11 1/2

We've talked so much about the NCUSIF "ladder" investment strategy that I thought you might like to see what the actual NCUSIF portfolio looked like at the end of December, 2015:

We discussed a hypothetical 10 year ladder with 10 different "steps" from 1 year to 10 years. You'll note from the 2015 year-end chart that the NCUA investment "robusterians" actually have two additional steps for "Overnight and "1-6 months", but don't worry the  principles are the same - as you see, your NCUSIF deposits are in fact spread over a 10 year ladder! And, you'll note the portfolio balance at 12/31/2015 is @ $12 billion ($11.9B), the average maturity is 4.89 years, and the average yield is 1.90%.

Let's look at how the NCUA investment "mavens" have changed the portfolio during 2016:

Sunday, December 11, 2016

The NCUA Budget: Easy Money... Part 11

Sorry to jam you with so many posts, but time is running out for the NCUA Board to "ACT" on the NCUSIF to help the CU folks "on the bus"- the Federal Reserve Board meets Tuesday, the NCUA Board meets Thursday.

Let's go back to that NCUSIF investment ladder that we discussed in Part 9 [here's the link] and Part 10 [here's the link]. As we know, the NCUSIF investment ladder has a 10 year time horizon, is invested in treasury bonds, with equal amounts of the $13 billion portfolio (@ $1.3 billion) invested on each yearly "step". We also know that NCUA reinvests the maturing "1 yr step" in 10 year treasury bonds to maintain "the ladder" - that's why the NCUA "investment birthers" bought $800 million in long-term treasuries over the last 90 days!

Yikes! This sounds scary...
Now bear with me 'cause we're going to construct a hypothetical, "retrospective" NCUSIF investment ladder, reflecting the NCUA's current NCUSIF investment strategy - which by the way was only approved in February, 2013...

The NCUA Budget: Easy Money... Part 10 1/2

NCUSIF investment elves have
a little surprise for you - 

... coal comfort!
Well, guess we've ended up doing the "Twelve Days of Christmas" here haven't we, with this lengthy review of the NCUSIF! Folks are not going to like the large lumps of financial liability that the NCUA "investment Santas" are ("robustly") stuffing into credit union stockings, as we speak.


But, we need to pause to remember what NCUA Chair Rick Metsger said about the NCUSIF: 

"We have a fiduciary responsibility to the Share Insurance Fund, and to U.S. taxpayers and we will not abrogate that responsibility or turn it over to anyone else." [here's your link]

In parsing out that commitment from Chair Metsger, it should be noted that the "We..." means the NCUA Board, which by law does "own" the fiduciary responsibility for the NCUSIF. And, the "... anyone else..." to which the NCUA Board can't "... abrogate that responsibility..." includes the NCUA management staff!

All credit unions
are on board...
The NCUSIF is like a school bus with the NCUA Board responsible for selecting, monitoring, and directing the "bus drivers" - and, as with our school kids, there is a lot at stake with how seriously that duty and responsibility is performed...