LyrArc Article Gist
Ford's plans to cut product capacity in Europe by closing the car plant in Genk, Belgium, and indications for shutting down a plant in the UK. After the plant closures Ford will operate at 85% of capacity by 2015 instead of 71%, according to a Barclays analyst. The action taken by Ford takes place as pretax losses for 2012 mount to $1.3 billion, acccording to Morgan Stanley.

LyrArc Article Gist
Galston of the Brookings Institution says globalization has hurt workers in manufacturing with job losses and declining incomes. It has produced outcomes that have favored some industries such as tech, and not others such as automobiles which in the past helped create the broad middle class by offering good paying jobs to people with less than a college education. Immigration has created an issue that political leaders outside of the main parties have appealed to in France, the U.S. and Britain. The result is a polarization in the voters that has rarely been seen to this extent before. The middle class in the period from the 1950's to the 1980's is not the middle class that we see today in Europe and the U.S. The 2008 financial crisis added to the problems with the slow and uncertain recovery for some groups such as white men, the less educated, students, and people on minimum wage. 

LyrArc Article Gist
The $2 billion losses at Chase highlights the need for completing the Volcker Rule with language that prevents banks engaging in risky trading activities. Former FDIC chairman Sheila Bair says precise language is needed to clarify the defiinition of hedging after the losses by a single trader's complex hedging bet in London. Individual traders have too much authority in existing trading arrangements to make complicated bets in finanial markets. Large losses were incurred by Swiss bank UBS when an individual trader in London made risky bets in 2011, raising all sorts of questions about the bank's risk management systems.

LyrArc Article Gist
The failure of regulators is one of the features of the last decade leading to the losses of capital that could have been better allocated to infrastructure, health education and paying down debt in the U.S. and Europe. This WSJ report says fintech or financial technology companies faced little regulation or critical oversight from regulators as regulators tried to foster growth in that sector. This puts more burden on shareholders to be vigilant, it says. Wirecard went into insolvency with huge losses and debt and accounts in the Philippines for over a billion dollars that were later proved not to exist. The astonishing aspect of the Wirecard scandal is the way German regulators not only did not investigate but pushed back against critics of the company's finances, that there was something fishy about the finances. Wirecard was established in 1999, and is described as a slow-burning story since 2016 when the stock price took off for a wild ride. This report says government regulators are relaxing important rules in the hope of coming up with a winner- this is proving to be a dangerous exercize and an exercize in folly, as it leads to losses of capital with no one taking responsibility among government officials or regulators. In the case of Wirecard the German officials even filed a criminal complaint against accusers, and banned short selling. of stock.    British and European financial watchdogs are acting as cheerleaders and watchdogs at the same time says the WSJ. Watch out it says when regulators play this kind of double role. During the financial crisis of 2008 the revolving door between companies being regulated and the regulatory agencies themselves was a defining feature of that period leading to huge losses of capital. Today this has taken on a new  and additional dimension, each time making things worse, even as infrastructure investments, investments in health and education are being deprived of capital because they benefit the public, and are not a benefit to small groups of well connected people willing to flagrantly conduct activities such as setting up accounts that do not exist for over a billion dollars.   ...

LyrArc Article Gist
JP Morgan agrees to a legal settlement of $4.5 billion for losses to investors from toxic mortgage securities sold by Washington Mutual and Bear Stearns. JP Morgan acquired the two financial institutions following the 2008 financial crisis. The investor group includes Black Rock Inc, Allianz's PIMCO, MetLife, and Goldman Sachs. The same group of institutional investors settled with Bank of America for $8.5 billion. JP Morgan has set aside $23 billion at the end of the third quarter for legal losses. The settlements now are at about $20 billion. A private suit by Deutsche Bank National Trust Company representing 100 trusts for poorly perfoming bonds sold by Washington Mutual, and seeking $10 billion is still pending. The FDIC is arguing that JP Morgan is liable because it inherited the liabilities when it acquired Washington Mutual. JP Morgan says the acquisition was made as part of a government arranged acquisition at the height of the 2008 financial crisis. It says the FDIC receivership that took Washington Mutual's assets when it failed in September 2008 should pay for any claims related to misrepresentation and false promises for the bonds. ...

LyrArc Article Gist
The huge losses at Credit Suisse after the collapse of Archegos Capital Management. One more instance of misallocation of funds in the way capital markets are functioning today at the expense of much needed infrastructure health and other needs of countries in Europe.

LyrArc Article Gist
The failure of private long term care insurance in the US and the need for a government subsidized and public program that requires people to carry long term care as in Netherlands and Singapore. Only about 3-4% of people over 51 have long term care insurance, leaving 95% of the population dependent on what Medicare and their savings can provide. The industry is unprofitable making at most $1 billion in one year after losses in three of the last four years when claims for 345,000 persons cost $13 billion.

LyrArc Article Gist
RBS announced extra provisions for legal issues and settlements of 3 billion pounds in Jan 2014. RBS is also taking impairment charge of 4-4.5 billion pounds for an internal "bad bank" to cover losses from the 2008 financial crisis.

LyrArc Article Gist
William Galston in the WSJ says outright for the first time in the WSJ that the years from the last term of Clinton, through the Bush, and Obama administrations were an outright failure for the American people. He documents the losses- 5.7 million job losses in 2000-2010 as Clinton opened China's entry into the World Trade Organization without any precautions taken to prevent abuse of world trading rules after the experience with Japan. Worse no help to the displaced workers which fed into the resentment of workers. Sex scandals weakened the presidency and acted as the major distraction during the last years of Bill Clinton. Over the administrations of Bush and Obama almost the entire US manufacturing base was dismantled and shipped to China. Pharmaceutical companies were allowed to charge recklessly when Bush disallowed Medicare to negotiate prices for pharmacueticals placing additional burdens on the American people. Bush started long wars in Afghanistan and Iraq that cost the US dearly in lives and resources wasted with no vital US interests at stake as in Europe. This distracted attention from problems simmering at home. Obama continued these wars preferring to focus on reelection. The migration crisis, the neglect of infrastructure worsened during this period. The Bush deregulation of banks led to the 2009 world banking crisis that led to large layoffs worsening a bad situation from outshoring and creating a class of unemployed, and shrinking household wealth and savings. The Biden administration, the first Trump administration and now the second have started the process of revival of the US. And yet Biden, DJT are relative outsiders who came to the presidency and were not favored in the established order of the 1990-2016 period. One can say about Blair, Cameron, Boris Johnson in Britain, about Clinton, Bush, Obama in the US, and Schroeder, Merkel in Germany that the leadership was mediocre and failed the people of Europe and the people of America.     ...

LyrArc Article Gist
All the danger signs are flashing red says Prof. Simon Johnson of MIT's Sloan School of Management, as Citigroup stock loses 26% on November 20, 2008 and 50% of the stock's value in just 4 days. The fear is that Citigroup faces still bigger losses as home mortgages, credit card loans, commercial real estate debt all deteriorate further in a deep economic downturn, and that Citigroup will need large sums of additional capital from the government. There is similiar to the Detroit auto industry executives and public opinion a big gap in how Wall Street investors and Citigroup executives see the company's situation.

LyrArc Article Gist
Increased use of remote work is leading to vacant office space with occupancy of office towers falling. This has led to the coining of the term "urban doom loop" as more and more office space goes vacant and real estate companies default on mortgages or lose money. Less use of office space hits retail stores in the same area leading to losses in the state including a hit to tax revenues. This is expected to have an outsize effect on midsize cities such as Charlotte or Indianapolis. This is being watched closely so that it does not affect the Us economy and growth.

LyrArc Article Gist
The move by the US Fed to cover the deposits at the Silicon Valley Bank to limit the fallout of the bank's collapse on the US banking system. By taking the step that the bank posed a systemic risk the government's deposit insurance fund will cover all deposits at the two banks rather than the standard $250,000. Any losses will be covered by a special assessment on banks and there will be no cost to taxpayers.

LyrArc Article Gist
Clandestine loans, bribes and other payoffs helped block inquiries into Kabul Bank. Kabul Bank, Afghanistan's largest bank has piled up losses of $900 million. The chairman of the bank has spent $150 million of the bank's money to buy Dubai villas in his and his wife's name. Among those receiving money are the Finance Minister, Education Minister and a former Interior Minister. The bank nearly collapsed in Sept 2010. The situation at Kabul Bank shows a lack of progress in anti-corruption efforts in Afghnistan.

LyrArc Article Gist
After severe losses Hertz, Avis and Enterprise sold much of their fleet of rental cars. Today they are having to meet rising demand with fleet of cars about 40% below normal levels. A chip shortage is reducing the supply of new cars having an impact on travel and on airlines.

LyrArc Article Gist
Bank of America CEO loses confidence in Thain after a brief meeting on January 22, 2009, in which Thain was asked about mounting losses at Merrill, which Lewis had learned of from other Merrill executives and not from Thain. Lewis says he could not get agood explanation of what was happening or why. Thain was head of Merrill when Bank of America made the $50 billion acquisition of Merrill on Sept 15, the same week that Lehman Brothers collapsed. Merrill was in a perilous situation with the government intervening to arrange the acquisition on short notice.