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Predicting the Next Banking Crisis Is a Fool’s Game. Not Learning From the Last One: Equally Foolish

Jeff For Banks

Finally, resolution of failing financial institutions requires that the deposit insurance fund be strongly capitalized with real reserves, not just federal guarantee.” To you, manage your interest rate risk. Before becoming desperate and trading interest rate risk for credit risk. percent in 2004, a decline of 1.1

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Guest Post: 2013 Economic Year in Review and Outlook by Banker Dorothy Jaworski

Jeff For Banks

Incidentally, your QE 1 to 3 programs ran for six years, accumulated three trillion dollars of securities, and pushed long term rates lower when your forward guidance could not do so. and Janney Capital Markets at 2.1% Businesses are still cautious in capital spending.

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Guest Post: Third Quarter Economic Update by Dorothy Jaworski

Jeff For Banks

First of all, if they continue to buy securities, they are removing many of the high quality securities from the marketplace, possibly causing a disruption or shortage in the markets. trillion of securities amassed during QE1 and QE2. I know I risk sounding like Charles Plosser, but so be it.

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Guest Post: Second Quarter Economic Update by Dorothy Jaworski

Jeff For Banks

Dimon and his bank have long been viewed as one of the best run banks in the world and leaders in risk management. They are even credited with developing one of the premier risk measurement systems called Value-at-Risk to measure daily losses that can occur at designated standard deviation intervals.

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Guest Post: 2nd Qtr Economic Review by Dorothy Jaworski

Jeff For Banks

Mutual funds and ETFs specializing in mortgage backed securities saw their worst quarter in terms of losses and outflows since 1992. In the past decade, we have seen several Treasury routs that resulted in huge selling in the markets, most notably in 2003-2004, 2005-2006, and 2009.

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Guest Post: 3rd Quarter Economic Review by Dorothy Jaworski

Jeff For Banks

Treasuries, Agencies, mortgage backed securities, corporate, municipals- all were battered because the markets believed that the Federal Reserve was about to cut the amount of, or “taper,” its $85 billion of monthly purchases of long term bonds. Dorothy has been with First Federal of Bucks County since November, 2004.

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Guest Post: Third Quarter Economic Update by Dorothy Jaworski

Jeff For Banks

Liquidity is becoming a problem for these banks, and with their stocks battered daily, they have no ready sources of capital. They also added that they will reinvest cash flows from their mortgage backed securities from their Quantitative Easing QE1 Program into more mortgage backed securities, rather than into Treasuries.

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