Morning Reads 12/5/2012

December 5, 2012 7:00 am

by Ron Daniels · 33 comments

The flu is back in town, the flu is back in town. Spread the word around.

Lockheed is planning for “Texas: The Country,” by moving over 500 jobs from “Atlanta: the State” to Fort Worth.

A couple of Postal Workers from Georgia plead guilty to stealing checks in Federal court. Maybe this is why it took me two weeks longer than friends in Macon to receive a letter in Warner Robins.

Georgian Banks are bouncing back, according to the FDIC. Dear General Assembly, maybe you need to change the law in such a way as to prevent Banks from simply foreclosing on property whenever they arbitrarily call performing notes due. Or not. You know, whatever floats your boat.

Georgia truck-driver responsible for death of Illinois lawman.

The World’s Oldest Woman has passed. She left this world peacefully, from Monroe, Georgia.

Might we be on the forefront of something relating to education and schools? Quite possibly. A different kind of testing.

A new push to boost the “research image” of Georgia universities. My advice: Horn-Rimmed Glasses. Everywhere.

Common sense prevails: lawmakers looking at “relaxing” parts of immigration reform.

Last Saturday, three football teams from Georgia rode into battle. This Saturday, Georgia Southern rides again. All I know to say is “GATA.” On a related note, what does the future hold for Mark Richt? And be glad you skipped this bar.

Reform for Georgia’s juvenile justice system may be coming.

And to end on a bad note, another factory closes involving Georgia.

Without much further ado, and I do love further adoing about much, here is your Wednesday Morning Music selection.

xdog December 5, 2012 at 7:25 am

I know Georgia’s in the company name but isn’t Chattanooga still in Tennessee?

49% of GOP voters nationally say they think that ACORN stole the election for President Obama. That’s down from 52% four years ago.

http://www.publicpolicypolling.com/main/2012/12/republicans-not-handling-election-results-well.html

Ron Daniels December 5, 2012 at 9:58 am

It’s dangerous to let me do anything without my daily allowance of coffee.

xdog December 5, 2012 at 12:13 pm

I’m not as brave as you, Ron. Life without coffee doesn’t happen over here.

Ed December 5, 2012 at 7:44 am

Nobel prize committee cuts their cash award by 20%.

As a a result I am done solving the world’s problems–please believe it.

Ed is Amazing December 5, 2012 at 7:48 am

Hey, who changed my name to accurately reflect the way the world sees me?

I’m honored.

Nathan December 5, 2012 at 8:39 am

::facepalm::

Harry December 5, 2012 at 8:24 am

U.S. corporate tax rate No. 1 in the world
http://money.cnn.com/2012/03/27/pf/taxes/corporate-taxes/index.htm

saltycracker December 5, 2012 at 9:09 am

Thanks to our tax laws it would be a rare U.S. company paying that rate.

Ed is Amazing December 5, 2012 at 9:13 am

If anyone/anything in the U.S. pays the full tax rate it is essentially a stupid tax.

Doug Deal December 5, 2012 at 8:25 am

The flu is back in town, the flu is back in town. Spread the word around.

I always get a special beta pre-release version from my two kids in day care.

Nathan December 5, 2012 at 8:39 am

I had it last week…..it ain’t fun.

View from Brookhaven December 5, 2012 at 8:51 am

Just what PP needed…more dubstep!

SallyForth December 5, 2012 at 7:27 pm

The fat guy political hack beat the crazy lady with a gun. Lots of luck, Brookhaven.

saltycracker December 5, 2012 at 9:11 am

If the banks are doing so good why not raise their borrowing rate to get them to clear out non- performing loans and pay the savers something?

Charlie December 5, 2012 at 9:37 am

By what mechanism do we raise their “borrowing rate”?

Doug Deal December 5, 2012 at 9:49 am

Magic pixie dust, spread liberally.

saltycracker December 5, 2012 at 7:44 pm

The federal reserve

Charlie December 5, 2012 at 7:46 pm

Please explain.

saltycracker December 5, 2012 at 9:27 pm

In looking for a Forbes article on the need to get Fannie/Freddie to refi credit worthy upside down folks at 4% or so and creep up bank borrowing rates so they’d better address non- performing assets this one popped up:

http://www.forbes.com/sites/lawrencehunter/2012/10/29/are-federal-reserve-regulated-banks-laundering-dirty-money/

Charlie December 5, 2012 at 9:35 pm

First, that’s probably the worst written article I’ve ever read from Forbes.

I’ve advocated refi’s of those upside down in housing in various columns here since 2008.

But I don’t see how this will force banks to lend more money, as the kind of lending you’re talking about isn’t the securitized housing mortgage market, but consumer and commercial lending. Or either I’m missing your point.

saltycracker December 5, 2012 at 9:43 pm

Drifting back to my original remark is that if banks had to pay a slowly increasing rate for money wouldn’t they get more aggressive in clearing non-performing assets – stale capital not being in play ?

Charlie December 5, 2012 at 10:11 pm

No, because that’s not how banking works. Banks make money on commercial (non-securitized) loans by margin. If rates were higher, they would be paying higher rates on deposits while they would be charging more for what they loan.

Banks make money off of lending by making the most loans possible (that get paid back). They don’t get paid for sitting on deposits. Thus my original question as to what mechanism would cause/force this.

Because what banks need are stable/sound regulations, and credit worthy borrowers. If they have that, they’ll make all the loans they can.

saltycracker December 6, 2012 at 12:01 pm

Guess I’m out of touch or misinformed. There are different types of banks but commerical banks, I thought, have not made non-securitized loans since the crisis. Many savers have moved to securities other than CD’s and many friends I know in private business primarily use private sources for loans.

Of course if rates were higher, they’d pay higher interest and get more deposits to put into play. I don’t have the numbers on non-performing assets but that has to have an impact on earnings, ability to loan and regulations on leverage.

Banks are pretty clever in waiting for the Feds to bail out bad loans, support selected homebuyers with deductions or checks, make short sales a tax free gift or come up with fees to overcome nuisance regulations.

There is a positive side if you can time it, buy bank stocks.

Charlie December 6, 2012 at 12:16 pm

Banks are much more concerned about preserving capital in this environment. The various regulators are crawling all over them to show that regulators are doing their jobs now, after virtually ignoring their job when alarm bells should have been raised in the first half of the 2000′s.

Thus, banks are hesitant, still, to loan to anyone with credit issues, cash flow issues, or anything that looks like a collateral deficient loan. As such, it’s hard for them to find customers. And as you said, they compete with other types of lenders (finance companies backed by commercial paper) that don’t have the same regulatory oversight. So the marginal loans get picked up by the finance companies, and the banks are in a regulatory environment where they are preserving capital while taking the most minimal risks possible.

As such, they’re maybe not lending what we would “like”, but they’re also not making loans that are likely to go bad while they continue to purge their books of the previously questionable loans.

Harry December 6, 2012 at 1:01 pm

Local banks have evolved into simple functions such as human interface processing of car loans and checking account customer servicing as needed. These are now automated service commodities, the banks having removed themselves from competitively making business loans and taking savings deposits. FHA etc. and Fed policy making often gets blamed but the internet has been the main killer of brick and mortar banking, just as with brick and mortar retailing. The TBTF banks are influencing and in turn being supported in nontransparent and mutually beneficial ways by governments, but also will eventually succumb to market forces.

Ron Daniels December 5, 2012 at 10:07 am

The better alternative is to force Banks to not take the low-road. The current setup allows Banks to call any loan they deem non-performing, they base that determination off the value of the property and the outstanding balance. In essence, Banks are calling notes due, or refusing to provide renewals on acquisition and development loans, not because they aren’t receiving payments, but because it is easier and safer to foreclose.

Foreclosing means you hurt developers, which hurts the economy, which hurts the bank.

LoyaltyIsMyHonor December 5, 2012 at 10:29 am

Never thought I’d see a Thin Lizzy-inspired post on PP.

Lea Thrace December 5, 2012 at 10:50 am

Anyone want to comment on the Disability Rights Treaty that failed to pass the Senate yesterday? I was absolutely saddened that it did not pass and it makes absolutely no sense to me why it didnt. The reasoning is completely unfounded and TO ME is rooted in this whole stupid conspiracy theory that the UN is trying to take over the US (See Agenda 21 crazyness). Come on people. The treaty was written based on the US ADA. Get a grip.

http://politicalticker.blogs.cnn.com/2012/12/04/despite-dole-appearance-senate-fails-to-ratify-disabilities-treaty/

David C December 5, 2012 at 10:59 am

And both our profiles in courage, Isakson and Chambliss voted no rather than upset the crazy lobby.

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=112&session=2&vote=00219

benevolus December 5, 2012 at 12:20 pm

I guess for some people, government is not allowed to try to make the world a better place. The only thing government can do is get out of the way so that people can fight their way out of the caste they find themselves in completely on their own.

Harry December 6, 2012 at 1:12 am

Government will never make the world a better place as long as special interests are in the drivers seat.

benevolus December 6, 2012 at 5:58 pm

I think I agree with that!

John Konop December 5, 2012 at 1:41 pm

I saw the Georgia vs. Georgia Tech basketball game last night. Georgia looks terrible, I do not think they will win more than 9 games this season. Do not understand it, Athens should be an easy place to recruit……………Georgia should have a top 25 team………..

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