Jeff Pelline's Sierra Foothills Report

The proposed out-of-court settlement of the AtPac case is discussed here:
settle

A predictable ending to this long-running lawsuit, which some alleged had small-town political undercurrents.

Insurance companies seek the path of least resistance — picking up most of the tab for the defendant and the plaintiff gets a settlement.

In this case the settlement was $1.9 million (including lawyer’s fees), while the Rood Center’s exposure is its $100,000 deductible.

“The total cost to the county in this matter is $100,000, the county’s self-insured retention,” according to a memo. “There are no other costs to the county.”

Why would the Rood Center risk more than $100,000 to let the case go further? It wouldn’t, so “justice is served.”

This is another good example of why legal reform is called for — just like health reform, and why lawyers are held in even lower esteem than journalists.

There was never any evidence of financial harm. There was never any evidence of “corruption” in the clerk-recorder’s office, either.

This won’t change the political landscape one iota. If he chooses to run again Greg Diaz will likely be re-elected, because he’s the most qualified.

Most of all, the hard right that pushed so hard in this case will get no more traction. They’ll just have to look themselves in the mirror and ask if they’re hypocrites when it comes to “government waste.”

Filed under: Uncategorized | 14 Comments »

Editor’s note: Amid the ongoing problems at Citizens Bank, often reported here (see links below), more community banks are expected to fail, because they became overexposed to construction & development and commercial real estate loans between 2003 and 2007. The SeekingAlpha.com analysis is here. (SeekingAlpha is a well-regarded site for financial and stock market news and analysis):

“The glut of unfinished real estate projects funded by Commercial Real Estate including Construction & Development loans has caused the wave of bank failures that began in 2008; Only 25 banks failed in 2008. 140 banks failed in 2009 with a peak of 50 in the third quarter. 157 banks failed in 2010.

* 48 banks have failed year to date in 2011
* 370 banks have failed since the end of 2007
* I still predict 500 to 800 bank failures in total by the end of 2012 into 2013.

Community Banks became overexposed to C&D and CRE loans between 2003 and 2007 and these loans still clog the banking system, but the FDIC for some unknown reason has slowed the seizure of banks that should be shuddered.

* The FDIC List of Problem Banks rose by 4 in the first quarter to 888 from 884, which is 11.7% of the 7,574 FDIC-insured financial institutions.
* 759 of the 7,574 FDIC-Insured Financial Institutions are overexposed to Construction & Development loans.
* Another 1,466 FDIC insured banks are overexposed to nonfarm, nonresidential real estate loans.
* A total of 2,225 community banks are thus overexposed to CRE loans, which is 29.4% of all banks that still need to unwind risk exposures.
* Looking at Pipeline Risk, which is the ratio of CRE loans to CRE loan commitments, 3,810 community banks have a Pipeline of 80% or higher of their real estate loans funded, which is 50.3% of all FDIC- insured financial institutions.
* C&D loans still total $295.5 billion and including nonfarm, non-residential real estate loans CRE loans total $1.06 trillion, thus a total of $1.356 trillion in legacy problem loans remain on bank balance sheets.

Put the blame for this overexposure on the US Treasury, Federal Reserve and FDIC who ignored their own regulatory guidelines put in place at the end of 2006.
Back in the fall of 2005, the Federal Reserve, US Treasury and the Federal Deposit Insurance Corporation (FDIC) realized that community banks were loaning funds to the housing and real estate markets at a pace above what these regulators thought prudent. Guidelines were set and monitored via quarterly filings to the FDIC. These guidelines were formalized by the end of 2006. They included the following stipulations:
Overexposure to construction and development loans: The first guideline states that if loans for construction, land development, and other land are 100% or more of total risk capital, the institution is considered to have loan concentrations above prudent risk levels, and should have heightened risk management practices.
Overexposure to construction and development loans including loans secured by multifamily and commercial properties: If loans for construction, land development, and other land, and loans secured by multifamily and commercial property are 300% or more of total risk capital, the institution would also be considered to have a CRE concentrations above prudent levels, and should employ heightened risk management practices.”

Citizens Bank:

• “More hurdles for Citizens Bank,” documents reveal.”
http://sierrafoothillsreport.com/2010/08/05/more-hurdles-for-citizens-bank-documents-reveal/
•”Scoop: Clock ticking on plans to recapitalize Citizens Bank, new filing shows”
http://sierrafoothillsreport.com/2011/02/17/scoop-clock-ticking-on-plans-to-recapitalize-citizens-bank-new-filing-shows/
•”Citizens’ restated loss shows real estate woes, need for “watchdogs”
http://sierrafoothillsreport.com/2009/09/11/10469/
•Can Citizens Bank remain independent?
http://sierrafoothillsreport.com/2010/08/07/can-citizens-bank-remain-independent-2/
•”Shakeup continues at Citizens — media finally catches on”
http://sierrafoothillsreport.com/2009/07/31/citizens-bank-names-new-chief-executive/

•”How newspapers cover business/advertisers”
http://sierrafoothillsreport.com/2009/06/23/how-newspapers-cover-their-advertisers-and-business/
•”Scoop: Citizens chief credit officer disappears from Web site
http://sierrafoothillsreport.com/2009/07/10/citizens-chief-credit-officer-gone-from-web-site/

Filed under: Uncategorized | Leave a Comment »

“President Barack Obama is winning the battle for public opinion in the negotiations to raise the debt ceiling, with the overwhelming majority disapproving of the way Republicans are handling it – even most GOP voters, according to a new poll on Monday,” Politico is reporting.

“Seventy-one percent of Americans surveyed for a CBS News poll released Monday morning say they oppose how Republicans are handling negotiations, while just 21 percent approve. In contrast, 48 percent disapprove of the president’s role in the talks, while 43 percent approve.

“Congressional Democrats don’t do quite as well as Obama, but are still polling better than their GOP colleagues, with 48 percent of those surveyed saying they disapprove of the Democrats’ handling of the talks, while 31 percent approve.

“Even among Republicans surveyed, the party led by Speaker John Boehner (R-Ohio) in the House isn’t faring all that well, with 51 percent saying they disapprove of how the party is handling the negotiations. Meanwhile, 32 percent of Democrats say they disapprove of how congressional Democrats are handling the talks, while 22 percent disapprove of the president’s handling.

The rest of the article is here.

Also check out GOP’s hard right shift in debt talks may put deal at risk” here.

Filed under: Uncategorized | 5 Comments »

“The thrust of this segment on “Fox & Friends” (watch the video below): The media is piling on the News Corp. phone hacking scandal; there are huge problems in the country, so why all the attention on News of the World? “Fox & Friends,” of course, is a program on the Fox News Channel, a News Corp. property,” as the Washington Post reports.

Going forward, read “What’s next for News Corp. and its worlds” by Jeff Jarvis on BuzzMachine.

“In the U.S., the right-wing depends on Fox News and is surely getting nervous about its fate,” Jarvis writes. “It is becoming — if one can imagine this — even more of a laughingstock than it already was as it ignores or defends Murdoch in the scandal. I could imagine Roger Ailes assembling rich Republicans to engineer a leveraged buyout and keep it safe for them in time for the election. Then there could be no doubt of its role as a propaganda arm of the right.”

Filed under: Uncategorized | 16 Comments »