In public remarks Thursday, President Obama said he wants to give federal regulators the power to restrict the size of the nation's largest financial institutions and the scope of their risk-taking ventures, such as investing in hedge funds. The president says the financial system is still operating under pre-crisis rules and it's time for reform. Banking industry lobbyists are gearing up to hold their ground on this one, but the president says he's ready for Wall Street's opposition. "If these folks want a fight, it's a fight I'm willing to have," Obama said.
Although short sales are likely to increase in 2010, the jump in these transactions is unlikely to have any real impact on the housing market, according to a new study by Housing Predictor. While more at-risk homeowners are turning to short sales as an alternative to foreclosure, Housing Predictor says the small number of short sales that are actually approved by banks represent less than 1 percent of all homes facing foreclosure.
For months, analysts and industry experts have said the downturn in the commercial real estate (CRE) sector won't be enough to send the financial system into a second crisis - that it won't be the dreaded "next shoe to drop" because exposure is isolated to smaller, regional banks. But FDIC Chairman Sheila Bair says that's not an accurate picture. In fact, the agency's data shows CRE noncurrent and charge-off rates are higher at banks with over one billion dollars in assets than at community banks.
Wells Fargo & Company reported fourth quarter diluted earnings of $394 million, or $.08 per share. The banks' numbers blew analysts' expectations out of the water - they were looking for a loss of $.01 cent a share. Wells Fargo's results got a big boost from its mortgage business, which produced $3.4 billion in income in the fourth quarter alone.
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