RSS Feed by Calculated Risk on 2/28/2010 03:29:00 PM
Sunday, February 28, 2010
Greece Bailout Plan and Further Austerity Measures moving forward
From Stephen Castle and Landon Thomas Jr. at the NY Times: Europe Union Moves Toward a Bailout of Greece
[T]he European Union is moving toward the first bailout in the history of its common currency, which is expected to involve loan guarantees from the German and French governments to encourage their banks to buy Greek debt.
Even as the negotiations continue, the bloc is insisting that Athens impose further, painful austerity measures ...
Weekly Summary and a Look Ahead
by Calculated Risk on 2/28/2010 11:55:00 AM
This will be a busy week for economic data, and the focus will be on the BLS February employment report to be released on Friday. The consensus is for a net loss of 50 to 80 thousand payroll jobs, and the unemployment rate to increase slightly to 9.8% (from 9.7%).
There is considerable debate on the impact of the snow storms on the employment report. The BLS will disclose and adjust for any snow related data collection issues, but some hiring might have been delayed because of the storms. However, if so, there will be a bounce back in March - however it is important to remember that the weekly unemployment claims were moving higher before the storms arrived. Also the temporary hiring for the 2010 Census will have increased slightly - I'm sure all of these issues will be widely discussed ...
On Monday, the BEA will release the Personal Income and Outlays report for January. This release is very useful for looking at both Personal Income and Personal Consumption Expenditures (PCE). Also on Monday, the ISM Manufacturing index (consensus is for expansion, but a slight decrease to 57.5% from 58.4%), and the January Construction Spending report from the Census Bureau (consensus is for a decline of 0.5%).
On Tuesday, the various manufacturers will release light vehicle sales for February. The consensus is for a decline to about 10.4 million on a Seasonally Adjusted Annual Rate (SAAR) basis from 10.8 million in January. Sales for Toyota will be closely watched. Also on Tuesday, the Personal Bankruptcy Filings estimate for February will be released.
1.2 Million to Lose Unemployment Benefits Today
by Calculated Risk on 2/28/2010 08:59:00 AM
Just a reminder ...
From John Schmid at the Journal Sentinel: Unemployment benefits for 1.2 million Americans could expire Sunday
Nearly 1.2 million unemployed Americans ... face an imminent cutoff of government unemployment checks if Congress cannot pass emergency legislation to extend federal benefits before funding expires Sunday.
Saturday, February 27, 2010
Fed Balance Sheet and MBS Purchases
by Calculated Risk on 2/27/2010 11:49:00 PM
Here is the Federal Reserve balance sheet break down from the Atlanta Fed weekly Financial Highlights:
Graph Source: Altanta Fed.
From the Atlanta Fed:
The balance sheet expanded $20 billion, to $2.3 trillion, for the week ended February 17.Holdings of agency debt and mortgage backed securities increased $49 billion while short-term lending to financials, specifically the Term Auction Credit Facility, declined by $23 billion.
Daily Show on BofA's Hidden Credit Card Fees
by Calculated Risk on 2/27/2010 06:59:00 PM
Some fun from the Daily Show. Link here if embed doesn't load.
Living Rent Free: Homeowners become Squatters
by Calculated Risk on 2/27/2010 02:48:00 PM
From Alana Semuels at the LA Times : Many borrowers in default stay put as lenders delay evictions
Throughout the country, people continue to default on their home loans -- but lenders have backed off on forced evictions, allowing many to remain in their homes, essentially rent-free.
Several factors are driving the trend, industry experts say, including government pressure on banks to modify loans and keep people in their homes.
And with a glut of inventory in places like Southern California's Inland Empire, Nevada and Arizona, lenders are loath to depress housing prices further by dumping more properties into a weak market.
Growth of Problem Banks (Unofficial)
by Calculated Risk on 2/27/2010 11:49:00 AM
By request here is a graph of the number of banks on the unofficial problem bank list.
We started posting the Unofficial Problem Bank list in early August 2009 (credit: surferdude808). The FDIC's official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are not made public.
CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest.
As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest. Some of this data is released with a lag, for example the FDIC announced the January enforcement actions yesterday.
Buffett on Housing
by Calculated Risk on 2/27/2010 08:33:00 AM
Here is Warren Buffett's annual letter to shareholders. The following is an excerpt on housing (Buffett focuses on manufactured housing because Berkshire owns Clayton Homes):
The [manufactured homes] industry is in shambles for two reasons, the first of which must be lived with if the U.S. economy is to recover. This reason concerns U.S. housing starts (including apartment units). In 2009, starts were 554,000, by far the lowest number in the 50 years for which we have data. Paradoxically, this is good news.
People thought it was good news a few years back when housing starts – the supply side of the picture – were running about two million annually. But household formations – the demand side – only amounted to about 1.2 million. After a few years of such imbalances, the country unsurprisingly ended up with far too many houses.
There were three ways to cure this overhang: (1) blow up a lot of houses, a tactic similar to the destruction of autos that occurred with the “cash-for-clunkers” program; (2) speed up household formations by, say, encouraging teenagers to cohabitate, a program not likely to suffer from a lack of volunteers or; (3) reduce new housing starts to a number far below the rate of household formations.
Friday, February 26, 2010
Unofficial Problem Bank List increases Significantly
by Calculated Risk on 2/26/2010 11:11:00 PM
This is an unofficial list of Problem Banks compiled only from public sources. Changes and comments from surferdude808:
The Unofficial Problem Bank List underwent major changes during the week as aggregate assets for all institutions were updated to 2009q4 from 2009q3 and the FDIC finally released its enforcement actions issued during January 2010.
The list now includes 644 institutions, up from 617 last week, as 33 institutions with assets of $12 billion were added while 6 with assets of $1.3 billion were deleted. Despite the additions, aggregate assets fell from $329 billion to $326 billion. For the 616 institutions that stayed on the list from last week, their aggregate assets dropped $13.8 billion during the fourth quarter.
Bank Failure #22: Rainier Pacific Bank, Tacoma, Washington
by Calculated Risk on 2/26/2010 09:12:00 PM
Day of reckoning has come
As sun sets westward
by Soylent Green is People
From the FDIC: Umpqua Bank, Roseburg, Oregon, Assumes All of the Deposits of Rainier Pacific Bank, Tacoma, Washington
Rainier Pacific Bank, Tacoma, Washington, was closed today by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver....
As of December 31, 2009, Rainier Pacific Bank had approximately $717.8 million in total assets and $446.2 million in total deposits. ...
