by Calculated Risk on 3/20/2009 07:10:00 PM

From National Credit Union Administration: NCUA Conserves U.S. Central and Western Corporate Credit Unions

The National Credit Union Administration Board today placed U.S. Central Federal Credit Union, Lenexa, Kansas, and Western Corporate (WesCorp) Federal Credit Union, San Dimas, California, into conservatorship to stabilize the corporate credit union system and resolve balance sheet issues. These actions are the latest NCUA efforts to assist the corporate credit union network under the Corporate Stabilization Plan.

The two corporate credit unions were placed into conservatorship to protect retail credit union deposits and the interest of the National Credit Union Share Insurance Fund (NCUSIF), as well as to remove any impediments to the Agency’s ability to take appropriate mitigating actions that may be necessary. ...

Corporate credit unions do not serve consumers. They are chartered to provide products and services to the credit union system. These products and services will continue uninterrupted and there is no direct impact by NCUA’s actions on the 90 million credit union members nationwide. ...

U.S. Central has approximately $34 billion in assets and 26 retail corporate credit union members. WesCorp has $23 billion in assets and approximately 1,100 retail credit union members. The member accounts of both credit unions are guaranteed under provisions of the previously announced NCUA Share Guarantee Program, through December 31, 2010. The Program extends NCUSIF coverage to all funds held by the two corporate credit unions.
...
Additional mortgage and asset backed security analysis and assessment of the two credit unions by NCUA staff enabled NCUA to refine NCUSIF’s required reserve for potential loss. The findings indicated an overall estimated reserve level, previously announced by NCUA, had increased from $4.7 to $5.9 billion. The specific computation and the impact of the refined reserve level are addressed in NCUA Letter No: 09-CU-06, which NCUA issued and posted online today at http://www.ncua.gov/letters/letters.html.

NCUA is hosting a webcast Monday, March 23 at 2 p.m. to provide the credit union community with an update on the corporate credit union stabilization program.

Assets of $57 billion? There are some losses coming ...

by Calculated Risk on 3/20/2009 06:26:00 PM

From the FDIC: FDIC Approves the Payout of Insured Deposits of FirstCity Bank, Stockbridge, Georgia

The Federal Deposit Insurance Corporation (FDIC) approved the payout of the insured deposits of FirstCity Bank, Stockbridge, Georgia. The bank was closed today by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver.
...
As of March 18, 2009, FirstCity had total assets of $297 million and total deposits of $278 million. At the time of closing, the bank had approximately $778,000 in deposits that exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.
...
The FDIC estimates the cost of the failure to its Deposit Insurance Fund to be approximately $100 million. FirstCity Bank is the eighteenth FDIC-insured institution to fail this year. The last bank to fail in Georgia was Freedom Bank of Georgia, Commerce, on March 6, 2009.

It feels like Friday ...

by Calculated Risk on 3/20/2009 04:12:00 PM

While we wait for the FDIC, here is a look at the market.

The S&P 500 was off 2%

The Dow was off 1.65%

The NASDAQ was off 1.8%

Click on graph for larger image in new window.

This graph is from Doug Short of dshort.com (financial planner): "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

by Calculated Risk on 3/20/2009 03:33:00 PM

From Reuters: General Growth loses some malls after defaults

A Louisiana court issued an order to seize and sell a General Growth Properties Inc GGP.N shopping center in a New Orleans suburb after the No. 2 U.S. mall owner failed to repay a $95 million loan, a Citigroup ... unit said on Friday.

The Oakwood Shopping Center in the town of Gretna is the fourth General Growth property seized in the last few days after the company failed to pay mortgage debt.

A possible General Growth Properties bankruptcy could happen in the next few days.

by Calculated Risk on 3/20/2009 12:52:00 PM

From the LA Times: California unemployment hits 10.5% in February

California's unemployment rate rose for the 11th straight month in February, hitting 10.5% as a recession-wracked economy shed 116,000 jobs across all professions and industries, the state reported today.

The number is up from 10.1% in January and is the highest since April 1983.

The unemployment rate in California peaked at 11% in the early '80s.

Here is the EDD report. Construction employment is off 18.5% from Feb '08 to Feb '09. This is over 155,000 construction jobs lost in California alone over the last 12 months.

by Calculated Risk on 3/20/2009 11:30:00 AM

UPDATE: Here is the transcript of Bernanke's speech.

Federal Reserve Chairman Ben Bernanke will speak at Noon ET on "The Financial Crisis and Community Banking", at the Independent Community Bankers of America’s convention in Phoenix, AZ.

I expect CNBC to cover this ...

Here is the CNBC feed.

by Calculated Risk on 3/20/2009 11:12:00 AM

In addition to watching for bank failures this afternoon, the 2nd largest mall owner in the U.S. - General Growth Properties - is facing a significant deadline:

From the WSJ: General Growth Shakes Up Executive Ranks

[General Growth's] most critical deadline is 5 p.m. Friday, when it hopes the majority of its bondholders will have agreed to refrain from demanding payment this year on $2.25 billion in bonds. If that effort fails, General Growth says it might need to seek Chapter 11 bankruptcy protection.

Yesterday: Moody's Cuts General Growth To Last Pre-Default Level

Moody's Investors Service lowered its ratings on debt-laden mall owner General Growth Properties Inc. (GGP) and some of its subsidiaries to C, the last stop before default, after the company let a $395 million bond payment pass without a payment earlier this week.
...
On Wednesday, Standard and Poor's Ratings Services lowered its credit ratings on the company to default on the missed bond payment.

by Calculated Risk on 3/20/2009 09:03:00 AM

From HotelNewsNow.com: STR reports U.S. hotel data for week ending 14 March

The U.S. hotel industry posted declines in three key performance measurements during the week of 8-14 March 2009, according to data from STR..

In year-over-year measurements, the industry’s occupancy fell 15.7 percent to end the week at 55.2 percent. Average daily rate dropped 11.2 percent to finish the week at US$99.60. Revenue per available room for the week decreased 25.1 percent to finish at US$55.02.

Click on graph for larger image in new window.

This graph shows the YoY change in the occupancy rate (3 week centered average).

The three week average is off 14.4% from the same period in 2008.

Note that the average daily rate dropped significantly too, so RevPAR (Revenue per available room) is off 25.1% from last year.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 3/20/2009 01:45:00 AM

From the FDIC: FDIC Closes Sale of Indymac Federal Bank, Pasadena, California

The Federal Deposit Insurance Corporation (FDIC) has completed the sale of IndyMac Federal Bank FSB, Pasadena, California, to OneWest Bank, FSB, a newly formed Pasadena, California-based federal savings ...

IndyMac Federal sustained losses of $2.6 billion in the fourth quarter 2008 due to deterioration in the real estate market. The total estimated loss to the Deposit Insurance Fund is $10.7 billion.

The original loss estimate was $4 to $8 billion, and that estimate was later increased to $8.9 billion. Now it is $10.7 billion.

Ouch.

by Calculated Risk on 3/19/2009 09:11:00 PM

From the WSJ: Travel Spending Sinks Sharply

Spending on travel and tourism declined last year for the first time since the Sept. 11, 2001, terrorist attacks, the Commerce Department said Thursday, as Americans canceled vacations, a strong dollar kept foreigners away and businesses slashed travel budgets.

Spending fell at a 22% annualized rate in the October through December quarter, compared with the prior three-month period. The decline was the sharpest since the government's quarterly records began in 2001, topping the 19% drop after the terrorist attacks that year.

As a result, the trillion-dollar industry -- a major employer in the U.S. -- is reeling ...

More cliff diving ... and more bad news for the hotel industry.