RSS Feed by Calculated Risk on 10/22/2011 06:42:00 PM
Saturday, October 22, 2011
Unofficial Problem Bank list declines to 976 Institutions
Note: this is an unofficial list of Problem Banks compiled only from public sources.
Here is the unofficial problem bank list for Oct 21, 2011. (table is sortable by assets, state, etc.)
Changes and comments from surferdude808:
With four removals and one addition, the Unofficial Problem Bank List finished the week at 976 institutions with assets of $401.9 billion. For comparative purposes, the list had 871 institutions with assets of $402.2 billion last year.Earlier:
Failure was the cause for the four removals that include Community Banks of Colorado, Greenwood Village, CO ($1.4 billion); Old Harbor Bank, Clearwater, FL ($216 million Ticker: OHBK); Decatur First Bank, Decatur, GA ($192 million); and Community Capital Bank, Jonesboro, GA ($181 million).
The two failures in Georgia push that state's total to 73 at a cost of $9.3 billion since the on-set of the crisis in 2008. In all, the FDIC's Atlanta Region has seen 154 failures at a cost of $27.7 billion. Perhaps these figures would be lower if the supervision team in that region had taken seriously the many warnings it received long before the on-set of the crisis on the riskiness of the C&D lending exposures. As an aside, it is interesting how many of the involved principals still hold high level positions at the FDIC or have gone on to lucrative consulting jobs. As the OWS movement wants Wall Street executives held accountable for the economic dislocations they caused, how about a movement to hold the regulatory agency executives accountable for their failings that contributed to those dislocations.
The addition this week is Town Center Bank, Frankfort, IL ($130 million). Again, we applaud the disclosure of this action by the Illinois State Banking Department, which is the most transparent department among all of the states.
The OCC used to release its monthly enforcement action activity on the Friday subsequent to the 15th day of the month. However, the OCC has not released on that schedule the past two months. We guess the OCC will release some information next week.
• Schedule for Week of Oct 23rd
• Summary for Week ending Oct 21st
Schedule for Week of Oct 23rd
by Calculated Risk on 10/22/2011 02:15:00 PM
Earlier:
• Summary for Week ending Oct 21st
This is a key week for Europe, starting with the European leaders summit meeting on Sunday.
The key U.S. economic report for the coming week is the Q3 advance GDP report to be released on Thursday. There are also two important housing reports to be released early in the week: Case-Shiller house prices on Tuesday and New Home sales on Wednesday.
Several high frequency releases will be closely watched: weekly initial unemployment claims, consumer sentiment (final) and two more regional Fed manufacturing surveys.
European Union leaders will hold a summit meeting.
8:30 AM ET: Chicago Fed National Activity Index (September). This is a composite index of other data.
8:45 AM: New York Fed President William Dudley speaks on "Regional and National Economic Outlook" at Fordham University Gabelli School of Business. Following the recent speeches by Fed Vice Chairman Janet Yellen and Fed Governor Daniel Tarullo, discussing the possibility of more Fed MBS purchases, this speech by Dudley will be closely watched.
Expected: The Moody's/REAL Commercial Property Price Index (commercial real estate price index) for August.
9:00 AM: S&P/Case-Shiller House Price Index for August. Although this is the August report, it is really a 3 month average of June, July and August. This graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).
The consensus is for prices to increase 0.2% in August. The CoreLogic index showed a 0.8% decrease in August (NSA). Based on the other price indexes, the Case-Shiller index could show a decrease in August.
10:00 AM: Conference Board's consumer confidence index for October. The consensus is for an increase to 46.0 from 45.4 last month.
10:00 AM: Richmond Fed Survey of Manufacturing Activity for October. The consensus is for the index to be at -1, up from -6 in September (below zero is contraction).
10:00 AM: FHFA House Price Index for August 2011. This is based on GSE repeat sales and is no longer as closely followed as Case-Shiller (or CoreLogic).
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. This index has been especially weak since early August, although this doesn't include cash buyers.
8:30 AM: Durable Goods Orders for September from the Census Bureau. The consensus is for a 0.9% decrease in durable goods orders after decreasing 0.1% in August.
10:00 AM: New Home Sales for September from the Census Bureau. This graph shows New Home Sales since 1963. The dashed line is the current sales rate.
The consensus is for a slight increase in sales to 300 thousand Seasonally Adjusted Annual Rate (SAAR) in September from 295 thousand in August.
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for a slight increase to 405,000 from 403,000 last week. The 4-week average is still above 400,000, however the average has declined recently to the lowest level since early April.
8:30 AM: Q2 GDP (advance release). This is the advance release from the BEA. The consensus is that real GDP increased 2.5% annualized in Q3.This graph shows the quarterly GDP growth (at an annual rate) for the last 30 years.
The blue column is the forecast for Q3 GDP.
10:00 AM: Pending Home Sales Index for September. The consensus is for a 0.1% increase in the index.
11:00 AM: Kansas City Fed regional Manufacturing Survey for October. The consensus is for an increase to 8 in October from 6 in September (slight expansion).
8:30 AM: Personal Income and Outlays for September. The following graph shows real Personal Consumption Expenditures (PCE) through June (2005 dollars). PCE increased 0.2 in August, and real PCE decreased slightly as the price index for PCE increased 0.2 percent in August.
The consensus is for a 0.3% increase in personal income in August, and a 0.6% increase in personal spending, and for the Core PCE price index to increase 0.2%.
9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for October). The consensus is for a slight increase to 58.0 from the preliminary reading of 57.5.
Summary for Week ending Oct 21st
by Calculated Risk on 10/22/2011 08:11:00 AM
The European financial crisis is front page news every day now. The next installment of Greek aid has been approved by the EU finance ministers, and there is a summit meeting on Sunday of EU leaders. Although there will be announcements on Sunday, there will also be a 2nd summit meeting later in the week to approve the details. More to come tomorrow!
In the U.S. there has been more discussion of further Fed action. As an example, see Fed Is Poised for More Easing and Fed Official Hints at Possible Effort to Boost Economy. There will be another key speech on Monday by NY Fed president William Dudley.
The U.S. economic data was generally better than the very low expectations. The NY Fed manufacturing survey was weak, but the Philly Fed survey was better than expected and showed expansion in October. The 4-week average of initial weekly unemployment claims fell to the lowest level since early April.
Housing starts increased in September, mostly due to an increase in multi-family starts. And the remodeling index showed a strong increase.
It now appears Q3 GDP will be around 2.5%, still weak – but better than expected just a few weeks ago.
Here is a summary in graphs:
• Housing Starts increased in September
Total housing starts were at 658 thousand (SAAR) in September, up 15.0% from the revised August rate of 572 thousand. Most of the increase was for multi-family starts.
Single-family starts increased 1.7% to 425 thousand in September.
Multi-family starts are increasing in 2011 - although from a very low level. This was well above expectations of 590 thousand starts in September.
Single family starts are still "moving sideways".
• Existing Home Sales in September: 4.91 million SAAR, 8.5 months of supply
This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.
Sales in September 2011 (4.91 million SAAR) were 3.0% lower than last month, and were 11.3% above the September 2010 rate.
According to the NAR, inventory decreased to 3.48 million in September from 3.55 million in August.
The next graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, so it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.
Inventory decreased 13.0% year-over-year in September from September 2010. This is the eight consecutive month with a YoY decrease in inventory. Months of supply increased to 8.5 months in September, up from 8.4 months in August.
The following graph shows existing home sales Not Seasonally Adjusted (NSA). The red columns are for 2011.
Sales NSA are above last September - of course sales declined sharply last year following the expiration of the tax credit in June 2010. The level of sales is still elevated due to investor buying. The NAR noted: "All-cash sales accounted for 30 percent of purchase activity in September, up from 29 percent in August and 29 percent also in September 2010; investors make up the bulk of cash purchases."
• Industrial Production increased 0.2% in September, Capacity Utilization increased slightly
From the Fed: Industrial production and Capacity Utilization "Industrial production increased 0.2 percent in September after having been unchanged in August. ... Capacity utilization for total industry edged up to 77.4 percent ..."
This graph shows Capacity Utilization. This series is up 10.1 percentage points from the record low set in June 2009 (the series starts in 1967).
Capacity utilization at 77.4% is still 3.0 percentage points below its average from 1972 to 2010 and below the pre-recession levels of 81.3% in December 2007.
This graph shows industrial production since 1967.
Industrial production increased in September to 94.2. July was revised up, so there was no increase in August.
After the fairly rapid increase last year, increases in industrial production and capacity utilization have slowed recently.
The consensus was for a 0.2% increase in Industrial Production in September, and an increase to 77.5% for Capacity Utilization.
• AIA: Architecture Billings Index declined in September
Note: This index is a leading indicator for new Commercial Real Estate (CRE) investment.
From AIA: Another Drop for Architecture Billings Index
"The American Institute of Architects (AIA) reported the September ABI score was 46.9, following a score of 51.4 in August."
This graph shows the Architecture Billings Index since 1996. Anything below 50 indicates contraction in demand for architects' services.
Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. So the recent contraction suggests further declines in CRE investment in 2012.
• Rate of increase slows for Key Measures of Inflation in September
The Cleveland Fed released the median CPI and the trimmed-mean CPI: "According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.3% annualized rate) in September. The 16% trimmed-mean Consumer Price Index increased 0.2% (2.5% annualized rate) during the month.
Over the last 12 months, the median CPI rose 2.1%, the trimmed-mean CPI rose 2.5%, the CPI rose 3.9%, and the CPI less food and energy rose 2.0%"
On a year-over-year basis, these measures of inflation are increasing, and are around the Fed's target.
On a monthly basis, the median Consumer Price Index increased 2.3% at an annualized rate, the 16% trimmed-mean Consumer Price Index increased 2.5% annualized in July, and core CPI increased 0.7% annualized.
These key price measures increased at a lower rate than in August.
• Empire State and Philly Fed Manufacturing Surveys
The Fed surveys were mixed.
From the NY Fed: Empire State Manufacturing Survey "The Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to deteriorate in October. The general business conditions index remained negative and, at -8.5, was little changed."
From the Philly Fed: October 2011 Business Outlook Survey "The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from ‐17.5 in September to 8.7, the first positive reading in three months."
The graph above compares the regional Fed surveys and the ISM manufacturing index. The dashed green line is an average of the NY Fed (Empire State) and Philly Fed surveys through October. The ISM and total Fed surveys are through September.
The average of the Empire State and Philly Fed surveys rebounded in October, and is now slightly positive.
• Weekly Initial Unemployment Claims: 4-Week average lowest since April
The following graph shows the 4-week moving average of weekly claims since January 2000 (there is a longer term graph in graph gallery).
The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined this week to 403,000.
This is the lowest level for the 4-week average of weekly claims since April, and this was slightly above the consensus forecast. This is still elevated, and still above the post-recession lows of earlier this year.
• Other Economic Stories ...
• Residential Remodeling Index at new high in August
• NAHB Builder Confidence index increases in October
• From Fed Chairman Ben Bernanke: Effects of the Great Recession on Central Bank Doctrine and Practice
• 2012 Social Security Cost-Of-Living Adjustment approximately 3.6% increase
• LA Port Traffic in September: Exports increase year-over-year, Imports Down
• State Unemployment Rates "little changed" in September
Friday, October 21, 2011
Report: Analysts not optimistic about new FHFA Refinance Plan
by Calculated Risk on 10/21/2011 09:36:00 PM
From Bloomberg: U.S. Mortgage Fixes Won’t ‘Shock and Awe’ Economy, Analysts Say
A federal plan to help homeowners refinance their mortgages is expected to reach fewer than 1 million borrowers, too few to give a jolt to the struggling U.S. economy, lawmakers and analysts say.I can't comment because I haven't seen the plan yet. But just raising the LTV above 125% probably will not have much impact. And giving the lenders a waiver probably will not fly. This should be announced next week.
...
While details of the program’s improvements remain under wraps, [Edward J. DeMarco, acting director of FHFA] told lawmakers this month that he was considering expanding HARP to borrowers who are more than 25 percent underwater.
...
“Originators are afraid of these loans,” [Bose George, an analyst with Keefe, Bruyette & Woods Inc.] said. “It’s almost by definition a high-risk loan.” They fear refinancing higher-risk borrowers could trigger scrutiny from the government-sponsored enterprises, which are free to revoke guarantees if a loan sours or flaws are discovered.
A waiver from such potential violations would be needed to get lenders on board, George said. ... “There is a political risk to just waiving them. It could be seen as a gift to the banks,” he said.
Bank Failure #84: Community Banks of Colorado, Greenwood Village, CO
by Calculated Risk on 10/21/2011 08:11:00 PM
Ghost profits spun from thin air
Now a prairie dog.
by Soylent Green is People
From the FDIC: Bank Midwest, National Association, Kansas City, Missouri, Assumes All of the Deposits of Community Banks of Colorado, Greenwood, Colorado
As of June 30, 2011, Community Banks of Colorado had approximately $1.38 billion in total assets and $1.33 billion in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $224.9 million. ... Community Banks of Colorado is the 84th FDIC-insured institution to fail in the nation this year, and the sixth in Colorado.That makes four today.
Bank Failures #81 - 83: Georgia and Florida
by Calculated Risk on 10/21/2011 05:12:00 PM
Georgian zombie banks spawning
Our ammo runs low
by Soylent Green is People
From the FDIC: 1st United Bank, Boca Raton, Florida, Assumes All of the Deposits of Old Harbor Bank, Clearwater, Florida
As of June 30, 2011, Old Harbor Bank had approximately $215.9 million in total assets and $217.8 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $39.3 million. ... Old Harbor Bank is the 81st FDIC-insured institution to fail in the nation this year, and the twelfth in Florida.From the FDIC: Fidelity Bank, Atlanta, Georgia, Assumes All of the Deposits of Decatur First Bank, Decatur, Georgia
As of June 30, 2011, Decatur First Bank had approximately $191.5 million in total assets and $179.2 million in total deposits ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $32.6 million. ... Decatur First Bank is the 82nd FDIC-insured institution to fail in the nation this year, and the twenty-first in Georgia.From the FDIC: State Bank and Trust Company, Macon, Georgia, Assumes All of the Deposits of Community Capital Bank, Jonesboro, Georgia
As of June 30, 2011, Community Capital Bank had approximately $181.2 million in total assets and $166.2 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $62.0 million. ... Community Capital Bank is the 83rd FDIC-insured institution to fail in the nation this year, and the twenty-second in Georgia.Three more today - so far - and 22 in Georga this year!
Financial Times: Possible 60% haircuts for Greek debt
by Calculated Risk on 10/21/2011 04:00:00 PM
From the Financial Times: EU looks at 60% haircuts for Greek debt.
The Financial Times reports on a "strictly confidential" report. According to the Financial Times the report notes that the Greek situation has deteriorated significantly since July, and to bring the next bail-out back to the level of the July agreement would probably require "bondholders ... to take a 60 per cent loss on their current holding". That will change the amount need to recapitalize the European banks!
The Greek 2 year yield is up to 77.3%. The Greek 1 year yield is at 183%. (corrected typo)
The Portuguese 2 year yield is up to 17.9% and the Irish 2 year yield is up to 8.6%.
The Spanish 10 year yield is at 5.5% and the Italian 10 year yield is at 5.9%. Both have been moving up recently.
Misc: Solid Auto Sales seen in October, Merrill Lynch ups GDP Forecast
by Calculated Risk on 10/21/2011 01:50:00 PM
From the LA Times: October auto sales expected to rise
Auto research company J.D. Power and Associates estimates an annual industry sales pace of 13.1 million vehicles for the month, about the same as September and a big jump from earlier in the year.Auto sales in Q3 were up about 3% over Q2. Even though this estimate for October is about the same as September, sales in Q4 would be up about 5% over Q3 even if sales were flat all quarter (because July and August were weak). This will give a boost to Q4 GDP.
And from Merrill Lynch this morning:
Our tracking model of third quarter GDP has been running well ahead of our former official estimate of 1.8% growth. Today, in our US economic weekly, we officially revise up our Q3 forecast to 2.7%. We expect some of this strong momentum to carry over into the fourth quarter. We bumped up our Q4 estimate to 2.3% from 2.0%.I'm including this because most of the revisions have been down in recent quarters. But it is important to remember this is still sluggish growth.
Dean Baker writes: Is the Double Dip Drifting Away?
The economy looks to be growing in a range of 2-3 percent. This is roughly fast enough to keep even with the growth of the labor force. That implies that we are making zero progress in putting people back to work.Dr. Baker makes some key points: Sluggish growth isn't good, beating "incredibly low expectations" isn't great, and employment is just keeping "even with the growth of the labor force". And we need to remember there are still significant downside risks.
Unfortunately ... this slow growth is likely to be seen as good. It isn't ...
State Unemployment Rates "little changed" in September
by Calculated Risk on 10/21/2011 10:19:00 AM
From the BLS: Regional and State Employment and Unemployment Summary
Regional and state unemployment rates were generally little changed in September. Twenty-five states recorded unemployment rate decreases, 14 states posted rate increases, and 11 states and the District of Columbia had no rate change, the U.S. Bureau of Labor Statistics reported today. Thirty-eight states registered unemployment rate decreases from a year earlier, 10 states and the District of Columbia had increases, and 2 states experienced no change.The following graph shows the current unemployment rate for each state (red), and the max during the recession (blue). If there is no blue, the state is currently at the maximum during the recession.
...
Nevada continued to report the highest unemployment rate among the states, 13.4 percent in September. California posted the next highest rate, 11.9 percent. North Dakota registered the lowest jobless rate, 3.5 percent, followed by Nebraska, 4.2 percent.
Click on graph for larger image in graph gallery.The states are ranked by the highest current unemployment rate.
Two states and D.C. are at 2007 recession highs: Arkansas (8.3%), D.C. (11.1%), and Texas (8.5%).
From the BLS: "Forty-six states recorded unemployment rates that were not appreciably different from those of a year earlier."
The fact that 46 states have seen little or no improvement over the last year is a reminder that the unemployment crisis is ongoing.
Europe: Finance Ministers expected to approve aid for Greece, Most Major Decisions Delayed
by Calculated Risk on 10/21/2011 08:58:00 AM
Via the Financial Times Eurozone crisis: live blog from Peter Spiegel in Brussels:
Jean-Claude Juncker, the Luxembourg prime minister who chairs today’s meeting of eurozone finance ministers, has entered the gathering and was characteristically blunt on his way in.There will still be news on Sunday, but the important news will probably be later in the week - or delayed even more.
He said he believed that the ministers will sign off on the €8bn aid tranche for Greece – “at least I hope it will happen this way” – but warned that because of the decision to hold a second summit, most every other major decision may have to be delayed.
