by Calculated Risk on 4/02/2009 09:18:00 AM

From Bloomberg: FASB Eases Fair-Value Rules Amid Lawmaker Pressure (ht Mark)

... The changes approved today to fair-value, also known as mark-to-market, allow companies to use “significant” judgment in valuing assets to reduce writedowns on certain investments, including mortgage-backed securities. Accounting analysts say the measure, which can be applied to first-quarter results, may boost banks’ net income by 20 percent or more. FASB approved the changes during a meeting in Norwalk, Connecticut.

Update: From Housing Wire:

If you read the headlines (and most people don’t bother to go much farther beyond the headline than the lead paragraph –- to our collective disgrace), you already think FASB eased the rules for measuring fair value on Thursday. You might believe that it has at last caved in to pressure from banks and Congress, and decided to allow “preparers” and their auditors to use judgment when valuing illiquid assets.

Not so. They are reiterating for the third time that “fair value is the price that would be received to sell the asset in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date.”

And for the second time it is “highlighting and expanding on the relevant principles in FAS 157 that should be considered in estimating fair value when there has been a significant decrease in market activity for the asset.”

The first time, of course, was when they issued FAS 157. The second is the SEC/FASB staff clarifications on fair value accounting issued September 30, 2008. This is the third statement, second clarification and expansion.

by Calculated Risk on 4/02/2009 08:44:00 AM

"The decline in U.S. online recruitment activity during March was a sober follow-up to February’s seasonal rise, as uncertainty in the future economic situation continued to keep employers on the sidelines of the hiring field.”
Jesse Harriott, senior vice president, Monster Worldwide April 2, 2009

From Monster.com: Monster Employment Index Dips Slightly in March

The Monster Employment Index fell 4 points in March, and is now down 29% year-over-year, indicating a continued deceleration in online recruitment activity at the end of the first quarter.

Just another indicator showing substantial weakness in the job market.

The ADP report showed private employment decreased 742,000 from February to March 2009. The weekly initial unemployment claims report showed insured unemployment is at a record 5.73 million, and initial weekly claims at a cycle high of 669 thousand.

The BLS report for March will be released tomorrow. The consensus is for a decline of 650 thousand in payroll employment ... I'll take the under.

by Calculated Risk on 4/02/2009 08:30:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending March 28, the advance figure for seasonally adjusted initial claims was 669,000, an increase of 12,000 from the previous week's revised figure of 657,000. The 4-week moving average was 656,750, an increase of 6,500 from the previous week's revised average of 650,250.
...
The advance number for seasonally adjusted insured unemployment during the week ending March 21 was 5,728,000, an increase of 161,000 from the preceding week's revised level of 5,567,000.

Click on graph for larger image in new window.

This graph shows weekly claims and continued claims since 1971.

The four week moving average is at 656,750. The record was 674,250 in 1982, although that was much higher as a percent of covered employment (covered employment was 87.6 million in 1982 compared to 133.9 million today).

Continued claims are now at 5.73 million - the all time record.

Note: I'll add the normalized graph next week. This is another very weak report and shows continued weakness for employment.

by Calculated Risk on 4/02/2009 12:40:00 AM

From Peter Hong at the LA Times: The Hunter S. Thompson of real estate

Real estate salesman Jim Klinge ... has become a notorious Internet chronicler of the real estate crash in north San Diego County, where he has lived and worked for decades.

Rather than downplay the greed and excess that caused the region's travails, he revels in exposing them.

He surveys the wreckage with a pocket video camera, shooting footage of vacant, once-pricey houses turned into eyesores, voiced over with his deadpan narration. Then he posts them on his website, at www.bubbleinfo.com.

They're shaky, noisy clips full of coarse images and language.

Here is one of my favorites - Jim the Realtor showcases an investment opportunity in San Diego - enjoy!


More from the LA Times:

In one clip, the camera pans across the kitchen of a million-dollar fixer near Interstate 5. He pointedly notes the house's proximity to the freeway, which he calls the "De-troit river." There's mold under the sink and a foot-sized hole in the drywall just above the floor.

"December 2006 this house sold for a million dollars," he says. "Nineteen hundred square feet, built in '78, right across the freeway. One million."
...
His wife, Donna, who helps manage the family brokerage, was nervous. "He was really pushing the envelope with the blog, taking people on, naming names," she said. "I took deep breaths. I didn't know how it would turn out."

She said she was shocked one day to see a photo on the blog of two young men sitting on the floor of a house with their wrists bound like prisoners. They had been squatting in a foreclosed house Jim was selling, and he had sneaked up on them as they slept and tied them up with plastic zip ties in a brazen citizen’s arrest.

I really enjoy Jim's videos ... Here is a compilation video Jim posted today:

by Calculated Risk on 4/01/2009 10:59:00 PM

From NPR (with Chicago Public Radio: This American Life), here is a story about the FDIC takeover of Bank of Clark County: Anatomy Of A Bank Takeover (ht Ted)

Here is the audio from NPR.

Here is the FDIC announcement from January: Umpqua Bank Acquires the Insured Deposits of Bank of Clark County, Vancouver, WA

At least they get free ice cream! Click on photo for larger image in new window. Photo Credit: Otishertz, January 2009