by Calculated Risk on 8/25/2009 08:33:00 AM

From Bloomberg: Court Orders Federal Reserve to Disclose Emergency Loan Details

The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.
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The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders.
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The judge said the central bank “improperly withheld agency records” ... She gave the Fed five days to turn over documents it told the reporters it located ...

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).

There is going to be some interesting information available soon.

by Calculated Risk on 8/25/2009 12:43:00 AM

Some people knew this was coming ...

From Reuters: Deutsche Bank plans Tier 1 issue, reopens market

Deutsche Bank AG plans to raise new Tier 1 debt ... as banks seek to rebuild balance sheets in the wake of the financial crisis.

The German bank confirmed it planned to issue euro fixed-rate perpetual notes, with annual call dates beginning from March 2015, and said it was managing the issue. ... the first of an expected series of new Tier 1 notes to hit the market in coming months from banks ... The deal would be smaller than 1 billion euros as the bank was seeking to test the market's appetite ...

And SunTrust hints at raising new capital, from Bloomberg: U.S. Banks Face More Loan Losses, SunTrust Chief Says

“The industry is a long way from declaring any sort of victory, especially regarding credit issues,” Chief Executive Officer James Wells III said today in a speech to the Rotary Club of Atlanta. “This credit cycle has yet to play itself out. We do not expect things to improve for the banking industry in the very near future.”
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“The industry has moved from a potentially cataclysmic scenario to one that is merely very difficult,” Wells said. “The industry is back from the brink of a potential global financial-system meltdown.” ... “Even if the economy begins to improve modestly, commercial real estate conditions will probably deteriorate until 2010.”
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Wells said SunTrust may repurchase $4.9 billion in preferred shares sold through the U.S. Troubled Asset Relief Program “as soon as possible,” without being more specific.

Ahhh ... just prudent balance sheet management!

by Calculated Risk on 8/24/2009 10:13:00 PM

From CNBC: Obama to Reappoint Bernanke as Fed Chief

U.S. President Barack Obama will reappoint Ben Bernanke for a second term as chairman of the Federal Reserve on Tuesday, a senior administration official said on Monday.
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"The man next to me, Ben Bernanke, has led the Fed through one of the worst financial crises that this nation and this world have ever faced," Obama will say in a statement to the media at 9 am New York time.

As Fed Governor Bernanke supported the flawed policies of Alan Greenspan - he never recognized the housing bubble or the lack of oversight - and there is no question, as Fed Chairman, Bernanke was slow to understand the credit and housing problems. And I'd prefer someone with better forecasting skills.

However once Bernanke started to understand the problem, he was very effective at providing liquidity for the markets. The financial system faced both a liquidity and a solvency crisis, and it is the Fed's role to provide appropriate liquidity. Bernanke met that challenge, and I think he is a solid choice for a 2nd term (not my first choice, but solid).

by Calculated Risk on 8/24/2009 08:06:00 PM

From the SF Gate: Hotel losses mount, hurting city's coffers (ht Michael)

In June, the average room rate in San Francisco was $134, the lowest it has been since 2005 and well below the $162 peak in June 2008 ... For a while, managers filled rooms by offering lower rates, but the number of visitors also has begun to slide, and in June, occupancy tumbled to 73 percent, down from 85 percent the same time last year.

A 17% decline in room rates, and a 14% decline in occupancy rates, suggests about a 30% decline in RevPAR (Revenue Per Available Room).

Add to the troubled mix the fact that many hotel owners, in San Francisco and across the state, financed purchases or refinanced loans between 2005 and 2007 - when the hotel values were at their peak. Since then, hotels statewide have lost 50 to 80 percent of their value, meaning that many owners owe far more than their asset is worth.

Hospitality industry analyst Alan Reay calls the situation a "perfect storm" that won't improve any time soon ...

Actually this is a perfect storm everywhere for hotels. Too much supply - and more coming online every day. Too much debt. And too few guests.

by Calculated Risk on 8/24/2009 05:49:00 PM

Check out the updates to the NY Fed Credit Conditions map.

A very cool tool from the NY Fed: New York Fed Launches Expanded U.S. Credit Conditions Section of Website (ht Bob, Justin)

The Federal Reserve Bank of New York today launched an expanded section of its website, adding new regional information on consumer credit conditions intended to assist policymakers address mortgage delinquency and foreclosure issues.

The U.S. Credit Conditions section offers new interactive maps and data on auto and student loan delinquencies, and mortgage “roll” rates. These features complement existing maps and spreadsheets on mortgage foreclosures and delinquencies, measures of subprime and alt-A mortgages and bank credit card delinquencies. The data are available at the state and county level.