by Calculated Risk on 10/26/2009 01:01:00 PM

Update: The Reid/Baucus proposal is to extend the tax credit and phase it out over 2010. The credit would be $8,000 through the end of Q1 2010, and decline $2,000 per quarter after that ... ($6,000 in Q2, $4,000 in Q3, $2,000 in Q4 2010)

From Bloomberg: Housing Tax Credit Probably Won’t Be Extended in U.S., ISI Says

“There could be an agreement reached as early today on the Reid/Baucus amendment that would PHASE OUT (not extend, as we originally understood when the idea was first proposed last week) the home buyer tax credit,” ISI analysts said in the note.

We should know more soon. Most economists oppose an extension of the tax credit because it is poorly targeted, very expensive per additional home sold, there was little job creation, fraud was widespread, and there are many serious unintended consequences.

by Calculated Risk on 10/26/2009 11:28:00 AM

From the American Trucking Association: ATA Truck Tonnage Index Slipped 0.3 Percent in September

Click on graph for slightly larger image in new window.

The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index decreased 0.3 percent in September, after increasing 2.1 percent in both July and August. The latest decline lowered the SA index to 103.9 (2000=100). ...

Compared with September 2008, SA tonnage fell 7.3 percent, which was the best year-over-year showing since November 2008. In August, the index was down 7.5 percent from a year earlier.

ATA Chief Economist Bob Costello said that the latest reading fits with the premise that the recovery will be moderate and choppy. “The trucking industry should not be alarmed by the very small decrease in September,” Costello noted. “We took two steps forward in July and August and this was a miniscule step backward.” He added that the industry should be prepared for ups and downs in the months ahead, but the general trend should be modest improvement. ...

Trucking serves as a barometer of the U.S. economy, representing nearly 69 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.2 billion tons of freight in 2008. Motor carriers collected $660.3 billion, or 83.1 percent of total revenue earned by all transport modes.

Trucking has benefited from some inventory restocking, and exports - two key positive areas for the economy, however further growth will probably be "modest" and "choppy" until there is a pickup in domestic end demand.

by Calculated Risk on 10/26/2009 08:50:00 AM

From the Chicago Fed: Index shows economic activity approaching pre-recessionary levels

The Chicago Fed National Activity Index was –0.81 in September, down from –0.65 in August. Three of the four broad categories of indicators made negative contributions to the index in September, but the production and income category made a positive contribution for the third consecutive month.

Click on table for larger image in new window.

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. According to the Chicago Fed:

"At –0.63 in September (up from –0.96 in the previous month), the index’s three-month moving average, CFNAI-MA3, suggests that growth in national economic activity was below its historical trend. However, the CFNAI-MA3 in September improved to a level greater than –0.7 for the first time since the early months of this recession. For the four previous recessions, the first month when the CFNAI-MA3 was above –0.7 coincided closely with the end of each recession as eventually determined by the National Bureau of Economic Research."

This index suggests that the official recession might be over. However the index is still fairly weak.

by Calculated Risk on 10/26/2009 08:37:00 AM

Two articles from the NY Times Dealbook:

ING to Split in Two Amid $11.3 Billion Rights Issue

ING Group, the Dutch financial services company, said Monday that it planned to break up its insurance and banking businesses and raise up to 7.5 billion euros, or $11.3 billion, in a stock issue, after reaching a deal with the government to repay ahead of schedule half the money it received in a bailout last year, The New York Times’s Chris V. Nicholson reported.

ING was propped up with 10 billion euros in emergency funds from the Dutch government in October 2008, which helped cushion the company’s core Tier One capital, a measure of financial strength, during the global financial crisis.

Lloyds Said Set to Raise $38 Billion

Lloyds Banking Group plans to will announce within days a 23 billion pound ($38 billion) fundraising plan to shore up its balance sheet and avoid a U.K. government debt insurance program, The Times of London reported.
...
The fundraising comes as Lloyds seeks to escape taking part a costly government insurance scheme, that would give the British government a controlling 60 percent stake in the bank ...

Some pretty amazing numbers ... obviously some banks think now is the time to raise capital.

by Calculated Risk on 10/25/2009 07:39:00 PM

No surprise ...

Press Release: Capmark Financial Group Inc. Seeks To Restructure Balance Sheet Through Chapter 11 Reorganization Process

Capmark Financial Group Inc. ("Capmark") today announced that Capmark and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Capmark intends to use the reorganization process to implement a restructuring that reduces its corporate debt and maximizes value for its stakeholders. Capmark`s businesses are continuing to operate in the ordinary course.

Capmark Bank, which recently received $600 million of new equity from Capmark, is not part of the filing.

More from Bloomberg: Lender Capmark Financial Group Files for Bankruptcy