by Calculated Risk on 11/21/2009 09:02:00 AM

From Tim Duy: The Fed in a Corner

Over the years, I have warned a seemingly countless number of undergraduates that Fed's hold on monetary independence was tenuous at best. Independence is not guaranteed by the Constitution. Congress made the Fed, and Congress can unmake the Fed. The Fed could only maintain the privilege of independence if policymakers pursued policy paths that fostered maximum, sustainable growth. Deviating from such paths would have consequences.

The Fed is quickly learning the extent of those consequences, as Congress launches an assault on the Fed's independence.
...
The Fed earns accolades from academics for its handling of the crisis, in particular since the Lehman failure. Fair enough; I have few quibbles with policy since last fall. But what about the years before Lehman, when the crisis was building? Where was the Fed then? Did they abdicate regulatory responsibility? How did banks develop such incredible exposure to off-balance sheet SIV's? How could the Fed ignore increasingly predatory lending in the mortgage market? What exactly was Timothy Geithner, then president of the all important New York Fed, regulating and supervising? Clearly not Citibank.

There is much more in the piece.

Clearly the Fed (and other regulators) failed to properly supervise financial firms. We need to understand how and why this happened. (See The Failure of Regulatory Oversight)

by Calculated Risk on 11/21/2009 12:30:00 AM

Jim is featuring a few trustee sale opportunities recently ... the total loan on this one is about $650,000 and the opening bid is $331,500 for a 2100 sq ft house on over 4 acres in a remote area of San Diego:

by Calculated Risk on 11/20/2009 09:03:00 PM

This is an unofficial list of Problem Banks compiled only from public sources.

Changes and comments from surferdude808:

The Unofficial Problem Bank List increased by a net six institutions to 513 while aggregate assets declined to $302.3 billion from $304 billion.

There were 12 institutions added to the list with an average asset size of $194 million. The largest among the new faces include Modern Bank, National Association, New York, NY ($601 million); Eagle National Bank, Upper Darby, PA ($284 million), and The First National Bank of Wynne, Wynne, AR ($275 million). The OCC issued a Prompt Corrective Action order on September 30, 2009 to Marshall Bank, National Association, Hallock, MN ($60 million).

Six institutions were removed this week with half being failures last Friday including Orion Bank ($2.6 billion) and Century Bank, a Federal Savings Bank ($756 million). Three other banks were removed when their enforcement action was terminated including The First National Bank of Manchester and The Morris County National Bank of Naples. The only other change to the list this week is the OCC’s change in action against First National Bank in Pawhuska ($37 million) from a Formal Agreement to a Cease & Desist Order on October 22, 2009.

The list is compiled from regulator press releases or from public news sources (see Enforcement Action Type link for source). The FDIC data is released monthly with a delay, and the Fed and OTC data is more timely. The OCC data is a little lagged. Credit: surferdude808.

See description below table for Class and Cert (and a link to FDIC ID system).

For a full screen version of the table click here.

The table is wide - use scroll bars to see all information!

NOTE: Columns are sortable - click on column header (Assets, State, Bank Name, Date, etc.)





Class: from FDIC

The FDIC assigns classification codes indicating an institution's charter type (commercial bank, savings bank, or savings association), its chartering agent (state or federal government), its Federal Reserve membership status (member or nonmember), and its primary federal regulator (state-chartered institutions are subject to both federal and state supervision). These codes are:

N National chartered commercial bank supervised by the Office of the Comptroller of the Currency

SM State charter Fed member commercial bank supervised by the Federal Reserve

NM State charter Fed nonmember commercial bank supervised by the FDIC

SA State or federal charter savings association supervised by the Office of Thrift Supervision

SB State charter savings bank supervised by the FDIC

Cert: This is the certificate number assigned by the FDIC used to identify institutions and for the issuance of insurance certificates. Click on the number and the Institution Directory (ID) system "will provide the last demographic and financial data filed by the selected institution".

by Calculated Risk on 11/20/2009 05:04:00 PM

Turkey on table
Carved up by the Central Bank
MMMM Commerce Bank, Yum!
by Soylent Green is People
From the FDIC: Central Bank, Stillwater, Minnesota, Assumes All of the Deposits of Commerce Bank of Southwest Florida, Fort Myers, Florida

Commerce Bank of Southwest Florida, Fort Myers, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of August 28, 2009, Commerce Bank of Southwest Florida had total assets of $79.7 million and total deposits of approximately $76.7 million. ...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $23.6 million. .... Commerce Bank of Southwest Florida is the 124th FDIC-insured institution to fail in the nation this year, and the twelfth in Florida. The last FDIC-insured institution closed in the state was Orion Bank, Naples, on November 13, 2009.

Off to a quick start ...

by Calculated Risk on 11/20/2009 02:47:00 PM

From Globe St.: Values Off 43% From 2007 Peak

Prices nationwide have fallen 42.9% from their October 2007 peak, according to the latest Moody’s/REAL Commercial Property Price Index report issued Thursday, while Real Capital Analytics says total transaction volume for 2009 will be the lowest of the decade. The November Moody’s/REAL report ... covers transactions through Sept. 30 ... September’s index represented a 3.9% value decline compared to August.
...
"Further price declines are almost certain over the short term," says Nick Levidy, Moody’s managing director, in a statement. "However, it is notable that the pace of deterioration appears to be moderating."

Here is a comparison of the Moodys/REAL Commercial Property Price Index (CPPI) and the Case-Shiller composite 20 index.

Notes: Beware of the "Real" in the title - this index is not inflation adjusted. Moody's CRE price index is a repeat sales index like Case-Shiller - but there are far fewer commercial sales - and that can impact prices.

Click on graph for larger image in new window.

CRE prices only go back to December 2000.

The Case-Shiller Composite 20 residential index is in blue (with Dec 2000 set to 1.0 to line up the indexes).

This shows residential leading CRE (although we usually talk about residential investment leading CRE investment, but in this case also for prices), and this also shows that prices tend to fall faster for CRE than for residential.