by Calculated Risk on 4/30/2010 06:23:00 PM

Michigan's distress
Autos and banks only hope
Federal bailouts.
by Soylent Green is People
From the FDIC: First Michigan Bank, Troy, Michgan, Assumes All of the Deposits of CF Bancorp, Port Huron, Michigan

CF Bancorp, Port Huron, Michigan, was closed today by the Michigan Office of Financial and Insurance Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...


As of December 31, 2009, CF Bancorp had approximately $1.65 billion in total assets and $1.43 billion in total deposits....

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $615.3 million. ... CF Bancorp is the 61st FDIC-insured institution to fail in the nation this year, and the second in Michigan. The last FDIC-insured institution closed in the state was Lakeside Community Bank, Sterling Heights, on April 16, 2010.

That makes four today ... "only" $615 million cost ...

by Calculated Risk on 4/30/2010 04:44:00 PM

Banco Colapso
Los prestamos dudosos
Peo gestion
by Soylent Green is People
From the FDIC: Oriental Bank and Trust, San Juan, Puerto Rico, Assumes All of the Deposits of Eurobank, San Juan, Puerto Rico

Eurobank, San Juan, Puerto Rico, was closed today by the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of December 31, 2009, Eurobank had approximately $2.56 billion in total assets and $1.97 billion in total deposits. ...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $743.9 million. ... Eurobank is the 58th FDIC-insured institution to fail in the nation this year. Eurobank is one of three institutions closed in Puerto Rico today.

From the FDIC: Scotiabank de Puerto Rico, San Juan, Puerto Rico, Assumes All of the Deposits of R-G Premier Bank of Puerto Rico, Hato Rey, Puerto Rico

R-G Premier Bank of Puerto Rico, Hato Rey, Puerto Rico, was closed today by the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of December 31, 2009, R-G Premier Bank of Puerto Rico had approximately $5.92 billion in total assets and $4.25 billion in total deposits. ...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $1.23 billion.... R-G Premier Bank of Puerto Rico is the 59th FDIC-insured institution to fail in the nation this year. R-G Premier Bank of Puerto Rico is one of three institutions closed in Puerto Rico today.

From the FDIC: Banco Popular de Puerto Rico, San Juan, Puerto Rico, Assumes All of the Deposits of Westernbank Puerto Rico, Mayaguez, Puerto Rico

Westernbank Puerto Rico, Mayaguez, Puerto Rico, was closed today by the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of December 31, 2009, Westernbank Puerto Rico had approximately $11.94 billion in total assets and $8.62 billion in total deposits...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $3.31 billion. ... Westernbank Puerto Rico is the 60th FDIC-insured institution to fail in the nation this year. Western Bank was one of three institutions closed in Puerto Rico today.

There goes a quick $5+ billion from the DIF ...

by Calculated Risk on 4/30/2010 04:00:00 PM

First, housing economist Tom Lawler will be on CNBC around 4:15 PM ET with Maria Bartoromo to discuss the expiration of the housing tax credit.

Second, Goldman is having a bad day, from Dow Jones: Goldman Sachs Shares, Bonds Slide On Criminal Probe

The stock has slumped more than 20% since the Securities and Exchange Commission filed civil securities-fraud charges against the company two weeks ago. Analystssaid they see little near-term upside for the shares. The Wall Street Journal's report late Thursday that the Justice Department is conducting a criminal investigation into whether Goldman or its employees committed securities fraud in connection with mortgage trading pushed the stock down ...

Goldman is off almost 10% today.

Click on graph for larger image in new window.

And from Doug Short:

This graph from Doug is titled: "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

by Calculated Risk on 4/30/2010 02:41:00 PM

This is one of several industry specific indexes I track each month.

Click on graph for larger image in new window.

This is the first time in 29 months that the index is showing expansion.

Unfortunately the data for this index only goes back to 2002.

Note: Any reading above 100 shows expansion for this index.

From the National Restaurant Association (NRA): Restaurant Industry Outlook Continues to Improve as Restaurant Performance Index Tops 100 for the First Time in More Than Two Years

[T]the National Restaurant Association’s Restaurant Performance Index (RPI) ... stood at 100.5 in March, up 1.4 percent from February and its strongest level since September 2007. In addition, the RPI rose above 100 for the first time in 29 months, which signifies expansion in the index of key industry indicators.

The RPI’s solid performance in March was driven by improvements among both the current-situation and forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators reported net gains in both same-store sales and customer traffic in March, the first time in 31 months that both indicators stood in positive territory.”

“In addition, restaurant operators are increasingly optimistic about growth in sales and staffing levels in the months ahead, while their outlook for the economy soared to its strongest level in five years,” Riehle added.
...
For the first time in 22 months, restaurant operators reported net positive same-store sales.
...
Restaurant operators also reported a net increase in customer traffic in March, the first positive reading in 31 months.
emphasis added

Restaurants are a discretionary expense, and they tend to be 'first in, last out' of a recession for consumer spending (as opposed to housing that is usually first in and first out).

by Calculated Risk on 4/30/2010 11:59:00 AM

The change in private inventories was smaller this quarter - adding 1.7% to GDP in Q1 2010 compared to 4.4% in Q4 2009. It is important to note that the inventory contribution to Q4 GDP was from a slowdown in the liquidation of inventories, but in Q1 businesses were building inventories - and this inventory build will probably slow in Q2.

As I noted earlier, the two leading sectors, residential investment (RI) and personal consumption expenditures (PCE), were mixed. RI declined to a new record low as percent of GDP, however PCE increased at a 3.6% real annualized rate.

The increase in PCE does not seem sustainable unless employment and incomes increase soon. A large portion of the increase in PCE came from a decrease in personal saving.

Click on graph for larger image in new window.

This graph shows personal saving as a percent of disposable personal income.

It is not unusual for the saving rate to decline at the beginning of a recovery as people become more confident. This helps drive consumer spending, but with the high levels of household debt, I expect the saving rate to increase over the rest of the year.

Here are some Q1 numbers (all annualized):

Personal consumption expenditures (PCE) increased $130.7 billion

Personal saving declined $88.5 billion.

Government social benefits to persons increased $61.1 billion.

So the boost in PCE came from the decline in saving and the increase in benefits. That is not sustainable.

The second graph shows real personal income less transfer payments as a percent of the previous peak.

Unlike the recovery in GDP, real personal income less transfer payments has barely increased and is still 6.6% below the pre-recession level.

The peak of the stimulus spending is in Q2 2010 (right now), and then the stimulus spending starts to taper off in the 2nd half of 2010. So underlying demand better increase soon - and that means jobs and incomes going forward.

Unfortunately residential investment is usually one of the key engines for employment and growth at the beginning of a recovery - and I expect RI to be sluggish all year because of the huge overhang of existing housing units. So my guess is the recovery will probably remain sluggish, and I still expect a slowdown in the 2nd half of 2010.