by Calculated Risk on 5/14/2010 05:10:00 PM

Good-bye Satilla
One more Georgia bank wipe-out
B F F begins
by Soylent Green is People
From the FDIC: Ameris Bank, Moultrie, Georgia, Assumes All of the Deposits of Satilla Community Bank, Saint Marys, Georgia

As of March 31, 2010, Satilla Community Bank had approximately $135.7 million in total assets and $134.0 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.3 million. ... Satilla Community Bank is the 69th FDIC-insured institution to fail in the nation this year, and the eighth in Georgia.

Friday is here.

by Calculated Risk on 5/14/2010 04:26:00 PM

From the SacBee: Schwarzenegger budget would eliminate welfare

Gov. Arnold Schwarzenegger asked lawmakers Friday to eliminate the state's welfare program starting in October and dramatically scale back in-home care for elderly and disabled as part of his May budget revision to close a $19.1 billion deficit.

[Schwarzenegger] also proposed cuts to state worker compensation.
...
Schwarzenegger proposed eliminating state-subsidized child care for all but preschoolers ...

From the LA Times: Schwarzenegger unveils austere budget plan

Gov. Arnold Schwarzenegger outlined a stark vision Friday of a California that would no longer lend a helping hand to some of its poorest and neediest citizens, proposing a budget that would eliminate the state's welfare-to-work program and most child care for the poor.

His $83.4-billion plan would freeze funding for local schools, further cut state workers' pay and take away 60% of state money for local mental health programs.

During the press conference, Schwarzenegger compared California to Greece. Ouch.

by Calculated Risk on 5/14/2010 02:37:00 PM

There will be a live webcast of Governor Schwarzenegger's comments here on the new budget that his office says includes "absolutely terrible cuts".

From the LA Times: Schwarzenegger's revised budget plan is expected to eliminate health programs

Administration officials declined to reveal which specific programs the governor would eliminate. But officials involved in the budget process, who spoke on condition of anonymity because they are not authorized to speak publicly, said they would probably include home healthcare for the elderly and disabled, a nearly $2-billion program that serves 440,000 Californians.

From the SacBee: Schwarzenegger's prison plan would move nonviolent felons to county jails

Gov. Arnold Schwarzenegger will revive a plan to house 15,000 nonviolent felons in county jails instead of state prisons, a cost-cutting move that likely would result in some inmates leaving jail early. ... His office warned earlier this week that the package will contain "absolutely terrible cuts" to shrink a nearly $20 billion deficit.

The cutbacks and layoffs continue for many state and local governments.

by Calculated Risk on 5/14/2010 11:57:00 AM

From the Financial Times: Euro plunges as growth worries mount

[S]igns of deflation emerged in Spain and concerns grew that the latest tough austerity measures across Europe would damp growth in the region. This sent the euro to new 18-month lows against the dollar and gold to a new high.
excerpt with permission

At the same time China is trying to slow down their overheated real estate sector market:

[T]he China Securities Journal reported that Shanghai’s municipal government was putting up nearly 40 lots of land for sale in the city’s most extensive release yet.

And the stronger dollar will probably impact U.S. exports to Europe (although trade to Europe is a fairly small part of U.S. GDP). Still manufacturing has been one of the better performing U.S. sectors, but with the inventory correction mostly over (businesses are now building inventories) and if exports soften - this will impact U.S. growth.

A 2nd half slowdown in the U.S. appears very likely.

by Calculated Risk on 5/14/2010 09:15:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production increased 0.8 percent in April after having risen 0.2 percent in March. The rates of change for both January and March were revised up, but the rate of change for February was revised down; nevertheless, the cumulative change over those months was only slightly lower than previously reported. Manufacturing output climbed 1.0 percent in April for a second consecutive month and was 6.0 percent above its year-earlier level. The increases in manufacturing continued to be broadly based across industries.

Click on graph for larger image in new window.

This graph shows Capacity Utilization. This series is up 7.9% from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 73.7% is still far below normal - and 8.5% below the the pre-recession levels of 80.5% in November 2007.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

This is the highest level for industrial production since Dec 2008, but production is still 9.0% below the pre-recession levels at the end of 2007.

Still a long way to go.