RSS Feed by Calculated Risk on 6/04/2010 07:06:00 PM
Friday, June 04, 2010
Bank Failure #81: TierOne Bank, Lincoln, Nebraska
How have the mighty fallen.
Free falling from peak.
by Soylent Green is People
From the FDIC: Great Western Bank, Sioux Falls, South Dakota, Assumes All of the Deposits of TierOne Bank, Lincoln, Nebraska
As of March 31, 2010, TierOne Bank had approximately $2.8 billion in total assets and and $2.2 billion in total deposits. ...I guess they weren't top tier ...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $297.8 million. ... TierOne Bank is the 81st FDIC-insured institution to fail in the nation this year, and the first in Nebraska. The last FDIC-insured institution closed in the state was Sherman County Bank, Loup City, on February 13, 2009.
Bank Failure #80: Arcola Homestead Savings Bank, Arcola, Illinois
by Calculated Risk on 6/04/2010 06:08:00 PM
From the FDIC: FDIC Approves the Payout of the Insured Deposits of Arcola Homestead Savings Bank, Arcola, Illinois
The FDIC was unable to find another financial institution to take over the banking operations of Arcola Homestead Savings Bank....No one wanted this one ...
As of March 31, 2010, Arcola Homestead Savings Bank had approximately $17.0 million in total assets and $18.1 million in total deposits. ...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $3.2 million. Arcola Homestead Savings Bank is the 80th FDIC-insured institution to fail in the nation this year, and the twelfth in Illinois. The last FDIC-insured institution closed in the state was Midwest Bank and Trust Company, Elmwood Park, on May 14, 2010.
Bank Failure #79: First National Bank, Rosedale, Mississippi
by Calculated Risk on 6/04/2010 05:02:00 PM
From the FDIC: The Jefferson Bank, Fayette, Mississippi, Assumes All of the Deposits of First National Bank, Rosedale, Mississippi
As of March 31, 2010, First National Bank had approximately $60.4 million in total assets and $63.5 million in total deposits. ...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $12.6 million. ... First National Bank is the 79th FDIC-insured institution to fail in the nation this year, and the first in Mississippi. The last FDIC-insured institution closed in the state was Bank of Falkner, Falkner, on September 29, 2000.
Fannie Mae economist: House "price appreciation not supportable" and more
by Calculated Risk on 6/04/2010 04:00:00 PM
“Temporary tax credits change behavior temporarily. It’s simply shifted
demand forward. ... It actually created some price appreciation that’s not
supportable long term.”
Douglas Duncan, Fannie Mae Chief Economist, June 4, 2010 via Bloomberg (ht Brian)
And more on condo shadow inventory in New York from Bloomberg: Manhattan Empty Condos May Be Rentals as Leases Reign (ht Mike In Long Island)
About 8,700 new condos sit empty in Manhattan, with 75 percent not even listed for sale yet ... Developers taking out construction loans borrow an additional amount for interest reserves, which is intended to cover the monthly payments on the loan while the project is under construction and until sales begin ... reserves on loans made in 2007 and 2008 will dwindle in the second half of 2010 and early 2011.We've discussed this before - the flood comes when the interest reserves run dry.
The euro is down to 1.196 dollars. This is the lowest level since March 2006.
The TED spread increased to 41.59 (a measure of credit stress). This is still fairly low, but this is the highest level in eleven months. Note: This is the difference between the interbank rate for three month loans and the three month Treasury. The peak was 463 on Oct 10th and a normal spread is below 50 bps.
Click on graph for larger image in new window.This is a slightly different graph from Doug Short of dshort.com (financial planner).
This graph shows the ups and downs of the market since the high in 2007.
Earlier employment posts today:
Temporary Help Services starting to slow, Small Business hiring "Bleak"
by Calculated Risk on 6/04/2010 01:17:00 PM
One more graph based on data in the employment report ...
Earlier employment posts today:
Temporary Help
From the BLS report:
Temporary help services added 31,000 jobs over the month; employment in the industry has risen by 362,000 since September 2009.
This graph is a favorite of those expecting a huge rebound in employment. The graph is a little complicated - the red line is the three month average change in temporary help services (left axis). This is shifted four months into the future.The blue line (right axis) is the three month average change in total employment (excluding temporary help services and Census hiring).
Unfortunately the data on temporary help services only goes back to 1990, but it does appear that temporary help leads employment by about four months (although noisy).
The thinking is that before companies hire permanent employees following a recession, employers will first increase the hours worked of current employees (hours worked increased again in May) and also hire temporary employees.
Since the number of temporary workers increased sharply late last year, some people argued this was signaling the beginning of a strong employment recovery - probably in April and May. It didn't happen.
There was also evidence of a shift by employers to more temporary workers, and the joke in the comments was "We are all temporary now!". That is probably closer to the mark. The timing of this graph is useful - temporary help services does lead general employment - but the magnitude of the swings is probably less useful.
Small Business Hiring "Bleak"
The National Federation of Independent Business released the employment outlook from their May survey: Small Business Still Reluctant to Hire
“Since January 2008, the average employment per firm has been negative every month, including May 2010, which yielded a seasonally adjusted loss of negative 0.5 workers per firm. Most firms did not change employment in May, but for those that did, 8 percent increased average employment by 2.4 employees and 20 percent reduced their workforces by an average of 4 employees. Small business job creation has not crossed the 0 line in over 2 years."
...
“Overall, the job creation picture is still bleak. Poor sales and uncertainty continue to hold back any commitments to growth, hiring or capital spending. Job creation plans have been running far below comparable quarters in the recovery from two other major recessions."
