by Calculated Risk on 9/25/2010 08:41:00 AM

An interesting back story in the WSJ: On the Secret Committee to Save the Euro, a Dangerous Divide

Two months after Lehman Brothers collapsed in the fall of 2008, a small group of European leaders set up a secret task force ... Its mission: Devise a plan to head off a default by a country in the 16-nation euro zone.

And a year later - when Greece was near default - the committee hadn't agreed on a strategy. And that lead to the frantic last minute scramble to piece together a bailout for Greece - with Germany calling the shots.

by Calculated Risk on 9/24/2010 10:46:00 PM

A few stories:

From the WSJ: Bernanke: Efforts Failed to Produce Recovery With 'Sufficient Vigor'. CR Note: unless there are upside surprises in the employment report (to be released on Oct 8th) or the advance Q3 GDP report (released on Oct 29th), I think Bernanke has prepared the way to QE2.

From David Streitfeld at the NY Times: GMAC’s Errors Leave Foreclosures in Question

From Christine Hauser at the NY Times: Bank Losses Lead to Drop in Credit Card Debt

From NPR Planet Money: Toxie, Planet Money's pet toxic asset, died this week.

When we bought Toxie , in January of this year, she seemed like a great deal. We paid $1,000. That was 99 percent less than she cost dring the housing boom.

Every month, when homeowners paid their mortgages, we got a check. We thought we'd make back our investment before she died. But in the end, we collected only $449.

And on the four housing reports this week: "Been down so long it looks like up to me", (book by Richard Fariña)

New Home Sales: Unchanged from July, Worst August on Record

Existing Home Sales at 4.1 million SAAR, 11.6 months of supply

Single Family Housing Starts increase slightly in August

NAHB Builder Confidence stuck at low level in September

I'll have a weekly summary on Sunday.

by Calculated Risk on 9/24/2010 09:07:00 PM

From the FDIC: Whidbey Island Bank, Coupeville, Washington, Assumes All of the Deposits of North County Bank, Arlington, Washington

As of June 30, 2010, North County Bank had approximately $288.8 million in total assets and $276.1 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $72.8 million. ... North County Bank is the 127th FDIC-insured institution to fail in the nation this year, and the ninth in Washington.

Just 2 this week? The unofficial problem bank list will be increasing ...

by Calculated Risk on 9/24/2010 05:29:00 PM

Sweet slice of Haven
Too big of a bite was had
Indigestible
by Soylent Green is People
From the FDIC: First Southern Bank, Boca Raton, Florida, Assumes All of the Deposits of Haven Trust Bank Florida, Ponte Vedra Beach, Florida

As of June 30, 2010, Haven Trust Bank Florida had approximately $148.6 million in total assets and $133.6 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.9 million. ... Haven Trust Bank Florida is the 126th FDIC-insured institution to fail in the nation this year, and the twenty-fourth in Florida. The last FDIC-insured institution closed in the state was Horizon Bank, Bradenton, on September 10, 2010..

by Calculated Risk on 9/24/2010 04:51:00 PM

Press Release: NCUA Adopts Reforms for Corporate Credit Union System, Protects Consumers

The National Credit Union Administration today assumed control of three undercapitalized corporate credit unions, announced a plan to isolate the impaired assets in the corporate credit union system, and finalized a set of stronger regulations - key elements in its efforts to resolve the financial challenges facing corporate credit unions without disrupting consumer service.
...
Setting the plan into motion required conservatorship today of three additional corporate credit unions that are not viable: Members United Corporate Federal Credit Union of Warrenville, Illinois; Southwest Corporate Federal Credit Union of Plano, Texas; and Constitution Corporate Federal Credit Union of Wallingford, Connecticut. In 2009, U.S. Central Corporate Federal Credit Union of Lenexa, Kansas, and Western Corporate Federal Credit Union of San Dimas, California, were also placed into conservatorship.

The WSJ reports:

Friday's moves include the seizure of three wholesale credit unions and an unusual plan by government officials to manage $50 billion of troubled assets inherited from failed institutions. To help fund the rescue, the National Credit Union Administration plans to issue $30 billion to $35 billion in government-guaranteed bonds, backed by the shaky mortgage-related assets.

These "corporate credit unions" don't serve the general public - they are owned by the "natural person" credit unions - and all the "natural person" money held at these corporate credit unions was guaranteed early last year. But this is another $50 billion in "troubled" assets that will need to be worked through.