by Calculated Risk on 7/15/2011 11:27:00 PM

I've been hearing from more and more people that they are concerned about the debt ceiling negotiations. Many of these people are busy with their daily lives, and they don't usually pay close attention to politics or budget issues.

This concern is probably why consumer sentiment fell sharply in the Reuters / University of Michigan preliminary July survey.

No worries.

The debt ceiling is about paying the bills, not the deficit. However it is not uncommon for the party in control of Congress to try to use the debt ceiling as a tool to try to negotiate on budget priorities. That is what has been happening.

But at any time Congress can agree to pay the bills, and they will this time too. As Senator McConnell (R) noted this week, if the U.S. defaults, the American people would blame the party in control of Congress - the Republican party - and the "Republican brand" would be forever toxic. The leaders of the party can't allow that to happen, and the are now looking for the exit.

From Lisa Mascaro and Kathleen Hennessey at the LA Times: House Republicans brace for compromise on debt

Republican leaders in the House have begun to prepare their troops for politically painful votes to raise the nation's debt limit ... Republican leaders orchestrated a series of public moves intended to soften the blow for conservatives. They agreed to give the House an opportunity to vote on two top conservative priorities: a so-called cut-cap-and-balance bill, which would order $111 billion in cuts in federal programs for 2012 and impose a cap on future spending, and a constitutional amendment that would require a balanced federal budget.

The Democratic leadership in the Senate is also expected to allow votes on one, and perhaps both, measures. Neither is expected to become law ... Congress is likely to spend much of next week on those measures, then could take up a debt ceiling measure in the Senate toward the end of next week.

Ignore the votes this coming week. These bills will not pass the Senate, and no Republican or Democratic President would sign them anyway - they are just for show. The real votes start the following week, and the debt ceiling will be increased.

This is almost over.

by Calculated Risk on 7/15/2011 09:18:00 PM

Standstill savings skid
Setback Summit soon shutdown
Shambled shipwreck sunk!
by Soylent Green is People
From the FDIC: The Foothills Bank, Yuma, Arizona, Assumes All of the Deposits of Summit Bank, Prescott, Arizona

As of March 31, 2011, Summit Bank had approximately $72.0 million in total assets and $66.4 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $11.3 million. ... Summit Bank is the 55th FDIC-insured institution to fail in the nation this year, and the second in Arizona.

That makes four today.

Earlier:
• From the NY Fed: Empire State Manufacturing Survey indicates conditions deteriorated in July
• Consumer Sentiment declines sharply in July
• Industrial Production increased 0.2% in June, Capacity Utilization unchanged
• Eight Banks Fail European Stress Tests
• Key Measures of Inflation ease in June

by Calculated Risk on 7/15/2011 07:15:00 PM

Here is a new routine from stand-up economist Yoram Bauman on YouTube ...

Earlier:
• From the NY Fed: Empire State Manufacturing Survey indicates conditions deteriorated in July
• Consumer Sentiment declines sharply in July
• Industrial Production increased 0.2% in June, Capacity Utilization unchanged
• Eight Banks Fail European Stress Tests
• Key Measures of Inflation ease in June

by Calculated Risk on 7/15/2011 06:08:00 PM

Balmy Florida
Sweating, clock staring bankers
F.D.I.C. Time!
by Soylent Green is People
From the FDIC: Premier American Bank, National Association, Miami, Florida, Assumes All of the Deposits of First Peoples Bank, Port Saint Lucie, Florida

As of March 31, 2011, First Peoples Bank had approximately $228.3 million in total assets and $209.7 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $7.4 million. ... First Peoples Bank is the 54th FDIC-insured institution to fail in the nation this year, and the seventh in Florida.

The Friday afternoon ritual continues - three down today so far.

Earlier:
• From the NY Fed: Empire State Manufacturing Survey indicates conditions deteriorated in July
• Consumer Sentiment declines sharply in July
• Industrial Production increased 0.2% in June, Capacity Utilization unchanged
• Eight Banks Fail European Stress Tests
• Key Measures of Inflation ease in June

by Calculated Risk on 7/15/2011 04:19:00 PM

Sweltering peaches.
Two more tumble off the tree
A bitter harvest
by Soylent Green is People
From the FDIC: Ameris Bank, Moultrie, Georgia, Acquires All the Deposits of Two Georgia Institutions: High Trust Bank, Stockbridge and One Georgia Bank, Atlanta

As of March 31, 2011, High Trust Bank had total assets of $192.5 million and total deposits of $189.5 million; and One Georgia Bank had total assets of $186.3 million and total deposits of $162.1 million.
...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for High Trust Bank will be $66.0 million and for One Georgia Bank, $44.4 million. ...The closings are the 52nd and 53rd FDIC-insured institutions to fail in the nation so far this year and the fifteenth and sixteenth in Georgia.