by Calculated Risk on 8/21/2010 12:49:00 PM

"I could borrow $2 billion tomorrow for 3 1/2 percent. But what am I going to do with it?"David Speer, CEO of Illinois Tool Works which has 60,000 employees worldwide in more than 800 business units and $14 billion in sales.

The above quote is from an article by Neil Irwin in the WaPo: With consumers slow to spend, businesses are slow to hire

There is no reason to invest when there is excess capacity in most industries (and excess supply in housing). This excess capacity or lack of demand - and therefore lack of new investment - is a key reason why the recovery is sluggish.

by Calculated Risk on 8/21/2010 08:29:00 AM

From Sharon Bernstein at the LA Times: U.S. restaurants starved for business

"It's been a miserable 21/2 years," said Chuck Keagle, who has closed six of the 10 restaurants in his family's Rancho Cucamonga-based Cask 'n Cleaver steakhouse chain since the downturn began.
...
Overall, customers spent about 7% less in 2009 than the previous year, and business is still slow, said Darren Tristano, analyst with the food industry research firm Technomic Inc. The company expects consumers to spend just 0.5 percentage point more on restaurant food this year than last year.
...
"We're in survival mode — have been for a while," said [Matt DeMasi, who co-owns Zach's Cafe in Studio City] ...

"This is the weakest that the restaurant business has been," said [Bonnie Riggs, NPD Group's restaurant industry analyst]. Year over year, the number of patrons coming to restaurants has declined for each of the last seven quarters — the most prolonged drop in the 22 years that the company has been keeping track, she said.

Nationwide, the number of restaurants dropped in 2010 for the first time in more than a decade, according to NPD, falling 5,202 to 579,416.

Restaurants are a discretionary expense and are frequently first in and last out of a recession. The second half slowdown is already hitting restaurants again according to the National Restaurant Association's Restaurant Performance Index that showed contraction in June.

by Calculated Risk on 8/20/2010 09:14:00 PM

From the FDIC: Rabobank, National Association, El Centro, California, Acquires All the Deposits of Two Banks in California

As of June 30, 2010, Butte Community Bank had total assets of $498.8 million and total deposits of $471.3 million; and Pacific State Bank had total assets of $312.1 million and total deposits of $278.8 million. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Butte Community Bank will be $17.4 million; and for Pacific State Bank, $32.6 million. ... These closings bring the total for the year to 116 banks in the nation, and the seventh and eighth in California.

From the FDIC: Pacific Western Bank, San Diego, California, Assumes All of the Deposits of Los Padres Bank, Solvang, California

As of June 30, 2010, Los Padres Bank had approximately $870.4 million in total assets and $770.7 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $8.7 million. ... Los Padres Bank is the 117th FDIC-insured institution to fail in the nation this year, and the eighth in California.

From the FDIC: Westamerica Bank, San Rafael, California, Assumes All of the Deposits of Sonoma Valley Bank, Sonoma, California

As of June 30, 2010, Sonoma Valley Bank had approximately $337.1 million in total assets and $255.5 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10.1 million. ... Sonoma Valley Bank is the 118th FDIC-insured institution to fail in the nation this year, and the ninth in California.

Eight down today.

by Calculated Risk on 8/20/2010 07:04:00 PM

From the FDIC: Urban Partnership Bank, Chicago, Illinois, Assumes All of the Deposits of ShoreBank, Chicago, Illinois

As of June 30, 2010, ShoreBank had approximately $2.16 billion in total assets and $1.54 billion in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $367.7 million. ... ShoreBank is the 114th FDIC-insured institution to fail in the nation this year, and the fifteenth in Illinois. The last FDIC-insured institution closed in the state was Palos Bank and Trust Company, Palos Heights, on August 13, 2010.

This was no surprise (in the works for some time and rumored this morning). That makes four today ...

by Calculated Risk on 8/20/2010 06:15:00 PM

From the FDIC: CenterState Bank of Florida, National Association, Winter Haven, Florida, Acquires All the Deposits of Two Banks in Florida

As of June 30, 2010, Community National Bank At Bartow had total assets of $67.9 million and total deposits of $63.7 million; and Independent National Bank had total assets of $156.2 million and total deposits of $141.9 million. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Community National Bank At Bartow will be $10.3 million; and for Independent National Bank, $23.2 million. ... These closings bring the total for the year to 112 banks in the nation, and the twenty-first and twenty-second in Florida.

From the FDIC: River Community Bank, National Association, Martinsville, Virginia, Assumes All of the Deposits of Imperial Savings and Loan Association, Martinsville, Virginia

As of June 30, 2010, Imperial Savings and Loan Association had approximately $9.4 million in total assets and $10.1 million in total deposits ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $3.5 million. ... Imperial Savings and Loan Association is the 113th FDIC-insured institution to fail in the nation this year, and the first in Virginia.

by Calculated Risk on 8/20/2010 03:20:00 PM

MarketWatch is reporting the consensus for July existing home sales is 4.85 million SAAR (seasonally adjusted annual rate).

And from Dow Jones: Week Ahead

"July existing-home sales ... likely declined 4.3% from June"

June sales were reported as 5.37 million, so a decline of 4.3% would be 5.14 million SAAR.

Note: July existing home sales will be reported next Tuesday.

Housing economist Tom Lawler's preliminary forecast was 3.95 million SAAR (based on a bottom up analysis).

Many of the regional reports showed sales declines of 20% or more from July 2009 when the NAR reported sales of 5.14 million SAAR. A 20% decline from July 2009 would be in the low 4 millions ...

Maybe the MarketWatch and Dow Jones consensus numbers are incorrect (other numbers will be released later today), or there is probably going to be a big miss next Tuesday. Take the WAY under!

Next week will be VERY busy - I'll have more in the weekly preview on Sunday.