Wednesday, March 31, 2010

Wednesday roundup (03-31-10)

Quotes of the Day:

"It throws a little cold water on the idea we were going to be adding jobs in March, which is a little disappointing, people thought finally this might be the month." -- John Canally, investment strategist and economist for LPL Financial in Boston. (Reuters)

"The language of violence always presages violence. I watched it in war after war from Latin America to the Balkans. The impoverishment of a working class and the snuffing out of hope and opportunity always produce angry mobs ready to kill and be killed. A bankrupt, liberal elite, which proves ineffectual against the rich and the criminal, always gets swept aside, in times of economic collapse, before thugs and demagogues emerge to play to the passions of the crowd. I have seen this drama. I know each act. I know how it ends." -- Journalist Chris Hedges (Truthdig)

Long-Term Rates Finally on Verge of Breaking Out (Barrons)

Fed’s Fisher Says U.S. Can’t Ignore Effect of Deficit on Yields (Bloomberg)

Fed Ends Its Purchasing of Mortgage Securities -- "its $1.25 trillion program ... has been credited with holding mortgage interest rates at near-record lows and slowing the nationwide decline in home prices that threatened to send the economy into an extended slump." (The New York Times)

The Market's Not Ready For Fed To Leave: The Forbes Investor Team panelists are wary of what will happen to mortgage-backed securities once the Fed stops buying them. (Forbes)

U.S. companies unexpectedly cut 23,000 jobs in March: The decline is the smallest in two years and 1,000 fewer than in February, ADP Employer Services says. A gain of 40,000 jobs had been forecast. (The Los Angeles Times)

Thinking the Unthinkable: A U.S. Rating Downgrade (The Wall Street Journal)

HUD Study Examines Rise In First-Time Homelessness (NPR) Costs Associated With First-time Homelessness for Families and Individuals (HUD)



Fannie Mae: Delinquencies Increase in January (Calculated Risk blog)

CMBS [commercial mortgage backed securities] Delinquencies Increase to 6 Percent in February (DSNews.com)

Problem Bank List Continues to Grow (CFEconomics blog)

Bank Failures, First Quarter (Economic Signs of the Times blog)


Downtown NYC Towers Empty as Best Market Falters (Bloomberg)

Rhode Island Flooding Worst in 100 Years (The Epoch Times)

Speeding 'cushion' may dwindle due to recession (USAToday)

Harrisburg, Pennsylvania, to Miss Incinerator Loan Payment -- "faces $68 million in debt service payments this year" (Bloomberg)

Technicolor to cut 625 Grass Valley jobs worldwide (Reuters)

PIMCO fears UK 'debt trap': The US bond fund PIMCO has warned that Britain risks a vicious circle of rising debt costs as global investors demand a penalty fee on gilts to protect against inflation. (The Telegraph)

Irish Banks Need $43 Billion on ‘Appalling’ Lending (Bloomberg)

IMF Cuts German GDP Forecast, Urges Deficit Reduction (Bloomberg)

Max Keiser interviewed by Helen Skopis on Athens Intl Radio - 31 March 2010 (Youtube)





Strategic Defaults: Lessons From the Great Depression (The New York Times blogs)

Tuesday, March 30, 2010

Tuesday roundup (03-30-10)

Could This Be Start of 'The Great Bear Market in Bonds'? (CNBC)

Treasury 10-Year Yield Near Highest Since June on U.S. Economy -- Breaking “critical support” in the 10-year note yield at 4 percent would make an advance to 4.30 percent possible, wrote [U.S. government bond strategist at Royal Bank of Scotland Group Plc William] O’Donnell in a research note today. (Bloomberg)

With health bill, Obama has sown the seeds of a budget crisis (The Washington Post)

Five-day mail delivery plan would cut tens of thousands of jobs (Government Executive.com)

Europe risks 'second league' of world economies: IMF (Agence France-Presse)

Irish toxic loans are half as big as economy, bank bailout reveals: Ireland creates 'bad bank' to rescue stricken lenders and in effect nationalises second bank as it clears up after property crash (The Guardian)

Irish banks may require up to [Euro] 32 billion (Calculated Risk blog)

Ireland's worst bank fears 'surpassed': The nation's financial institutions may need $42.7 billion to deal with fallout from the real estate slump. (Bloomberg)

Thousands of [banking] jobs are facing the axe [in Ireland] (The Irish Independent)

Schroders Says U.K. May Become Bond-Vigilante Target (Bloomberg)

Power crunch looms for Britain: The taxpayer must pay for new plants, warns new Npower boss Volker Beckers (Sunday Times of London)

German Banks May Face Losses on Southern Europe (Bloomberg)

Italy should observe fiscal discipline: IMF (Agence France-Presse)

Greece faces high rates [twice what Germany must pay in interest] despite eurozone backstop (The Associated Press)

Greek economy's failure would have ripple effect across eurozone, world -- and "no IMF defense would be large enough to hold the line on a string of national debt failures across the developed world." (The Dallas Morning News)

Quebec May Bring Forward Tax Increases to Tackle [US$126.8 Billion] Budget Deficit (Bloomberg)

California USA vs. Ontario Canada - Which State (Province) Is In Worse Shape? Canadian Banks vs. US Banks Comparison (Mish's Global Economic Trend Analysis blog)

House Prices Slip Amid Fears of a Double Dip (Housing Wire)

Fed’s Housing Exit Leaves 50/50 Chance of a Dip (Barrons blogs)

Which Way Did House Prices Go? (The Mess That Greenspan Made blog)

Some who can afford mortgages prefer to walk: These fed-up homeowners say they left because bailed-out banks duped them (The Los Angeles Times)

[State Controller John] Chiang: Worst yet to come for California budget crisis -- "the bad year's 2012" (Contra Costa Times)

Fitch downgrades Illinois ratings, may cut again (Reuters)

'Doomsday' Cuts Proposed In 2011 Budget [To Reduce $121 Million Budget Deficit in Baltimore]: Parks, Public Works Departments Take Big Hit (WBAL TV)

[Birmingham AL] Mayor William Bell presents plan to avoid $77 million deficit (The Birmingham News blogs)

NY freezes construction funding -- "'If there’s no budget deal in sight and the governor is not willing to put money in for capital projects, it’s going to create panic in the industry,' [a vice president of the Associated General Contractors of New York State Steve] Stallmer said." (The Business Review of Albany)

N.J. farmers hope for a quick-dry from record storms -- "This is shaping up as the perfect storm now, between the big snows of February — twice as much as normal — and twice as much rain in March," [Bill Sciarappa, an agriculture and resource management agent with Rutgers University] said Tuesday. "If we get the same pattern in April, this will be possibly the worst spring situation most of us have had in the many decades we can remember." (The Associated Press)

Record March Rain Continues: Residents in waterlogged Eastern states battle the deluge and swollen rivers, some with record amounts of rainfall, reports Elaine Quijano. (CBSNews)



Heavy rainstorms pound Northeast: As weather forecasters predict heavy rains may bring the worst flooding in a century to Rhode Island, the state governor warns that parts of I-95, the main highway linking Boston and New York, might have to be closed. The Weather Channel's Julie Martin reports. (MSNBC)

Visit msnbc.com for breaking news, world news, and news about the economy



Relentless Storm in Northeast: A pounding storm left a trail of flooded homes and submerged cars in parts of the Northeast. As Whit Johnson reports, the epic flooding is partially linked to the melting record snowfall. (CBSNews)



Economist Johnson urges breakup of big U.S. banks (Reuters)

A future financial meltdown?: March 30: Simon Johnson, author of "13 bankers," talks about his new book about the possibility of a future financial meltdown. (Morning Joe, MSNBC)

Visit msnbc.com for breaking news, world news, and news about the economy



To rob a country, own a bank: William Black, author of "Best way to rob a bank is to own one" talks about deliberate fraud on Wall St.

(Part 1) (The Real News)



(Part 2) (The Real News)



(Part 3) (The Real News)



(Part 4) (The Real News)



(Part 5) (The Real News)



What if Banks Held 100% Capital Reserves? (The Atlantic)

10 Questions for Finance Reformers by Barry Ritholtz, author of Bailout Nation (The Big Picture blog)

Odd One Out: OK, class, time for another Financial Armageddon brain teaser. Can you tell which of the following recent reports is the odd one out? ... "Bair: CRE Will Drive Regional Bank Failures To A Higher Level Than Last Year" ... "Half of Commercial Mortgages to Be Underwater: Warren" ... "Dugan: New CRE Limits on the Way" ... [-->] Wall Street "Commercial Real Estate Is On A Roll" [<-- I guess this one!] ... "Bank Failures Highlight Lurking Problem" ... "Geithner: Commercial Real Estate Loans Problematic" (Financial Armaggedon)

Monday, March 29, 2010

Monday roundup (03-29-10)

Quote of the Day:

"If income is not going up, but consumer spending is going up, there are only three possible explanations. Consumers have either gotten increased credit and are borrowing more, they are spending savings, or they are selling assets. If they are spending savings or selling assets to support their spending, the economy is in very bad shape, somewhat similar to the way it was during the Great Depression in the 1930s. Since the savings rate was still a positive number, consumers were not taking more money out of their savings accounts than they were putting into them." -- Daryl Montgomery, organizer of the New York Investing meetup (Seeking Alpha blog)

State Debt Woes Grow Too Big to Camouflage (The New York Times)

Half of Commercial Mortgages to Be Underwater: Warren (CNBC)

U.S. Postal Service pushes to cut Saturday mail delivery early next year: The proposal, which would save $5.1 billion annually by 2020, would eliminate the equivalent of 49,000 full- and part-time jobs. (The Los Angeles Times)

Roach: GD [Great Depression] II awaits if China bashing rhetoric turns into protectionism (Credit Writedowns blog)

U.S.-Bound Boxes Pile Up in Asia as Lines Avoid Adding Ships (Bloomberg)

It's Official - America Now Enforces Capital Controls (ZeroHedge blog)

Residential Investment Stalled -- "Stated simply: One of the usual engines of recovery - residential investment - isn't contributing this time." (Calculated Risk blog)

Greece's Threat to the Euro (The American Enterprise Institute)

Ireland Prepares ‘Emergency Transfusions’ for Its Wounded Banks (Bloomberg)

European Banks Face $209 Billion Shortfall on [Commercial] Real Estate Debt (Bloomberg)

U.K. Banks Face Real-Estate Debt Gap -- [they have the majority of the exposure to the European CRE problem] (The Wall Street Journal)

Major UK Banks Face Refinancing Challenge [of "more than 300 billion pounds ($448.4 billion) of government-backed funding over the next two to three years"]: Report (ABCNews)

UK bank lending the key to economic recovery: The UK government has provided nearly £1 trillion of support to the banking sector since the onset of the financial crisis. ... So why are banks lending less? (The BBC)

U.K. Financial Firms to Cut 17,000 Jobs in First Half, CBI Says (Bloomberg) (The Times of London)

RBA Says [Australia's] House Prices ‘Quite High,’ Signals Rate Rise (Bloomberg)

United States on the way to bankruptcy (New Jersey Newsroom)

Get ready for at least 5 more years of underwater mortgages (Sun Sentinel of Fort Lauderdale, FL blogs)

Stocks Soar, but Many Analysts Ask Why (The New York Times)

Finding A Job Is Hard For Even The Most Educated (NPR)

Grasshopper outlook strikes fear on Western range (The Associated Press)

Misunderstanding the Last Financial Crisis (The Big Picture blog)

Sunday, March 28, 2010

Sunday roundup (03-28-10)

Quote of the Day:

"Greece still needs to raise a big amount money, and there is no guarantee that they can do it cheaply. There’s still a lot of uncertainty, and we don’t know whether this mechanism that is being put in place works until it’s tested." -- Robin Marshall, director of fixed income in London at Smith & Williamson Investment Management. (Business Week)

Sell-off in US Treasuries raises sovereign debt fears: Investors are braced for a further sell-off in US Treasuries after dramatic moves last week raised fears that the surfeit of US government debt is starting to saturate bond markets. (The Telegraph)

St. Louis bankers use higher rates, cash to attract more deposits (St. Louis Post-Dispatch)

Greenspan Calls Treasury Yields ‘Canary in the Mine’ (Bloomberg) (Bloomberg video) "Life for an actual canary in a coal mine could be described in three words - short but meaningful. Early coal mines did not feature ventilation systems, so miners would routinely bring a caged canary into new coal seams. Canaries are especially sensitive to methane and carbon monoxide, which made them ideal for detecting any dangerous gas build-ups. As long as the canary in a coal mine kept singing, the miners knew their air supply was safe. A dead canary in a coal mine signalled an immediate evacuation." (WiseGeek)

Treasuries find Greenspan's canary fainting in government mine (Bloomberg)

Year-end growth spurt not likely to be repeated: Economy grows at 5.6 percent pace in 4Q; growth spurt unlikely to be repeated this year (The Associated Press)

New York's $105B pension timebomb: The city pays 22% of its budget to employee benefits -- and it will only get worse (The New York Post)

[In Connecticut] State's Deficit [of $350 million] Still Stands After All-Night Battle In Senate (The Hartford Courant)

'Devastating' layoffs loom in school districts statewide: Thousands of teachers, other staffers hit; total could top 20,000 [in Illinois] (The Chicago Sun-Times)

4-Day School Weeks Coming To Illinois (Mish's Global Economic Trend Analysis)

L.A. school unions agree to cut days from academic calendar: If approved by members of the employee groups, plan to shorten this school year by five days and next year by seven would save L.A. Unified $140 million and preserve some class sizes. (The Los Angeles Times)

European Banks Face $209 Billion Shortfall on Real Estate Debt (Bloomberg)

Moth forces wine country's secret into the open: Appearance of grape-eating moth in California's premier vineyards brings 'secret' to light (The Associated Press)

Wine Country sounds alarm over grapevine moth (The San Francisco Chronicle) (Bloomberg) (The New York Times)

Economy slams churches at unprecedented rate: Nearly 40% of churches reported declines in giving in 2009, according to the annual “State of the Plate” research, with megachurches and West Coast churches suffering most. (Oregon Faith Report)

Washington considers a decline of world oil production as of 2011 (Oil Man blog)

Saturday, March 27, 2010

Saturday roundup (03-27-10)

Quotes of the Day:

[On US bank failures:] "Every Friday night, of course, is bank failure night in the US, when they announce what banks failed that week, and I find it instructive -- there's two data points that come out and they always say that, 'Here are the assets of the bank,' and let's call it X, and then they say what it costs the FDIC. And typically it's cost the FDIC .25 of X. In other words, the dollar of financial assets that he had that was supported by the nickel [of reserves], that's already gone, the nickel's gone. They lost another 25 percent of it. So those banks lost their capital six times over. And that's what I think is a true reading of what the banking system is like. ..."

[On double-dip recession:] "Well, if we go down because interest rates are rising, it could almost be catastrophic. You know, if interest rates go up and then the deficit goes up and then people stop buying houses and, you know, it gets more expensive to buy cars, man, it's just the WORST of all possible developments here, so. yeah, I can actually imagine that it would be an utter disaster if it went because of that reason. Interest rates going up, where the Fed lost control of interest rates, which they might be losing control right now. But the long end of the market is not buying into this any more and there's certain evidence that the market is turning their backs on US Treasuries. We have some corporates that traded some better yields than the US government now. And that's very, very telling. ...

"Governments have their 10 fingers in the dike here. And my God, if we spill another leak here, there's going to be, will be nothing else they can do. We already have a zero interest rate policy. We've already blown our deficits out to unimaginable proportions. There's nothing left. So if there's one other leak here, we're going to have a problem. And I might suggest that the leak will be in the bond market, 'cause I kind of smell it having a problem here and if those rates start moving up, that will end things. ...

"When I read, you know, the Wall Street Journal article that people don't want to buy treasuries, right on the front page, we're there, OK? ... As an investor, I would be watching like a hawk what goes on in the US treasury market here for the next little while." -- Eric Sprott, founder, CEO, and senior portfolio manager (managing $3 billion) of Sprott Asset Management and CEO of Sprott Money, from audio interview. (ZeroHedge) (Audio at King World News)

"If you start getting bond yields rising because there's a belief that you can't finance yourself, a la Greece, and someone clearly has stepped away from this party of funding, someone is no longer at the auctions they were at, the yields, look at the spreads, look at the tails, you've got a bigger problem, because your debt's much bigger and your GDP in my opinion is in decline right now from its peak fourth quarter. ... So watch the yields closely. The moment you start seeing equities breaking back on the S&P through that 1150 level at the same time as yields are pushing up on the 10-year through four [percent], you've got a big problem. ... My view is stay with this dollar, until you start to see equities begin to crack and yields beginning to rise as a function of a soveriegn crisis ... at which point the dollar will tip and it will tip big at that point. ... the moment you start seeing a crisis coming through the Treasury market at the equity market you've got to get out of equities." -- Philip Manduca, Head of Investment of the ECU Group.(Zero Hedge) (CNBC)






Everyone's Freaking Out About Soaring Yields Now (The Business Insider)

Treasury Yields Rise; What's Cooking? (Mish's Global Economic Trend Analysis)

Chart of Ten-Year US Treasury Yield (See full gallery view at Stockcharts.com)








Matt Zeman of LaSalle Futures Group says the Treasury will have to pay more to sell its bonds. (CNBC)





It’s official: Ambac’s CDS triggered -- "a bankruptcy credit event has occurred in respect of Ambac Assurance Corporation, which provides financial guarantee insurance for public and structured finance obligations." (FT Alphaville)

JPMorgan, Lehman, UBS Named in Bid-Rigging Conspiracy ["to pay below-market interest rates to U.S. state and local governments on investments"] (Bloomberg) This in the wake of a story 10 days ago that "Deutsche Bank, JPMorgan, UBS Are Charged With Fraud ... linked to the sale of derivatives to the City of Milan." (Bloomberg)

Top Fed Official Says Megabanks Need To Shrink Or Crises Will Keep Occurring (The Huffington Post)

Mauldin: What Does Greece Mean to You? (Credit Writedowns blog)

Europe's leaders need to rise to this challenge (The Independent)

Who dares slay the public sector monster?: Business has greeted Alistair Darling’s budget with a mixture of despair and disbelief as his refusal to reduce public spending and cut the national debt will hamper efforts to deliver growth (The Sunday Times of London)

Caricom [the Caribbean regional trade bloc] heading for bankruptcy - Guayana president (Thomson Reuters) (Caribbean Net News)

California unemployment rate hovers at record high (San Diego Union-Tribune)

California Legislature's approval rating hits record low: Just 9% of likely voters approve of the job the lawmakers are doing, a poll finds. The survey also finds Whitman 50 points ahead of Poizner in the GOP race for governor. (The Los Angeles Times)

Oakland [CA] council weighs 2 taxes to ease [$42.6 million] deficit (San Francisco Chronicle)

Vallejo's Painful Lessons in Municipal Bankruptcy: Two years after going broke, the California city still isn't free of its crushing pension obligations. (The Wall Street Journal)

Mobile [AL] faces $18M budget deficit (Fox10TV)

Foreclosure or forgiveness? (FT Alphaville blog)

Summer Jobs Outlook: Just as Tough as Last Year (CNBC)

Heading Off the Next Financial Crisis (The New York Times magazine)

Friday, March 26, 2010

Friday roundup (03-26-10)

Quotes of the Day:

"It's the moment bond vigilantes have been waiting for. Three times this week, the U.S. government was forced to pay sharply higher rates on tens of billions worth of Treasuries to entice buyers – an ominous sign that global investors may be losing faith in the United States' ability to manage its swelling debt load. If it keeps up, the trend could lead to higher interest rates on everything from home mortgages and car loans to other forms of credit. It would also make it costlier for the U.S. government to finance its massive borrowing." -- Barrie McKenna (The Globe and Mail of Toronto)

"There are still a lot of foreclosures in the pipe line. They're backed up because of paper work at the banks or moratoriums at the state level. But they are the elephant in room. And who knows what will happen when that inventory hits the market. It will more than likely hurt housing prices even more." -- Greg McBride, chief economist at Bankrate.com. (CNBC) See also (The Big Picture blog).

[Commenting on today's four bank failures:] "You’re going to continue to see smaller institutions fail because they have no access to capital and they have too much concentration in residential construction and commercial real estate." -- Paul J. Miller, an analyst at FBR Capital Markets in Arlington, Virginia. (Bloomberg)

"Household leverage has returned to 94% (of GDP) from its peak of 96% in both 2007 and 2008. But consider this: At the peak of the Nasdaq bubble, household leverage was just shy of 70%. There is a very, very long way to go." -- Société Générale economist Albert Edwards (LiveMint)

“We expect an increase in traffic fatalities, increased exposure to terrorist threats in Illinois, an increase in gun and drug trafficking, in addition to the loss of an estimated $12 million in citation revenue for counties across the state,” -- State Police director Jonathon Monken, commenting on the effect of layoffs and retirements amounting to about 600 sworn troopers. (State Journal-Register of Springfield IL)

"It's still a long way to go before Japan pulls out of deflation. The BOJ has said it will patiently maintain very easy monetary policy. They really need to do so for a very long time for the country to escape deflation." -- Takeshi Minami, chief economist at Norinchukin Research Institute. (Reuters)

Supply fears start to hit Treasuries (The Financial Times)

Debt Fears Send Rates Up: Unease at Deficit Hurts Demand for Treasurys; Mortgage Costs on the Rise (The Wall Street Journal)

Bond market fires shot across U.S. bow (CNN)

Rapid Rise in US Budget Deficit Projection -- "the problem is not confined to this year or next, but stretches out at least a decade and represents a historic, multi-trillion-dollar change in the country's fiscal fortunes." (CNBC)

Fed's balance sheet ["a broad gauge of its lending to the financial system"] rises to record in latest week (Reuters)

Ambac risks bankruptcy after reg seizure -- "Terms in Ambac's bonds state that the takeover of a substantial part of Ambac or a subsidiary would constitute a default." (Reuters)

Moody's cuts Ambac debt after regulators step in -- "to 'C' from 'Ca,' its lowest rating above default." (The Associated Press)

ISDA calls Ambac unit reorg. a bankruptcy event (Marketwatch)

ISDA Rules Ambac Triggered Default, 5-Year CDS Soars While Stock Sinks (The Business Insider) (Reuters)

An A.I.G. Lesson From Wisconsin (The New York Times)

Personal Income Drops Across the Country (The Wall Street Journal)

The Potential Time Bomb Hiding In Today's Housing News -- "the FHA may be underestimating the risks that could lead to a government bailout." (NPR blogs) Reassessing FHA Risk (Center for Experimental Social Science)

FHA's Florida fiasco: Nearly 18% of all FHA loans in Miami are delinquent, making it one of the most troubled locales in the nation. (CNN)

Half of U.S. Home Loan Modifications Default Again (Bloomberg)

Obama Loan-Modification Effort ‘Failed Miserably,’ Panel Says (Bloomberg)

[De Kalb GA County] School district budget deficit balloons to $115 million (The Champion)

Mayor Bell: City [of Toledo OH] now facing $25 million deficit (WTOL)

Perrysburg Schools [OH] layoffs eyed to close $3.1M budget deficit (The Toledo Blade)

Unemployment Rate Increases in 27 States in February (Calculated Risk blog)

Thousands [at least 212,000] to lose jobless benefits April 5 (CNN)

The Mother of All Jobless Recoveries (The Atlantic)

One of These Things is Not Like the Others -- "Change in U. S. Employment: Recessions" (Economist's View blog)

[New York City] Hospitals Chief Expects to Cut 3,900 Jobs (The New York Times)

APS [Albuquerque NM Public Schools]: 700 jobs may be cut (KOB)

Amid recession, Memphis becomes America's hunger capital (McClatchy Newspapers)

Newspaper Ads Tumbled to 1963 Levels Last Year (The Columbia Journalism Review)

Greek bond yields must fall faster: High borrowing costs threaten to derail deficit reduction (Marketwatch)

Darling concedes cuts could be tougher than 1980s: [Chancellor of the Exchequer] Alistair Darling has conceded that if Labour is re-elected public spending cuts will be "tougher and deeper" than those implemented by Margaret Thatcher. (The BBC)

Firms fearing double dip recession since Darling's Budget: London's business leaders have become markedly more pessimistic about the threat of a double-dip recession since the Budget, a new survey reveals today. (The London Evening Standard)

Are the Brits headed for the PIGS sty? (Fortune)

Anglo Irish Bank may need $12 bln more state help (Reuters)

Most Japanese Airports in Debt, Face Closure (The Epoch Times)

Japan Growth Prospects Are Worst Among G-7, OECD Says (Bloomberg)

Japan consumer-price data show deflation continues -- [the 12th month in a row] (Marketwatch)

Four [US] banks fail; FDIC pulls back on loss shares (Reuters)

McIntosh Commercial Bank of Carrollton GA had a troubled assets ratio of 884%. (BankTracker)

Key West Bank of Key West FL had a troubled assets ratio of 1150.6%. (BankTracker)

Unity National Bank of Cartersville GA had a troubled assets ratio of 247.8%. (BankTracker)

Desert Hills Bank of Phoenix AZ had a troubled assets ratio of 279%. (BankTracker)

Honeybee die-off continues -- "Not good news; no pollen = no food." (San Francisco Chronicle blogs)

Honeybees Dying: Scientists Wonder Why, and Worry About Food Supply: A Third of America's Food Depends on Plants Pollinated by Bees and Other Insects (ABCNews)

The 4-Year Hunt for the Honey Bee Killer: New Urgency to Solve Mystery As Harsh Winter Further Drops Supply of Insects Crucial to Food Production (CBSNews)

Worst Drought in a Millenium Creates Severe Food Shortages: [China's] Regime pledges five cents per person for relief (The Epoch Times)

Thursday, March 25, 2010

Thursday roundup (03-25-10)

Quotes of the Day:

"This is the largest decline in output ever recorded in a single year." -- The Central Statistics Office of Ireland. (Agence France-Presse)

[Ambac, part of which was seized by regulators today, was near the precipice two years ago; from Jan. 19, 2008:] "T.J. Marta, fixed income strategist with RBC Capital Markets, estimates that roughly $2.5 trillion in outstanding debt is backed by bond insurers like Ambac and MBIA, and credit downgrades are a mortal threat to their business models.

"If the bond insurers fail, that raises the specter of a massive wave of wealth destruction in a global financial system that is flooded with illiquid and opaque derivative securities of which there is little understanding, except that their value is connected to credit ratings on structured finance securities.

"'This is going to be worse than anybody thinks,' says Marta. 'What I heard from Ambac [on Friday] is that they're throwing back the lifeline and saying, 'We're not going to make it.' On a fixed income trading floor, that means the world truly is upside down.'" (The Street.com)

Ambac Subprime Contracts Taken By Wisconsin Regulator -- "Ambac Financial Group Inc. will hand control of subprime mortgage-related contracts to a regulator amid concern the second-largest bond insurer’s collapse would trigger losses for municipal noteholders." (Bloomberg)

State regulators take over part of Ambac's book -- "'The company had become financially hazardous,' Wisconsin Insurance Commissioner Sean Dilweg said" -- Ambac moves $35 bln mortgage liabilities to new unit (Reuters)

Part of Ambac seized to protect muni-bond investors: 'Amputation' will halt claims payments to some policy-holders -- "'It's a de facto default,' said Sean Egan, president of Egan-Jones Ratings" (Marketwatch)

Ambac may seek bankruptcy after regulators step in (The Associated Press) (The Wall Street Journal blogs)

Jim Cramer on Financials (posted Jan. 21, 2008) (Youtube)





Hardball - Chris Matthews- Cramer - Mad Money (Posted Jan. 30, 2008) -- "There are a group of insurance companies that insure all these bad mortgages and Chris, I think they're all about to go belly up... Other than the New York State's superintendent of insurance, because he's worried about muni bond holders, I have not heard a single politician mention the fact that these major insurers, who have insured $450 billion mortgages are ALL about to go under." (Youtube)





Europe agrees IMF-EU rescue for Greece: After weeks of discord, Europe's leaders have agreed to an emergency facility for Greece backed by the International Monetary Fund and bilateral loans from eurozone states. (The Telegraph)

Who Will Default First: Greece or California? (The Wall Street Journal blogs)

Greece is likely to need far more financial aid than seems to be on offer (The Economist)

Greek Debt Threat: EU Impact: Keeping an eye on the situation in Greece, with Philip Manduca, The ECU Group Head of Investment. (CNBC) See also the Zero Hedge blog (ZeroHedge).








U.K. not far behind Portugal: analyst: Credit rating at risk (The Financial Post) (The Daily Mail)

Ten-Year Gilts Drop on Concern U.K. Won’t Meet Deficit Targets (Bloomberg)

Ireland's economy suffered record slump in 2009 (The Associated Press)

Ontario Plans Eight Years of Deficit After Record Gap (Bloomberg)

Dubai World gets $9.5 B bailout (CNN)

[U. S. Interest Rate] Swap Spreads Stay Negative as Investors Focus on Sovereign Risk -- “Sovereign debt worries have replaced the banking crisis as the main worry for investors,” said Moorad Choudhry, an economics professor at London Metropolitan University (Bloomberg)

US Mortgage Delinquencies Reach Almost 14% [in fourth quarter 2009] (Reuters)

Apartment rents cheaper than stays in homeless shelters (USAToday) (AOLNews)

Sisters of Mercy cutting 514 jobs in restructuring (St. Louis Business Journal)

CBS Poll: 62% of the Country Want the Republicans to Fight the Healthcare Bill (The Golden Truth blog)

Is it a recovery yet? (Weekly report, 03-25-10)

According to an analyst quoted here, a recovery would be indicated by initial jobless claims below 500,000.

IT'S A RECOVERY!

"First-time jobless applications declined by 14,000 to 442,000 in the week ended March 20, lower than anticipated, Labor Department figures showed today in Washington. ...

"'The data are going mildly in the right direction, consistent with a very slow improvement in the labor market,' said Anna Piretti, a senior economist at BNP Paribas in New York, who forecast claims to fall to 445,000. At the same time, 'it’s not easing as much as we would have hoped.'" (Bloomberg)

Wednesday, March 24, 2010

Wednesday roundup (03-24-10)

Quotes of the Day:

"A crisis that began over Greece’s borrowing costs is now metamorphosing into a more serious threat to the political and economic order in Europe as a whole." -- Stephen Lewis, chief economist at Monument Securities in London. (The Associated Press)

[In the United States:] "Worsening economic conditions caused the nation to reach a bleak milestone in January: For the first time since The Associated Press began analyzing conditions in more than 3,100 U.S. counties nearly a year ago, the average county was found to be economically stressed." -- The Associated Press (The Associated Press)

"Americans remain downbeat on the housing market. We expect the continuation of poor sales to lead to a resumption of downward price pressure." -- David Semmens, an economist at Standard Chartered Bank in New York. (Bloomberg)

"We continue to hear that funding dedicated for construction projects in the stimulus package has not yet been awarded, resulting in a bottleneck of potential projects that could help jumpstart the economy. That, coupled with a persistently rigid credit market for private sector projects, is a key reason why the design and construction industry continue to suffer at near historic levels in terms of job losses." -- American Institute of Architects chief economist Kermit Baker. (AIA)

"Historically, according to the AIA, there is an 'approximate nine to twelve month lag time between architecture billings and construction spending' on non-residential construction. This suggests further significant declines in CRE [commercial real estate] investment through all of 2010, and probably longer." -- Calculated Risk blog (Calculated Risk blog)

U.S. Is Riskier Than Euro Zone; So Says CDS Market (The Wall Street Journal)

Bad News for America: U.S. CDS Now Wider Than Europe, Treasury Auctions Bomb (Washington's blog)

New-home sales fall to record low (CNN) (Marketwatch) (Calculated Risk blog) (Expected Returns blog) (The Mess That Greenspan Made blog)

Housing market's recovery appears at risk -- "The trend could threaten the broader economy, economists warn." (The Associated Press)

Home Prices ‘Double Dip’ in 12 Cities, Zillow Says (Bloomberg)

Banks and the Battle for the Middle Class: David Muir hears from homeowners struggling to make mortgage payments. (ABCNews)



Social Security to See Payout Exceed Pay-In (The New York Times)

Postal Service moves toward five-day delivery (The Associated Press) (The Washington Post blogs)

Banks to lose billions in student loan revamp: Measure linked to health ‘fix it’ bill would shift lending to U.S. government (The Associated Press)

Frantic EU seeks solution to Greek debt crisis: European[s] try to find solution to Greek debt crisis as euro slides, Portugal downgraded (The Associated Press)

Greek crisis exposes France-Germany rift: There's a sense of urgency ahead of the EU summit in Brussels, as Germany and France frantically negotiate how to overcome the worst crisis in the history of the euro. (The BBC)

Greek debt crisis reveals eurozone faultlines (Agence France-Presse) (Reuters)

Portugal’s Debt Rating Lowered by Fitch on Finances (Bloomberg)

P is for Portugal. And problems. (CNN)

Speaking of Portugal and sovereign risk: a downgrade (FT Alphaville blog)

German Shippping Faces Wave of Financing Problems: As recently as 2008, container ships were transporting record amounts of products across the world's oceans. Now, many German shipping companies are struggling to pay for the vessels they ordered during the boom. Their banks could be in trouble, too. (Der Spiegel)

Manufacturing Areas in U.S. Post Biggest Declines in Population (Bloomberg)

California, in Financial Crisis, Opens Prison Doors (The New York Times)

Another hard year for California economy: report (Reuters)

Shortfall Threatens Illinois Pension System (NPR)

Tenn. to send 853 state layoff notices this week (The Associated Press)

JM Smucker to cut about 700 jobs, revamps supply chain (Reuters)

Preliminary city budget would lay off more than 600 [in Baltimore]: 120 police, 90 fire positions would be cut; more than half of rec centers would close (The Baltimore Sun)

Report finds rise in D.C. poverty to nearly 1 in 5 residents (The Washington Post blogs)

Florida Citrus Groves at Risk From Greening Disease (Bloomberg)

Author Michael Lewis Takes On the Financial Crisis (PBS NewsHour)

Tuesday, March 23, 2010

Tuesday roundup (03-23-10)

Quotes of the Day:

"As investors push Greece, Spain, Portugal and Ireland to deliver on plans to cut budget deficits, the withdrawal of stimulus raises the risk of double-dip recession and even deflation in all or parts of the 16-nation euro area." -- Bloomberg (Bloomberg)

"... developed market governments are insolvent by any reasonable definition ... we haven't had our crisis yet. Given the clear unsustainability of government finances and the explosive path government leverage is on, a government funding crisis is both inevitable and necessary. Dubai and Greece are merely the first claps of thunder in what is going to be a long emergency." -- Dylan Grice, economist on the Global Strategy Team, Société Générale (Société Générale)

"[A] double dip in [housing] prices has already begun, and in the space of just two months, it has more than reversed the increases of the previous year. We first predicted a double dip in house prices at the start of February, but even we didn’t think it would come this soon." -- Paul Dales, the US economist at the Toronto office of Capital Economics. (The Housing Wire)

OECD urges governments to tackle huge debt (Agence France-Presse) Preparing Fiscal Consolidation (OECD)

Six years of fiscal austerity [for US, UK, and other countries], says OECD (FT blogs)

Fox News Poll: 79% Say U.S. Economy Could Collapse (FoxNews)

U.S. Economy: Existing Home Sales Existing-home sales fall for third straight month: 'Second surge' needed or U.S. could be vulnerable to double dip: economist (Marketwatch)

Drop [to lowest level in eight months], Supply Climbs -- "Sales of existing U.S. homes fell in February for a third month, and the number of properties on the market climbed by the most in almost two years, casting a pall over the prospects for a recovery." (Bloomberg)

Debate on the future of Fannie, Freddie heats up: Lawmakers to debate structure of US mortgage market, changes could take years (The Associated Press)

Commercial property catastrophe! Prices, supply, demand drop in Q4 2009. (The Christian Science Monitor blogs)

Next Big Issue? Social Security Pops Up Again (The New York Times)

State tax collections down $67B in ’09 (The Orlando Business Journal)

U.S. states may be the next dominoes to topple: The bond market vigilantes have California in their sights, as well as Michigan, New Jersey and New York (The Globe and Mail of Toronto)

States Sue Over [Health Care] Overhaul That Will Bust State Budgets (Bloomberg)

Villaraigosa warns of bankruptcy if L.A. City Council blocks electricity rate hike (The Los Angeles Times blogs)

14,800 teachers [across New York States] face loss of jobs: Statewide survey maps budget crisis (The Buffalo News)

Bloomberg to City Agencies: Prepare for Worst Case Scenario: 8,500 [New York City] teachers could face the budget ax (NBCNewYork)

Daniel Boone [School Board] faced with reducing $2.2M budget deficit (The Mercury of Pottstown PA)

Risky Business: Pension Funds With Less Than Conservative Asset Allocations (NPR)

Burning Away Cash: Pension Plight In Rhode Island (NPR)

Small business needs a break from banks, regulators (The Fort Worth Business Press)

Inflation? Where? (Mish's Global Economic Trend Analysis blog) Breakfast With Dave March 19, 2010 (Gluskin Sheff)

Germany, France Back IMF Role in Aiding Greece, Official Says (Bloomberg)

Germany sets tough terms for EU help for Greece (Reuters)

Greece wants European solution to debt crisis (Reuters)

Anticipating Eurozone Collapse (Seeking Alpha blog)

State-Run Bank in Athens Won Big With C.D.S.’s -- "Hellenic Post Bank, a lender controlled by the Greek state, bought about 950 million euros worth of credit default swaps, insuring itself against the nation’s sovereign debt, according to documents seen by Kathimerini, a major Greek daily." (The New York Times blogs)

U.S. Government Exposes Its Own Oil Supply And Demand Data To Be Completely Flawed (The Business Insider)

Tipping Point: Near-Term Systemic Implications of a Peak in Global Oil Production - Part 1 - Summary (The Oil Drum) Tipping Point: Near-Term Implications of a Peak in Global Oil Production (The Oil Drum)

Monday, March 22, 2010

Monday roundup (03-22-10)

Quote of the Day:

"Greece is a concern for the entire marketplace. If Greece were to collapse, what happens to Portugal, what happens to Spain, what happens to the U.K.? There are a lot of heavily indebted countries out there that need to raise a lot of money." -- Gary Jenkins, head of credit research at Evolution Securities Ltd. in London. (Bloomberg)

[Commenting on Friday's ruling by the Second Circuit Court of Appeals in New York that the Federal Reserve had to disclose borrowers from the discount window]: "Well, I think the Chairman has said on many occasions that it's not a good idea to be revealing people who are borrowing at the discount window. That can trigger a run and really could be a very contagious thing that goes from bank to bank to bank and then you collapse the whole banking system. So this is a case where -- I'm all for revealing as much information as possible, but this is a case where it could be very dangerous, so I think we oppose that." St. Louis Federal Reserve President James Bullard. (CNBC)

"With the overvalued, overbought conditions of October now compounded by rising yield pressures and overbullish sentiment on a variety of measures (investment advisors are again down to just 21.3% bears), we remain defensively positioned here. While investors looking at the 2007 highs undoubtedly observe a significant amount of apparent 'room to recover' for stocks, it is extremely important to recognize that those 2007 valuations were what one might call 'Bubble Part II', and priced stocks for terribly poor long-term returns. Unless investors wish to repeat the experience, it is worth noting that stocks are already overvalued beyond nearly every pre-bubble norm. Indeed, outside of the bubble years from the late 1990's through 2007, the S&P 500 has never been priced to achieve a poorer long-term return than it is now." -- John P. Hussman, Ph.D. (Hussman Funds)

[IMF's] Lipsky Says Debt Challenges Face Advanced Economies (Bloomberg)

Obama Pays More Than Buffett as U.S. Risks AAA Rating (Bloomberg)

[Bundesbank President Axel] Weber Says German Economy May Have Contracted in First Quarter (Bloomberg)

Greece's spending cuts are making debt crisis worse, says national bank (The Guardian)

Greek economy 'to worsen' in 2010 says central bank: Greece's economy is in a "vicious circle" and will contract more severely than the government says, according to the country's central bank. (The BBC)

Greece accuses Germany of 'squalid game' in debt crisis: Greece has further complicated its chances of an EU rescue package this week, accusing Germany of exploiting the debt crisis to enrich its banks and drive down the euro for global export advantage. (The Telegraph)

Three Ways The Greek Crisis Could Harm The U.S. Economy (NPR blogs)

Report [from the New York State Council of School Superintendents and the New York State School Boards Association]: More than 14,800 teaching jobs could be cut across state (The Utica Observer Dispatch) (The Times Union of Albany blogs)

Teachers face [up to 5,000] lay-offs, second jobs: School districts across Indiana are laying-off thousands of teachers in the wake of state education funding cuts. Meanwhile, many Indiana teachers are getting second jobs. (Fox59)

Sallie Mae May Cut 2,500 Jobs as Result of Health-Care Bill (Bloomberg)

Where will all the new jobs come from? (Credit Writedowns blog)

MIT’s Johnson Says Too-Big-to-Fail Banks Will Spark New Crisis (Bloomberg)

Bank Failures Update for 2010 (CF Economics blog)

The Pressure on Malls: More Store Closings (Calculated Risk blog)

More Ugly Housing Data -- "This is asset price deflation (and a bubble collapse dynamic) in action and it ain't even close to over yet when it comes to housing." (Safe Haven)

Option ARMs pose threat to housing market: Easy terms on the adjustable-rate mortgages, popular during the housing boom, are expiring. Higher bills could lead to more foreclosures, industry experts warn. (The Los Angeles Times)

Loan Spread Points to Limits on U.S. Housing: Chart of the Day -- it 'absolutely means it’s more difficult for people who own those more expensive homes to sell them and less desirable for homebuilders to build those types of homes,' said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts." (Bloomberg)

Renters' advantage: High unemployment, a glut of units and incentives for homebuyers push vacancies up and rents down (The News Tribune of Tacoma WA)

States and Cities Gamble and Lose (Expected Returns blog)

Public Pension Deficits Are Worse Than You Think: How can fund managers assume an 8% rate of return? (The Wall Street Journal)

Pension Woes May Deepen Financial Crisis For States (NPR)

Gambling To Fix Pensions Can Lead To A Bigger Bind (NPR)

Pennsylvania Pensions: From Surplus To A Deep Hole (NPR)

California Pension Costs Fuel Growing Anxiety (NPR)

Has The State Of California Become The Epicenter Of The Economic Collapse Of America? (The Economic Collapse Blog)

One in six without safe drinking water worldwide (Radio France International)

UN World Water Day: ‘poor pay the price for unprecedented levels of water contamination’ (The Asian Tribune)

Worst drought in a century wipes out harvests in southwestern China (AsiaNews.it)

Beijing sandstorm: we are experiencing environmental meltdown (The Telegraph blogs)

Oil reserves 'exaggerated by one third': The world's oil reserves have been exaggerated by up to a third, according to Sir David King, the Government's former chief scientist, who has warned of shortages and price spikes within years. -- "Sir David said he was 'very concerned' that Western governments were not taking the concept of 'peak oil' – where demand outstrips production – seriously enough, while China is throwing all its efforts into grabbing as many energy resources as possible." (The Telegraph)

Institutional investors start to worry about challenges facing oil companies (The Australian)

Energy minister will hold summit to calm rising fears over peak oil: Lord Hunt calls UK industrialists together to discuss government response to any early onset of decline in global oil production (The Observer)

Monkey rules (The Star of Malaysia)

THE Most Important Chart of the CENTURY (Nathan's Economic Edge blog)