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Archive for February, 2010
PrintThe FDIC seized 2 more banks, raising the totaled number of failed U.S banks in 2010 to 22. FDIC Chairman Sheila Bair has said in the current banking crisis, failures will peak in 2010.
According to the FDIC bank failures from 2009 to 2013 is expected to cost $100 billion. Small(regional) banks are failing due to the loan losses from the credit boom. Many losses are result of the collapsed commercial real estate projects.
Brief Rundown;
Bank Assets Deposits
Carson River Community Bank (Nevada) $51.1 million $50 million
Rainier Pacific Bank (Washington) $717.8 million $446.2 million
PrintThe Department of Labor reports unemployment (initial claims) statistics as follows.
” In the week ending Feb. 20, the advance figure for seasonally adjusted initial claims was 496,000, an increase of 22,000 from the previous week’s revised figure of 474,000. The 4-week moving average was 473,750, an increase of 6,000 from the previous week’s revised average of 467,750.”
The 4 week moving averaging of unemployment claims is at its lowest level since September 2008. However, that figure is still high and continued job losses may still be on the horizon.
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PrintHere is an interesting graphic based on data from Linkedin, it shows where collapsed bank employees went during the economic crisis.
From Linkedin:
One hypothesis is that many of the employees left the financial industry. According to the LinkedIn data set, that just isn’t true. There are a handful of people that did transition to other industries and start new careers, but most stayed in the financial space. To be specific, other than two acquiring companies (Bank of America acquired Merrill Lynch and Nomura acquired Lehman Brothers’ franchise in the Asia Pacific region), Barclays was by far the biggest beneficiary, scooping up 10% of the laid off talent, followed by Credit Suisse at 1.5% and Citigroup at 1.1 %.
PrintNew home sales in the U.S fell to a record low in January.
The Census Bureau report:
Sales of new single-family houses in January 2010 were at a seasonally adjusted annual rate of 309,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.2 percent (±14.0%)* below the revised December rate of 348,000 and is 6.1 percent (±15.1%)* below the January 2009 estimate of 329,000.
Homebuilders are facing tough competition given that the market is flooded with foreclosed homes. To add to there problems unemployment remains high at 9.7% and companies are slow to hire.
New home sales break down by regions:
Northeast: declined 35%
West: declined 12%
South: declined 9.5%
Midwest: rose 2.1%
PrintHere is an interesting chart from Visual Economics showing GDP vs Expenditures. However, inflation doesn’t seem to be represented in this data.
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PrintThe FDIC seized 4 more banks, raising the totaled number of failed U.S banks in 2010 to 20. FDIC Chairman Sheila Bair has said in the current banking crisis, failures will peak in 2010.
According to the FDIC bank failures from 2009 to 2013 is expected to cost $100 billion. Small(regional) banks are failing due to the loan losses from the credit boom. Many losses are result of the collapsed commercial real estate projects.
Brief Rundown;
Bank Assets Deposits
Marco Community Bank (Florida) $119.6 million $117.1 million
La Coste National Bank (Texas) $53.9 million $49.3 million
La Jolla Bank (California) $3.6 billion $2.8 billion
George Washington Savings Bank (Illinois) $412.8 million $397.0 million
PrintThe Department of Labor reports unemployment (initial claims) statistics as follows.
” In the week ending Feb. 13, the advance figure for seasonally adjusted initial claims was 473,000, an increase of 31,000 from the previous week’s revised figure of 442,000. The 4-week moving average was 467,500, a decrease of 1,500 from the previous week’s revised average of 469,000.”
The 4 week moving averaging of unemployment claims is at its lowest level since September 2008. However, that figure is still high and continued job losses may still be on the horizon.
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PrintWarren Buffett makes portfolio changes!
Here is a brief rundown of purchases, sells, and holdings:
- ConocoPhillips Co.: sold 20 million shares, holds 37.7 million shares
- Exxon Mobil Corp.: sold 808,200 shares, holds 421,800 shares
- CarMax Inc.: sold 1 million shares
- Ingersoll-Rand PLC: sold 2 million shares, holds 5.63 million shares
- Norfolk Southern Corp.: sold all shares
- Union Pacific Corp: sold all shares
- Burlington Northern Santa Fe Corp.: purchased 76.8 million shares
- Iron Mountain Inc.: doubled holdings to 7 million shares
- Republic Services Inc.: purchased 4.7 million shares, holds 8.3 million shares
- Wal-Mart: purchased 1 million shares, holds 37.8 million shares
- Procter & Gamble Co.: sold 8.8 million shares, holds 87.5 million shares
- Sun Trust Banks Inc.: sold 680,000 shares, holds 1.54 million shares
- Wells Fargo & Co.: purchased 6.7 million shares, holds 320.1 million shares
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Census Bureau press release: New Residential Construction
HOUSING STARTS
Privately-owned housing starts in January were at a seasonally adjusted annual rate of 591,000. This is 2.8 percent (±11.5%)* above the revised December estimate of 575,000 and is 21.1 percent (±12.3%) above the January 2009 rate of 488,000.
Single-family housing starts in January were at a rate of 484,000; this is 1.5 percent (±11.3%)* above the revised December figure of 477,000. The January rate for units in buildings with five units or more was 100,000.
HOUSING COMPLETIONS
Privately-owned housing completions in January were at a seasonally adjusted annual rate of 659,000. This is 12.4 percent (±7.8%) below the revised December estimate of 752,000 and is 15.3 percent (±10.5%) below the January 2009 rate of 778,000.
Single-family housing completions in January were at a rate of 427,000; this is 12.9 percent (±7.1%) below the revised December rate of 490,000. The January rate for units in buildings with five units or more was 215,000.
The upside; the low level of housing starts is a result of the flooded housing inventory which is currently being absorbed. Why is that good news? Well the housing market can’t recover without decreasing the inventory.
The downside; the housing market will recover slower than the overall economy, as result of a high unemployment rate and uncertain job security.
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PrintPress release from the Federal Reserve: Industrial Production and Capacity Utilization
Industrial production increased 0.9 percent in January following a gain of 0.7 percent in December. Manufacturing production rose 1.0 percent in January, with increases for most of its major components, while the indexes for both utilities and mining advanced 0.7 percent. At 101.1 percent of its 2002 average, output in January was 0.9 percent above its year-earlier level. The capacity utilization rate for total industry rose 0.7 percentage point to 72.6 percent, a rate 8.0 percentage points below its average from 1972 to 2009.
Note: Since December of 2008 this is the highest level for industrial production. However, still far below pre-recession levels.