Sunday, September 26, 2010

Bank Failure Friday: FDIC Closes 2 Banks *2010 YTD Total Now 127*

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FDIC Logo


Bank Failure Friday: FDIC Closes 2 Banks

The 2010 USA bank failures increased to 127 with the closure of 2 banks listed below. Total assets of the closed banks were $437,400,000 ($437.4 million), based on the June 30 call reports (regulatory financial statements). Both banks were merged via purchase and assumption agreements into other banks.

#126 North County Bank, Arlington, WA (Total assets $288.8M, merged into Whidbey Island Bank, Coupeville, WA)

#127 Haven Trust Bank Florida, Ponte Vedra Beach, FL (Total assets $148.6M, merged into First Southern Bank, Boca Raton, FL)

The next FDIC bank closings, if any, will be most likely be announced on Friday, October 1.


Related Articles and Links
FDIC (FDIC.gov)
*****Failed Bank Information*****
Information for North County Bank, Arlington, WA (FDIC)
Information for Haven Trust Bank Florida, Ponte Vedra Beach, FL (FDIC)


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Tuesday, September 21, 2010

Federal Reserve: Pace of Economic Recovery Likely to be Modest in Near Term (Review)

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Federal Reserve Board Building in Washington, D.C.


Federal Reserve: Pace of Economic Recovery Likely to be Modest in Near Term

Overall USA Economy The Federal Open Market Committee issued a statement on Tuesday, September 21, after a one day meeting on monetary policy (at the bottom of this page). Overall the FOMC stated, "the pace of recovery in output and employment has slowed in recent months" and "The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term."

"Modest" The Federal Reserve continues with the wording and theme of "modest" and "moderate" regarding economic activity, recovery, and growth. As always, the FOMC statement is carefully worded.

Zero Interest Rate Environment The FOMC continues to "maintain the target range for the federal funds rate at 0 to 1/4 percent" and expects "exceptionally low levels of the federal funds rate for an extended period."

Quantitative Easing There is some question as to if, and when, the Federal Reserve might intervene again with outright quantitative easing, or QE2. The Federal Reserve had previously utilized quantitative easing during the depths of the Great Recession - and those amounts are still on the Fed balance sheet. The FOMC stated, "The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate." Previously the FOMC statement from the August 10 meeting was, "The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability." The September 21 statement is viewed as stronger for quantitative easing by the end of 2010 than the August 10 statement.

Indirect Quantitative Easing In the previous  August 10 statement, the FOMC began an indirect form of quantitative easing by, "reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature." This was quantitative easing without increasing the Fed's balance sheet. The next step would be to an outright increase of the Fed's balance sheet by purchasing U.S. Treasury securities.


Related Articles and Links
>>>>>Recent Posts by Financial Controls<<<<
Fed Beige Book: USA Economic Growth at Modest Pace (Review)
Fed Chair Bernanke: Pace of Economic Recovery Has Slowed Somewhat (Review) Financial Controls
Fed Chair Bernanke: Moderate Recovery, Outlook "Unusually Uncertain" (Review) Financial Controls
FOMC Lowers USA 2010 GDP Projection (Review) Financial Controls
Explained: Quantitative Easing MIT
FOMC Statement; September 21, 2010 FRB


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* * * * *


Federal Open Market Committee Statement


Federal Open Market Committee
Release Date: September 21, 2010
For immediate release

Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term.

Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.

The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh.

Voting against the policy was Thomas M. Hoenig, who judged that the economy continues to recover at a moderate pace. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and will lead to future imbalances that undermine stable long-run growth. In addition, given economic and financial conditions, Mr. Hoenig did not believe that continuing to reinvest principal payments from its securities holdings was required to support the Committee’s policy objectives.


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Friday, September 17, 2010

Bank Failure Friday: FDIC Closes 6 Banks *YTD total now 125*

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FDIC Seal and Building


Bank Failure Friday: FDIC Closes 6 Banks

The 2010 USA bank failures increased to 125 with the closure of 6 banks with total assets of $1,343,800 ($1.3438 billion). All were merged with purchase and assumption agreements into other  banks.

#120 Maritime Savings Bank, West Allis, WI (Total assets $350.5M, merged into North Shore Bank, FSB, Brookfield, WI)

#121 Bramble Savings Bank, Milford, OH (Total assets $47.5M, merged into Foundation Bank, Cincinnati, OH)

#122 The Peoples Bank, Winder, GA (Total assets $447.2M, merged into Community & Southern Bank, Carrollton, GA)

#123 First Commerce Community Bank, Douglasville, GA (Total assets $248.2M, merged into Community & Southern Bank, Carrollton, GA)

#124 Bank of Ellijay, Ellijay, GA (Total assets $168.8M, merged into Community & Southern Bank, Carrollton, GA)

#125 ISN Bank, Cherry Hill, NJ (Total assets $81.6M, merged into New Century Bank dba Customers Bank, Phoenixville, PA)

The next FDIC bank closings, if any, will be mostly likely be announced on Friday, September 24.


Related Articles and Links
FDIC (FDIC.gov)
*Failed Bank Information*
Information for Maritime Savings Bank, West Allis, WI (FDIC)
Information for Bramble Savings Bank, Milford, OH (FDIC)
Information for The Peoples Bank, Winder, GA (FDIC)
Information for First Commerce Community Bank, Douglasville, GA (FDIC)
Information for Bank of Ellijay, Ellijay, GA (FDIC)
Information for ISN Bank, Cherry Hill, NJ (FDIC)


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Sunday, September 12, 2010

Global Sovereign Risk: California in Top 10 Riskiest Debt

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Sovereign Risk


Global Sovereign Risk: World's Riskiest Debt

The latest CMA Sovereign Risk Monitor update, as of September 10, 2010, has the following 10 as the highest risk of default. The USA State of California has entered the list at #10, knocking Romania off the list. Ireland moved up from #8 to #6. The States of California and Illinois have been on the list previously.

September 10, 2010
1 Venezuela
2 Greece
3 Argentina
4 Pakistan
5 Ukraine
6 Ireland
7 Dubai/Emirate of
8 Iraq
9 Portugal
10 California/State of

September 3, 2010
1 Venezuela
2 Greece
3 Argentina
4 Pakistan
5 Ukraine
6 Dubai/Emirate of
7 Iraq
8 Ireland
9 Romania
10 Portugal

June 30, 2010, CMA "Global Sovereign Credit Risk Report: 2nd Quarter 2010"
1 Venezuela
2 Greece
3 Argentina
4 Pakistan
5 Ukraine
6 Dubai
7 Iraq
8 Romania
9 Latvia
10 Bulgaria

CMA measures global sovereign risk by, "The CMA Sovereign Risk Monitor identifies and ranks the world’s most volatile sovereign debt issuers according to percentage changes in their 5 year CDS. CDS values are calculated by CMA’s market leading CDS price verification service, DataVision."


Links
CMA


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Saturday, September 11, 2010

Bank Failure Friday: FDIC Closes Horizon Bank, Bradenton, FL

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Horizon Bank


Bank Failure Friday: FDIC Closes Horizon Bank, Bradenton, FL

The 2010 USA bank failures increased to 119 with the closure of Horizon Bank in Florida. The FDIC Failed Bank Information stated, "On Friday, September 10, 2010, Horizon Bank, Bradenton, FL was closed by the Florida Office of Financial Regulation and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed. All deposit accounts, excluding brokered deposits, have been transferred to Bank of the Ozarks, Little Rock, AR and will be available immediately. The former Horizon Bank locations will reopen as branches of Bank of the Ozarks during regular business hours."

The next FDIC bank closings, if any, will be mostly likely be announced on Friday, September 17.


Related Articles and Links
Failed Bank Information: Information for Horizon Bank, Bradenton, FL FDIC
Bank of the Ozarks, Little Rock, Arkansas, Assumes All of the Deposits of Horizon Bank, Bradenton, Florida FDIC
FDIC (FDIC.gov)


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Wednesday, September 8, 2010

Fed Beige Book: USA Economic Growth at Modest Pace (Review) *But widespread signs of deceleration*

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Marriner S. Eccles Federal Reserve Board Building in Washington


Fed Beige Book: USA Economic Growth at a Modest Pace


Summary
The Federal Reserve Board issued the much scrutinized Beige Book today, September 8, 2010. Overall, "continued growth in national economic activity during the reporting period of mid-July through the end of August, but with widespread signs of a deceleration compared with preceding periods. Economic growth at a modest pace was the most common characterization of overall conditions..."

The Federal Reserve continues with the wording and theme of "modest" and "moderate" regarding economic activity, recovery, and growth. As always, the Fed Beige Book, officially titled the Summary of Commentary on Current Economic Conditions by Federal Reserve District, is carefully worded. 

Regarding the USA Financial System
"Reports from financial institutions pointed to generally stable or slightly lower loan demand and noted some modest improvements in credit quality. Most Districts reported little or no change from existing low levels of commercial and industrial lending... Consumer lending remained sluggish in general... Lending standards were largely unchanged."

Regarding Jobs Nationwide
"More generally, however, the reports suggested ample supply of qualified applicants for open positions."

Economic Conditions Nationwide by Category Since the Prior July 28, 2010 Report:
Consumer Spending mixed but suggested a slight increase on balance
Travel and Tourism activity picked up relative to seasonal norms
Business Spending activity was largely stable or up slightly
Nonfinancial Services activity was largely stable or up slightly
Manufacturing activity pointed to further expansion, pace of growth appeared to be slower
Transportation activity
Residential Real Estate: home sales slowed further
Commercial Real Estate: demand for commercial, industrial, retail space generally remained depressed
Real Estate Construction slowdown in activity
Banking and Finance generally stable or slightly lower loan demand
Agriculture and Natural Resources continued gains in demand and sales
Employment, Wages, and Prices: upward price and wage pressures remained limited

Economic Activity and Conditions By Federal Reserve District Since the Prior July 28, 2010 Report
Boston has recent business developments that are positive on average
New York economy showed signs of decelerating, on balance
Philadelphia business conditions have been mixed
Cleveland economic activity showed a slight improvement
Richmond showed signs of slowing or contracting economic activity, became more prevalent
Atlanta indicated that the pace of economic activity continued to slow
Chicago pace of economic activity moderated
St. Louis economy has grown modestly
Minneapolis economy grew modestly
Kansas City growth was modest
Dallas economy expanded modestly
San Francisco economic activity appeared to expand modestly

Conclusion
This September 8 Beige Book, by district economic activity, is rather mixed. Economic activity in 5 of the 12 districts was mixed or slowing. The remaining 7 districts reported basically modest improvement of economic activity and conditions. The wording is cautiously optimistic. Overall, there is no robust growth or strong recovery stated or implied. Bank lending is flat or contracting. Employment overall is not addressed, except to note an "ample supply of qualified applicants for open positions."

Related Articles and Links
Beige Book FRB
Fed Chair Bernanke: Pace of Economic Recovery Has Slowed Somewhat (Review) Financial Controls
Fed Chair Bernanke: Moderate Recovery, Outlook "Unusually Uncertain" (Review) Financial Controls
FOMC Lowers USA 2010 GDP Projection (Review) Financial Controls


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Saturday, September 4, 2010

Global Sovereign Risk: Top 10 World's Riskiest Debtor Nations

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Sovereign Risk


Global Sovereign Risk: World's Riskiest Debt

The latest CMA Sovereign Risk Monitor update, as of September 30, 2010, has the following 10 nations as the highest risk of default:
1 Venezuela
2 Greece
3 Argentina
4 Pakistan
5 Ukraine
6 Dubai/Emirate of
7 Iraq
8 Ireland
9 Romania
10 Portugal

At June 30, 2010, the CMA "Global Sovereign Credit Risk Report: 2nd Quarter 2010" listed the following ten nations has highest risk of default:
1 Venezuela
2 Greece
3 Argentina
4 Pakistan
5 Ukraine
6 Dubai
7 Iraq
8 Romania
9 Latvia
10 Bulgaria

Changes from June 30 to September 3:
Ireland has entered the Top 10 as #8
Romania has dropped to #9 from #8
Portugal has entered the Top 10 as #10
Latvia has dropped out of the Top 10
Bulgaria has dropped out of the Top 10

CMA measures global sovereign risk by, "The CMA Sovereign Risk Monitor identifies and ranks the world’s most volatile sovereign debt issuers according to percentage changes in their 5 year CDS. CDS values are calculated by CMA’s market leading CDS price verification service, DataVision."


Links
CMA


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Bank Failure Friday: No FDIC Closures! *FDIC takes Labor Day Weekend off*

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FDIC Logo


Bank Failure Friday: No FDIC Closures!

The 2010 USA bank failures continue at 118 with no closings on Friday, September 3. Apparently the FDIC took Labor Day Weekend off. They've been busy and it would ruin some bankers' holiday if they were proactive over this weekend. Closings on Friday, August 20, the latest 8 seizures, were:

Sonoma Valley Bank, Sonoma, CA
Los Padres Bank, Solvang, CA
Butte Community Bank, Chico, CA
Pacific State Bank, Stockton, CA
ShoreBank, Chicago, IL
Imperial Savings & Loan Association, Martinsville , VA
Independent National Bank, Ocala, FL
Community National Bank of Bartow, Bartow, FL

The next FDIC bank closings, if any, will be mostly likely be announced on Friday, September 10.

Links
FDIC (FDIC.gov)


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