Archive for October, 2009

“The Shit Hit the Fan”

This was the busiest Friday for the FDIC in the last 9 years.

There were 9 banks in 4 states that were seized by the FDIC on Friday. This brought the number of failed banks to 115 through October 30th. By comparison only 18 were seized through October in 2008. There were only 8 failures the rest of that year, all in California, Georgia, and Texas.

Texas lost 3 more banks this week as did California, its 14th failure of 2009. Illinois lost 2 more bringing it within one bank foreclosure of Georgia, which has had 20 banks fail in 2009. All 9 banks were units of FBOP Corp.

The three California banks were each big takeovers: Pacific National Bank of San Francisco had assets of $2.3 billion; San Diego National Bank of San Diego’s assets were $3.6 billion; and the largest, California National Bank in Los Angeles, $7.8 billion, Park National Bank of Chicago, had assets around $4.7 billion.

The FBOP’s collapse was related to mortgage securities purchased from Fannie Mae and Freddie Mac as reported by E. Scott Reckard in the Los Angeles Times, “California National Bank fails, is seized by FDIC.”

The most distressing development was the assumption of all three of FBOP’s units by U.S. Bancorp. For some strange reason the FDIC views U.S. Bancorp as a deserving recipient of failed banks. Not only did they assume the deposits of the three California failed banks but were handed the deposits and assets of all nine banks seized on Friday. The total assets of all 9 banks was a cool $19.4 billion.

This calls into question the integrity of the FDIC. Read the rest of this entry »

Tags: , , , , , ,
Posted in Banking, Economy, Uncategorized | Comments Off

“Banking 101”

Actually 106; the number of banks that have failed in 2009.

For three weeks the FDIC relished the calm; a much deserved respite from the frenetic activity since September 2008. they seized only four banks in the precious 3 weeks; three (3) on October 2nd and, just 1 on October 16th. The calm before the storm.

Last Friday the storm raged and the number of failed banks blew past 100 this year. Seven (7) banks failed in 5 states on Friday.

Florida lost 3 banks, Georgia and Illinois added 1 each bringing their total failures to 20 and 17 respectively. California lost another bank, in Central California, San Joaquin Bank, on October 16th. That’s the 11th failure in California this year. Florida lost 3 banks on Friday, two in Naples, the third in Bradenton, and has now lost  9 since January 1st.

Minnesota and Wisconsin each had failures on Friday, and they both lost a bank on October 2nd. Minnesota had only 3 failures prior to these two losses. Wisconsin had not had a bank failure since May 9th of 2003.

Of note during the calm: was the selection of a winning bidder of the 8 bidding to purchase the assets of Corus Bank which was taken over on September 11th. On the 11th all deposits were transferred to MB Financial Bank but the sale of assets by the FDIC did not occur until October 6th. Northwest Investments LLC purchased $554 million, 40%of Corus’s assets, while the FDIC’s stake of $831 million represents 60% of the assets.

As we look to this Friday and the rest of the year, the number of failures for the remainder of the year is a big question mark.

This Friday will bring us more answers. Or will it create even more uncertainty?

Stay tuned!

Tags: , , , ,
Posted in FDIC Foreclosures | Comments Off

“More Shipping Hues”

As if what I wrote last week in “The Shipping Blues” wasn’t bad enough as an indicator of a slow global recovery, there is even more telling news.

There is startling information about Imports into the Ports of Los Angeles and Long Beach, the nation’s biggest port complex, which confirm my suspicions about the potential for a recovery. An article in the LA Times by Ronald D. White on Saturday, October 17, “Imports dive at the ports of Los Angeles and Long Beach,’ describes the worst slowdown at the two ports in 9 years!

I picked this information up from the Expected Returns Blog, “Imports Collapse in California.” You can read his summarized version of Ron’s article there. He also links to the LA Times piece.

This clearly adds concern for the holiday season, given that September is the busiest month of the year at the fifth largest shipping complex in the world. With the combination of the holidays and the rebuilding of inventories that is supposed to be occurring, the ports should be busier than last year. It is an obvious sign that the consumer has little appetite for consumption.

My concern is that we should be bracing for another decline globally, based on all the economic evidence that things will not be getting any better soon. I addressed these concerns in “The Shipping Blues.” Instead, we have analysts and economists, CEO’s, financial pundits, and the administration giving us partial information and telling everyone that everything is positive while expressing only muted concerns.

The Hues are changing in the economy. Right now changes in hues are better than changes in colors. It is definitely better than where we were headed just one year ago. But it may not yet be over.

It is abundantly important to protect yourselves in case the economy does not recover as fast as everyone hopes. Remain vigilant and do not become complacent.

Tags: , ,
Posted in Economy, Shipping | Comments Off

“The Shipping Blues”

U.S. Markets continue to flirt with 10,000 and 1,100, shrugging off the fundamentals.

Trader’s are looking to the future; to a global improvement that will justify the unrealistic rises in the indexes. But what happens if the future doesn’t exist? A vaporous dream of hope that disappears leaving everyone empty?

Third quarter earnings are a pivotal indicator and the hopes for a holiday season, better than last year, is almost palpable on the floor of the exchanges.

Many of my articles have been cynical of the perceived recovery, the health of banks, and the rise in the stock markets. Rather than cynicism I like to view it as realism. A common sense look at what is really happening.

With many indicators moving at hyper-speed it is increasingly difficult to keep up with all of the complex elements of the economy and what affect each will have on consumers, businesses, investors, policy, and the markets. Today we’re faced with rapidly changing information. As a result I spend too much time reading, digging, watching, analyzing, evaluating, and writing.

But everything I need to know for The Shipping Blues is found on the deep blue ocean, the hard steel rails, and endless ribbons of asphalt and cement stretching across terra firma.

The best indicator of the future economy is conceivably shipping. And right now many shipping companies have “The Shipping Blues.”

What are The Shipping Blues? Read the rest of this entry »

Tags: , , , , , , ,
Posted in Economy, Markets, Predictions, Shipping | Comments Off

“A Jobless Recovery?” Not This Time!

September’s jobs number was a big disappointment for those that are hoping for positive job creation by the end of this year. The job losses for September slipped back with 263,000 non-farm payroll jobs lost after a better than expected smaller decline in August.

The August number was revised with 15,000 fewer job losses to 201,000, from previously reported 216,000. But July was revised upward adding 28,000 more lost jobs bringing the total to 301,000. for a total of 13,000 more job losses for those two months.

Much has been said about the economy already recovering and the possibility that this, like the last recession, will be a jobless recovery.

Not this time!

Past recessions were not confronted with the problems that exist in this one. The confluence of personal and corporate losses exceed those of the past three recessions combined. Though the downward economic spiral has been slowed, the underlying causes of the financial collapse still exist and are troublesome for any healthy recovery.

Unemployment increased to 9.8% and, as many have stated, is headed for double digits. The highest level of those unemployed during the most recent recessions was approximately 6%.

In previous recessions the job losses were mostly centered around a few industries. But during this recession there has been a widespread decline in all areas of employment: labor, manufacturing, and service. As a result there are few, if any, sectors to help pull us out of this economic quagmire.

What will spur a jobless recovery? Read the rest of this entry »

Tags: , , , , , , ,
Posted in Economy, Jobs, Predictions, Uncategorized | 2 Comments »