U.S. futures are pointing to a lower open after warnings yesterday, from Ben Bernanke that the economy is “not out of the woods” and Kansas City Fed President Thomas Hoenig about the dangers of low interest rates, spooked investors and spilled over into the morning’s trading. Traders also worried about the health of the Greek economy and its debt problems.
· In the U.S., initial jobless claims came in at 460,000, higher than consensus expectations of 435,000 and up from last week’s upwardly revised 442,000. Continuing claims came in lower than expected with a reading of 4,550K
http://www.accesstradingmgmt.com/index.htm
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Friday, April 9, 2010
Saturday, October 17, 2009
U.S. bank failure tally hits 99 for 2009
WASHINGTON (Reuters) - One more U.S. bank was shuttered on Friday, as the tally of failures so far this year inched closer to 100.
The pace of bank failures has picked up sharply this year as the industry continues to work through bad loans that were made during the credit boom.
On Friday regulators closed San Joaquin Bank of Bakersfield, California. It was the 99th U.S. bank failure of 2009.
The Federal Deposit Insurance Corp, which was named receiver, said San Joaquin had $775 million in assets and $631 million in deposits.
Citizens Business Bank of Ontario, Calif., agreed to assume all deposits of San Joaquin, whose five branches will reopen on Monday as branches of Citizens Business Bank.
The failure is expected to cost the FDIC's insurance fund a total of $103 million.
U.S. bank failures have not reached the 100 mark since 1992 during the savings and loan crisis when 181 institutions were closed. In 1989, during the height of the savings and loan crisis, 534 banks failed.
Bank failures have drained the fund's balance, which turned negative at the end of the third quarter.
The FDIC, which insures accounts up to $250,000, has proposed a plan to boost its liquidity by having banks prepay three years of regular assessments.
The agency is expecting bank failures to cost the insurance fund about $100 billion from 2009-2013, and said failures will remain elevated this year and next.
The pace of bank failures is expected to remain rapid as banks' woes migrate from deteriorating subprime loans to commercial real estate loans.
The size of the failures, however, has dramatically decreased from last year, when panic in the financial markets caused many firms to topple or receive government bailouts.
"These are like aftershocks compared to the earthquakes we experienced in 2008," said Andrew Kuritzkes, a partner at consulting firm Oliver Wyman.
The largest bank failure of the current crisis was Washington Mutual, which was closed in September 2008, and had assets of $307 billion.
Other large banks, such as Wachovia, were sold when they ran into severe distress, and other financial firms received massive taxpayer bailouts, such as American International Group, which received government commitments of up to $182.5 billion.
COMMERCIAL LOANS LOOMING
Bank regulators sounded the alarm this week about the commercial real estate (CRE) sector, telling a Senate banking subcommittee that it represents the "greatest challenge" facing banks.
Officials are close to finalizing guidance that would encourage banks to recognize potential losses in their commercial real estate portfolios and not simply renew troubled loans to delay loss recognition.
"Prices for both existing commercial properties and for land... have declined sharply in the first half of this year, suggesting that banks are vulnerable to significant further deterioration in their CRE loans," U.S. Federal Reserve Board Governor Daniel Tarullo told the Senate panel on Wednesday.
As of June, commercial real estate loans totaled more than $1 trillion, or 14.2 percent of all loans and leases in the banking industry, FDIC Chairman Sheila Bair said at the same hearing.
She said that area will increasingly be a driver for bank failures during the remainder of this year and 2010.
Petrasic said it is largely community banks, not national banks, that have significant commercial real estate exposures that will continue to spiral downward in value.
"It will absolutely be the most critical factor going forward," he said.
(Reporting by Karey Wutkowski and Ayesha Rascoe)
The pace of bank failures has picked up sharply this year as the industry continues to work through bad loans that were made during the credit boom.
On Friday regulators closed San Joaquin Bank of Bakersfield, California. It was the 99th U.S. bank failure of 2009.
The Federal Deposit Insurance Corp, which was named receiver, said San Joaquin had $775 million in assets and $631 million in deposits.
Citizens Business Bank of Ontario, Calif., agreed to assume all deposits of San Joaquin, whose five branches will reopen on Monday as branches of Citizens Business Bank.
The failure is expected to cost the FDIC's insurance fund a total of $103 million.
U.S. bank failures have not reached the 100 mark since 1992 during the savings and loan crisis when 181 institutions were closed. In 1989, during the height of the savings and loan crisis, 534 banks failed.
Bank failures have drained the fund's balance, which turned negative at the end of the third quarter.
The FDIC, which insures accounts up to $250,000, has proposed a plan to boost its liquidity by having banks prepay three years of regular assessments.
The agency is expecting bank failures to cost the insurance fund about $100 billion from 2009-2013, and said failures will remain elevated this year and next.
The pace of bank failures is expected to remain rapid as banks' woes migrate from deteriorating subprime loans to commercial real estate loans.
The size of the failures, however, has dramatically decreased from last year, when panic in the financial markets caused many firms to topple or receive government bailouts.
"These are like aftershocks compared to the earthquakes we experienced in 2008," said Andrew Kuritzkes, a partner at consulting firm Oliver Wyman.
The largest bank failure of the current crisis was Washington Mutual, which was closed in September 2008, and had assets of $307 billion.
Other large banks, such as Wachovia, were sold when they ran into severe distress, and other financial firms received massive taxpayer bailouts, such as American International Group, which received government commitments of up to $182.5 billion.
COMMERCIAL LOANS LOOMING
Bank regulators sounded the alarm this week about the commercial real estate (CRE) sector, telling a Senate banking subcommittee that it represents the "greatest challenge" facing banks.
Officials are close to finalizing guidance that would encourage banks to recognize potential losses in their commercial real estate portfolios and not simply renew troubled loans to delay loss recognition.
"Prices for both existing commercial properties and for land... have declined sharply in the first half of this year, suggesting that banks are vulnerable to significant further deterioration in their CRE loans," U.S. Federal Reserve Board Governor Daniel Tarullo told the Senate panel on Wednesday.
As of June, commercial real estate loans totaled more than $1 trillion, or 14.2 percent of all loans and leases in the banking industry, FDIC Chairman Sheila Bair said at the same hearing.
She said that area will increasingly be a driver for bank failures during the remainder of this year and 2010.
Petrasic said it is largely community banks, not national banks, that have significant commercial real estate exposures that will continue to spiral downward in value.
"It will absolutely be the most critical factor going forward," he said.
(Reporting by Karey Wutkowski and Ayesha Rascoe)
Sunday, October 11, 2009
FDIC In the RED - 98 Failures this year
Three bank failures on Friday brought the total number of FDIC-insured institutions that have failed this year to 98. The estimated cost to the FDIC’s insurance fund for Friday’s failures was $293.3 million.
On Tuesday, FDIC Chairwoman Sheila Bair acknowledged that the agency’s deposit fund would likely fall into the red within the week. Bair proposed a plan [2] to shore up the fund. Under the plan, banks would prepay their annual assessments owed to the FDIC. Payments that would normally stretch through 2012 would all be handed over this year. The plan would raise $45 billion. To avoid a hit on their earnings from the payments, banks would be allowed to record the prepayment as if they paid on the usual yearly schedule.
http://www.fdic.gov/bank/historical/bank/index.html
On Tuesday, FDIC Chairwoman Sheila Bair acknowledged that the agency’s deposit fund would likely fall into the red within the week. Bair proposed a plan [2] to shore up the fund. Under the plan, banks would prepay their annual assessments owed to the FDIC. Payments that would normally stretch through 2012 would all be handed over this year. The plan would raise $45 billion. To avoid a hit on their earnings from the payments, banks would be allowed to record the prepayment as if they paid on the usual yearly schedule.
http://www.fdic.gov/bank/historical/bank/index.html
Thursday, October 8, 2009
US Job LOSSES GREATER than expected
More US jobs lost than expected
The economy has shed 7.6 million jobs since the recession began
The US economy lost 263,000 jobs in September, which was more than had been expected, according to official non-farm payrolls figures.
The jobless rate rose to a fresh 26-year high of 9.8% from August's figure of 9.7%.
The number in employment has now fallen for 21 consecutive months.
There was more bad news from the Labor Department, which revised its figures for July and August to show 13,000 more jobs lost than previously reported.
The economy as a whole is expected to have grown in the past three months, but recovery in the jobs market tends to lag behind the rest of the economy.
'Pattern of weakness'
Since the start of the recession in December 2007, the number of people out of work has risen by 7.6 million to 15.1 million.
Expectations for recovery may have gotten a little ahead of the reality
Gary Thayer at Wells Fargo Advisors in Missouri
US unemployed despair as benefits run out
"Together with the ISM data, delinquencies data and even the consumer confidence data we had, we're starting to see a pattern of weakness emerge," said Kevin Caron, market strategist at Stifel, Nicolaus & Co in New Jersey.
"We saw a lot of artificial involvement by the government to prop up the markets, and now that that is starting to end the private sector isn't yet showing signs of life."
Government employment, which has been one of the factors boosting the economy in the past year, fell by 53,000 in September.
The other big areas of job losses were construction, manufacturing and retail.
Confidence needed
"It shows expectations for recovery may have gotten a little ahead of the reality," said Gary Thayer at Wells Fargo Advisors in Missouri.
"The trend is still improved from earlier this year, but employers need to feel more confident about the economy before they start hiring again."
The US is not alone in seeing rising unemployment, with the 16 nations that use the euro announcing on Thursday that its seasonally adjusted rate rose to 9.6% in August, putting the number of people without a job at 15.2 million.
Earlier on Friday, Japan unexpectedly announced that its jobless rate had fallen to 5.5% in August from July's record high of 5.7%, but the number of people unemployed still hit a six-year high of 3.61 million.
The economy has shed 7.6 million jobs since the recession began
The US economy lost 263,000 jobs in September, which was more than had been expected, according to official non-farm payrolls figures.
The jobless rate rose to a fresh 26-year high of 9.8% from August's figure of 9.7%.
The number in employment has now fallen for 21 consecutive months.
There was more bad news from the Labor Department, which revised its figures for July and August to show 13,000 more jobs lost than previously reported.
The economy as a whole is expected to have grown in the past three months, but recovery in the jobs market tends to lag behind the rest of the economy.
'Pattern of weakness'
Since the start of the recession in December 2007, the number of people out of work has risen by 7.6 million to 15.1 million.
Expectations for recovery may have gotten a little ahead of the reality
Gary Thayer at Wells Fargo Advisors in Missouri
US unemployed despair as benefits run out
"Together with the ISM data, delinquencies data and even the consumer confidence data we had, we're starting to see a pattern of weakness emerge," said Kevin Caron, market strategist at Stifel, Nicolaus & Co in New Jersey.
"We saw a lot of artificial involvement by the government to prop up the markets, and now that that is starting to end the private sector isn't yet showing signs of life."
Government employment, which has been one of the factors boosting the economy in the past year, fell by 53,000 in September.
The other big areas of job losses were construction, manufacturing and retail.
Confidence needed
"It shows expectations for recovery may have gotten a little ahead of the reality," said Gary Thayer at Wells Fargo Advisors in Missouri.
"The trend is still improved from earlier this year, but employers need to feel more confident about the economy before they start hiring again."
The US is not alone in seeing rising unemployment, with the 16 nations that use the euro announcing on Thursday that its seasonally adjusted rate rose to 9.6% in August, putting the number of people without a job at 15.2 million.
Earlier on Friday, Japan unexpectedly announced that its jobless rate had fallen to 5.5% in August from July's record high of 5.7%, but the number of people unemployed still hit a six-year high of 3.61 million.
Banks step in as US Dollar tumbles
Banks step in as dollar tumbles
Dollars
The dollar fell to a 14-month low against a basket of currencies
Asian central banks have intervened in the currency markets in an attempt to slow the slide of the US dollar.
Asian countries are worried about their export industries, which would be hurt by a weaker dollar.
Central banks in South Korea, Taiwan, the Philippines and Thailand have been buying the US currency, traders said.
As signs of economic recovery begin to emerge, traders have switched from the traditionally "safe" US dollar to buying other currencies.
A fresh wave of dollar-selling may have led to the banks' intervention.
The dollar fell to a 14-month low against a basket of currencies on Thursday.
Analysts believe that other countries have also intervened.
"It was reported earlier this morning that Russia was one of at least six central banks buying dollars," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon.
Dollars
The dollar fell to a 14-month low against a basket of currencies
Asian central banks have intervened in the currency markets in an attempt to slow the slide of the US dollar.
Asian countries are worried about their export industries, which would be hurt by a weaker dollar.
Central banks in South Korea, Taiwan, the Philippines and Thailand have been buying the US currency, traders said.
As signs of economic recovery begin to emerge, traders have switched from the traditionally "safe" US dollar to buying other currencies.
A fresh wave of dollar-selling may have led to the banks' intervention.
The dollar fell to a 14-month low against a basket of currencies on Thursday.
Analysts believe that other countries have also intervened.
"It was reported earlier this morning that Russia was one of at least six central banks buying dollars," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon.
Saturday, May 2, 2009
Bank Failures - May 1, 2009
The list of Bank Failures and Assistance Transactions is updated May 1, 2009.
America West Bank, Layton, Utah, with approximately $299.4 million in assets, was closed. Cache Valley Bank, Logan, Utah, has agreed to assume all deposits (approximately $284.1 million).
(PR-63-2009)
Citizens Community Bank, Ridgewood, New Jersey, with approximately $45.1 million in assets, was closed. North Jersey Community Bank, Englewood Cliffs, New Jersey, has agreed to assume all deposits (approximately $43.7 million). (PR-62-2009)
Silverton Bank, N.A., Atlanta, Georgia, with approximately $4.1 billion in assets and $3.3 billion in deposits was closed. The FDIC created a bridge bank, Silverton Bridge Bank, N.A., to take over operations. (PR-61-2009)
http://www.accesstradingmgmt.com/index.html
America West Bank, Layton, Utah, with approximately $299.4 million in assets, was closed. Cache Valley Bank, Logan, Utah, has agreed to assume all deposits (approximately $284.1 million).
(PR-63-2009)
Citizens Community Bank, Ridgewood, New Jersey, with approximately $45.1 million in assets, was closed. North Jersey Community Bank, Englewood Cliffs, New Jersey, has agreed to assume all deposits (approximately $43.7 million). (PR-62-2009)
Silverton Bank, N.A., Atlanta, Georgia, with approximately $4.1 billion in assets and $3.3 billion in deposits was closed. The FDIC created a bridge bank, Silverton Bridge Bank, N.A., to take over operations. (PR-61-2009)
http://www.accesstradingmgmt.com/index.html
Friday, April 24, 2009
27 Bank Closures 2009 4months
27 Bank Closures total First Four months 2009
The list of Bank Failures and Assistance Transactions is updated through April 24, 2009.
April 2009
Michigan Heritage Bank, Farmington Hills, Michigan, with approximately $184.6 million in assets, was closed. Level One Bank, Farmington Hills, Michigan, has agreed to assume all deposits, excluding certain brokered deposits (approximately $151.7 million). (PR-58-2009)
American Southern Bank, Kennesaw, Georgia, with approximately $112.3 million in assets and approximately $104.3 in deposits was closed. Bank of North Georgia, Alpharetta, Georgia, has agreed to assume all non-brokered deposits. (PR-57-2009)
Great Basin Bank of Nevada, Elko, Nevada, with approximately $270.9 million in assets, was closed. Nevada State Bank, Las Vegas, Nevada, has agreed to assume all deposits (approximately $241.4 million). (PR-55-2009)
American Sterling Bank, Sugar Creek, Missouri, with approximately $181 million in assets was closed. Metcalf Bank, Lee's Summit, Missouri, has agreed to assume all deposits (approximately $171.9 million). (PR-54-2009)
New Frontier Bank, Greeley, Colorado, with approximately $2.0 billion in assets and approximately $1.5 billion in deposits was closed. Deposit Insurance National Bank of Greeley, Greeley, Colorado has agreed to assume the non-brokered insured deposits. (PR-53-2009)
Cape Fear Bank, Wilmington, North Carolina, with approximately $492 million in assets, was closed. First Federal Savings and Loan Association, Charleston, South Carolina, has agreed to assume all deposits (approximately $403 million). (PR-52-2009)
((http://www.fdic.gov/bank/historical/bank/index.html))
The list of Bank Failures and Assistance Transactions is updated through April 24, 2009.
April 2009
Michigan Heritage Bank, Farmington Hills, Michigan, with approximately $184.6 million in assets, was closed. Level One Bank, Farmington Hills, Michigan, has agreed to assume all deposits, excluding certain brokered deposits (approximately $151.7 million). (PR-58-2009)
American Southern Bank, Kennesaw, Georgia, with approximately $112.3 million in assets and approximately $104.3 in deposits was closed. Bank of North Georgia, Alpharetta, Georgia, has agreed to assume all non-brokered deposits. (PR-57-2009)
Great Basin Bank of Nevada, Elko, Nevada, with approximately $270.9 million in assets, was closed. Nevada State Bank, Las Vegas, Nevada, has agreed to assume all deposits (approximately $241.4 million). (PR-55-2009)
American Sterling Bank, Sugar Creek, Missouri, with approximately $181 million in assets was closed. Metcalf Bank, Lee's Summit, Missouri, has agreed to assume all deposits (approximately $171.9 million). (PR-54-2009)
New Frontier Bank, Greeley, Colorado, with approximately $2.0 billion in assets and approximately $1.5 billion in deposits was closed. Deposit Insurance National Bank of Greeley, Greeley, Colorado has agreed to assume the non-brokered insured deposits. (PR-53-2009)
Cape Fear Bank, Wilmington, North Carolina, with approximately $492 million in assets, was closed. First Federal Savings and Loan Association, Charleston, South Carolina, has agreed to assume all deposits (approximately $403 million). (PR-52-2009)
((http://www.fdic.gov/bank/historical/bank/index.html))
Saturday, February 28, 2009
2 More US bank Failures
Regulators close banks in Illinois, Nevada
By SARA LEPRO, AP Business Writer
Friday, February 27, 2009
(02-27) 17:15 PST New York (AP) --
Regulators on Friday closed Heritage Community Bank in Illinois, and Security Savings Bank in Nevada, marking 16 failures this year of federally insured institutions.
The Federal Deposit Insurance Corp. was appointed the receiver of the banks.
Heritage Community Bank, based in Glenwood, Ill., had total assets of $232.9 million and deposits of $218.6 million as of Dec. 5. MB Financial Bank of Chicago agreed to assume all of Heritage's deposits, including those from brokers. All four of Heritage's branches will reopen on Saturday as branches of MB Financial.
Additionally, MB Financial agreed to buy $230.5 million in assets at a discount of $14.5 million. The FDIC will retain the remaining assets for a later sale. The FDIC and MB Financial also entered into a loss-sharing agreement in which MB Financial will share in the losses on about $181 million in assets.
Henderson, Nev.-based Security Savings Bank had total assets of about $238.3 million and deposits of $175.2 million as of Dec. 31. Las Vegas-based Bank of Nevada agreed to assume all of the deposits of Security Savings Bank, and purchase $111.3 million in assets. Security Savings' two offices will reopen Monday as Bank of Nevada branches.
The FDIC estimates that the cost to the deposit insurance fund from the closures will be about $100.7 million. Regular deposit accounts are insured up to $250,000.
The agency now expects bank failures will cost its insurance fund around $65 billion through 2013, up from an earlier estimate of $40 billion.
As unemployment rises and home prices fall, loan delinquencies and defaults are expected to keep soaring, which means bank failures are likely to escalate. The FDIC had 252 banks and thrifts on its list of troubled institutions at the end of 2008, up from 171 in the third quarter.
Facing a depleting insurance fund, federal regulators on Friday raised the fees banks pay and levied an emergency premium in a bid to collect $27 billion this year — placing further burden on an already struggling industry.
The law requires the insurance fund to be maintained at a certain minimum level of 1.15 percent of total insured deposits. But it fell below that minimum in mid-2008.
Twenty-five U.S. banks failed last year — including two of the biggest thrifts — more than in the previous five years combined and up from only three failures in 2007.
As a result, the deposit insurance fund dropped to $18.9 billion at Dec. 31 — the lowest level since 1987 — from $52.4 billion at the end of 2007.
President Barack Obama this week outlined a budget that called for spending up to $750 billion more for additional financial industry rescue efforts on top of the $700 billion Congress has already approved. The government also confirmed it will buy preferred shares from banks that can be converted into common shares, and the Treasury Department began to "stress test" the country's biggest banks to determine which might need more capital if the economy eroded further.
On Friday, the government announced plans to increase its stake in beleaguered Citigroup Inc. to as much as 36 percent by converting its preferred stock to common stock. While the conversion will dilute current shareholders' investments, a wider equity base means better protection against future losses.
Still, the news offered little comfort to investors who are worried about the stability of other banks.
By SARA LEPRO, AP Business Writer
Friday, February 27, 2009
(02-27) 17:15 PST New York (AP) --
Regulators on Friday closed Heritage Community Bank in Illinois, and Security Savings Bank in Nevada, marking 16 failures this year of federally insured institutions.
The Federal Deposit Insurance Corp. was appointed the receiver of the banks.
Heritage Community Bank, based in Glenwood, Ill., had total assets of $232.9 million and deposits of $218.6 million as of Dec. 5. MB Financial Bank of Chicago agreed to assume all of Heritage's deposits, including those from brokers. All four of Heritage's branches will reopen on Saturday as branches of MB Financial.
Additionally, MB Financial agreed to buy $230.5 million in assets at a discount of $14.5 million. The FDIC will retain the remaining assets for a later sale. The FDIC and MB Financial also entered into a loss-sharing agreement in which MB Financial will share in the losses on about $181 million in assets.
Henderson, Nev.-based Security Savings Bank had total assets of about $238.3 million and deposits of $175.2 million as of Dec. 31. Las Vegas-based Bank of Nevada agreed to assume all of the deposits of Security Savings Bank, and purchase $111.3 million in assets. Security Savings' two offices will reopen Monday as Bank of Nevada branches.
The FDIC estimates that the cost to the deposit insurance fund from the closures will be about $100.7 million. Regular deposit accounts are insured up to $250,000.
The agency now expects bank failures will cost its insurance fund around $65 billion through 2013, up from an earlier estimate of $40 billion.
As unemployment rises and home prices fall, loan delinquencies and defaults are expected to keep soaring, which means bank failures are likely to escalate. The FDIC had 252 banks and thrifts on its list of troubled institutions at the end of 2008, up from 171 in the third quarter.
Facing a depleting insurance fund, federal regulators on Friday raised the fees banks pay and levied an emergency premium in a bid to collect $27 billion this year — placing further burden on an already struggling industry.
The law requires the insurance fund to be maintained at a certain minimum level of 1.15 percent of total insured deposits. But it fell below that minimum in mid-2008.
Twenty-five U.S. banks failed last year — including two of the biggest thrifts — more than in the previous five years combined and up from only three failures in 2007.
As a result, the deposit insurance fund dropped to $18.9 billion at Dec. 31 — the lowest level since 1987 — from $52.4 billion at the end of 2007.
President Barack Obama this week outlined a budget that called for spending up to $750 billion more for additional financial industry rescue efforts on top of the $700 billion Congress has already approved. The government also confirmed it will buy preferred shares from banks that can be converted into common shares, and the Treasury Department began to "stress test" the country's biggest banks to determine which might need more capital if the economy eroded further.
On Friday, the government announced plans to increase its stake in beleaguered Citigroup Inc. to as much as 36 percent by converting its preferred stock to common stock. While the conversion will dilute current shareholders' investments, a wider equity base means better protection against future losses.
Still, the news offered little comfort to investors who are worried about the stability of other banks.
Thursday, February 26, 2009
Labor Dept Stats - Jobs Data Feb 14
WASHINGTON (Reuters) - The number of U.S. workers continuing to claim jobless benefits notched a fresh record in the second week of February, Labor Department data showed on Thursday, while new claims for aid were the highest since 1982.
The number of people remaining on the benefits roll after drawing an initial week of assistance increased by 114,000 to a 5.112 million in the week ended February 14, the most recent week for which data is available. The so-called continued claims topped every estimate in a Reuters poll of 15 economists, which had a consensus forecast of 5.00 million.
Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 667,000 in the week ended February 21 from a revised 631,000 the prior week, the Labor Department said. It was the highest reading since October 1982, when claims reached 695,000.
The year-long U.S. recession has savaged the labor market and sent the unemployment rate soaring, with some economists fearing it will pierce 9 percent in 2009 from 7.6 percent in January and mount further next year.
Analysts polled by Reuters had forecast 625,000 new claims versus a previously reported count of 627,000 the week before.
A Labor Department official said there were no special factors impacting the numbers.
The four-week average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, increased to 639,000 from 620,000 the week before. This was also the highest reading since October 1982, when the four-week average was 641,750.
The number of people remaining on the benefits roll after drawing an initial week of assistance increased by 114,000 to a 5.112 million in the week ended February 14, the most recent week for which data is available. The so-called continued claims topped every estimate in a Reuters poll of 15 economists, which had a consensus forecast of 5.00 million.
Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 667,000 in the week ended February 21 from a revised 631,000 the prior week, the Labor Department said. It was the highest reading since October 1982, when claims reached 695,000.
The year-long U.S. recession has savaged the labor market and sent the unemployment rate soaring, with some economists fearing it will pierce 9 percent in 2009 from 7.6 percent in January and mount further next year.
Analysts polled by Reuters had forecast 625,000 new claims versus a previously reported count of 627,000 the week before.
A Labor Department official said there were no special factors impacting the numbers.
The four-week average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, increased to 639,000 from 620,000 the week before. This was also the highest reading since October 1982, when the four-week average was 641,750.
Sunday, February 8, 2009
Friday, January 2, 2009
Sunday, December 14, 2008
Fed to press rates toward zero
WASHINGTON (Reuters) – The U.S. Federal Reserve is expected to drop interest rates close to zero on Tuesday, but anticipated remarks on unconventional methods to dispel a year-old recession are what will really matter.
Economists forecast a clear statement that the U.S. central bank will aggressively deploy so-called quantitative easing measures to shelter the economy from a steepening downturn, but do not expect details of what steps it will actually take.
Those words would accompany a decision by the Fed to lower its target for overnight rates by at least a half-percentage point, economists believe.
A half-point cut would take the bellwether federal funds rate to just 0.5 percent, the lowest on records dating to July 1954, as the central bank battles a recession many think will stretch well into next year.
The announcement is expected around 2:15 p.m. on Tuesday at the end of a two-day meeting. The gathering had initially been scheduled for a single day, but was extended so policy-makers could study options for unusual steps to spur the economy with little room left to lower borrowing costs.
"From here on out, monetary policy has to rely primarily on non-traditional tools, tools other than the funds rate, to try to stimulate the economy," said former Fed Governor Lyle Gramley, who expects the Fed to spell this out.
More >> http://news.yahoo.com/s/nm/20081214/bs_nm/us_usa_fed_3
By Alister Bull Alister Bull – Sun Dec 14, 12:19 pm ET
Economists forecast a clear statement that the U.S. central bank will aggressively deploy so-called quantitative easing measures to shelter the economy from a steepening downturn, but do not expect details of what steps it will actually take.
Those words would accompany a decision by the Fed to lower its target for overnight rates by at least a half-percentage point, economists believe.
A half-point cut would take the bellwether federal funds rate to just 0.5 percent, the lowest on records dating to July 1954, as the central bank battles a recession many think will stretch well into next year.
The announcement is expected around 2:15 p.m. on Tuesday at the end of a two-day meeting. The gathering had initially been scheduled for a single day, but was extended so policy-makers could study options for unusual steps to spur the economy with little room left to lower borrowing costs.
"From here on out, monetary policy has to rely primarily on non-traditional tools, tools other than the funds rate, to try to stimulate the economy," said former Fed Governor Lyle Gramley, who expects the Fed to spell this out.
More >> http://news.yahoo.com/s/nm/20081214/bs_nm/us_usa_fed_3
By Alister Bull Alister Bull – Sun Dec 14, 12:19 pm ET
Wednesday, December 10, 2008
World Bank: Global recession possible next year
World Bank says deep global recession possible in 2009 due to international banking crisis
WASHINGTON (AP) -- Economic growth prospects for both high income and developing countries have deteriorated substantially and the possibility of a very deep global recession cannot be ruled out, the World Bank said Tuesday.
The international banking crisis that erupted in September after more than a year of less acute financial turmoil has substantially reinforced the cyclical downturn that was already under way, the bank said in a report devoted to assessing economic prospects for 2009.
"Following the insolvency of a large number of banks and financial institutions in the United States, Europe and the developing world, financial conditions have become much tighter, capital flows to developing countries have dried up and huge amounts of market capitalization have evaporated," the bank said.
The bank predicted world economic growth will be 2.5 percent in 2008 and 0.9 percent in 2009. It said developing countries will likely grow 4.5 percent next year, down from 7.9 percent in 2007, while the economies of high income countries will shrink.
Even if the strong measures governments took to restore confidence in the international banking system work and credit begins to thaw, a number of developing countries are likely to face substantial strains, possibly including bank failures and currency crises, the bank said.
"In these very uncertain circumstances," the bank said, "policy makers must place a premium on reducing the likelihood of domestic turmoil by reacting swiftly and forcefully to emerging difficulties, including, if necessary, seeking assistance from the International Monetary Fund.'"
The IMF provides rescue packages to countries in financial crises while the bank, its sister institution, lends money or makes grants for development projects.
"People in the developing world have had to deal with two major external shocks ---- the upward spiral in food and fuel prices followed by the financial crisis, which has eased tensions in commodity markets but is testing banking systems and threatening job losses around the world," said Justin Lin, the bank's chief economist. "Urgent steps are needed to help reduce fallout from the crisis on the real economy and on the poorest."
In response to the crisis the bank said it was increasing its support for developing countries, through new spending commitments of up to $100 million over the next three years. The bank said its private sector arm, the International Finance Corp., would help by providing trade financing, helping banks recapitalize or aiding infrastructure projects facing financial distress.
By Harry Dunphy, Associated Press Writer, Wednesday December 10, 9:21 am ET
http://www.accesstradingmgmt.com/index.html
WASHINGTON (AP) -- Economic growth prospects for both high income and developing countries have deteriorated substantially and the possibility of a very deep global recession cannot be ruled out, the World Bank said Tuesday.
The international banking crisis that erupted in September after more than a year of less acute financial turmoil has substantially reinforced the cyclical downturn that was already under way, the bank said in a report devoted to assessing economic prospects for 2009.
"Following the insolvency of a large number of banks and financial institutions in the United States, Europe and the developing world, financial conditions have become much tighter, capital flows to developing countries have dried up and huge amounts of market capitalization have evaporated," the bank said.
The bank predicted world economic growth will be 2.5 percent in 2008 and 0.9 percent in 2009. It said developing countries will likely grow 4.5 percent next year, down from 7.9 percent in 2007, while the economies of high income countries will shrink.
Even if the strong measures governments took to restore confidence in the international banking system work and credit begins to thaw, a number of developing countries are likely to face substantial strains, possibly including bank failures and currency crises, the bank said.
"In these very uncertain circumstances," the bank said, "policy makers must place a premium on reducing the likelihood of domestic turmoil by reacting swiftly and forcefully to emerging difficulties, including, if necessary, seeking assistance from the International Monetary Fund.'"
The IMF provides rescue packages to countries in financial crises while the bank, its sister institution, lends money or makes grants for development projects.
"People in the developing world have had to deal with two major external shocks ---- the upward spiral in food and fuel prices followed by the financial crisis, which has eased tensions in commodity markets but is testing banking systems and threatening job losses around the world," said Justin Lin, the bank's chief economist. "Urgent steps are needed to help reduce fallout from the crisis on the real economy and on the poorest."
In response to the crisis the bank said it was increasing its support for developing countries, through new spending commitments of up to $100 million over the next three years. The bank said its private sector arm, the International Finance Corp., would help by providing trade financing, helping banks recapitalize or aiding infrastructure projects facing financial distress.
By Harry Dunphy, Associated Press Writer, Wednesday December 10, 9:21 am ET
http://www.accesstradingmgmt.com/index.html
Saturday, December 6, 2008
Automakers - 3 million Jobs Gone
Three million jobs could be at stake if one of the big three automakers fails, and the prospect of a bailout is looking bleak. Michelle Miller reports.
Three million jobs could be at stake if one of the big three automakers fails, and the prospect of a bailout is looking bleak. Michelle Miller reports.
(CBSNewsOnline)
Three million jobs could be at stake if one of the big three automakers fails, and the prospect of a bailout is looking bleak. Michelle Miller reports.
(CBSNewsOnline)
Wednesday, December 3, 2008
Saturday, November 29, 2008
TED Spread - Indicator
The TED spread, or the difference between US Treasury bill and eurodollar interest rates, is an indicator of perceived credit risk in the general economy. US government Treasury bills are considered risk-free while eurodollar borrowing costs, measured by the London interbank offered rate (LIBOR), reflect the credit risk of lending to commercial banks.
When the TED spread increases it is a sign that lenders believe the risk of default on interbank loans is increasing. Interbank lenders therefore demand a higher rate of interest, or accept lower returns on safe investments such as T-bills. When the risk of banks defaults is considered to be decreasing, the TED spread decreases. The TED spread fluctuates over time but has often remained within the range of 10 and 50 basis points (0.1% and 0.5%), at least until 2007. A rising TED spread often presages a downturn in the U.S. stock market, as it indicates that liquidity is being withdrawn.
- Clive McKeef
Saturday, November 22, 2008
Wednesday, November 19, 2008
Great Depression 2 - Indicators
29 indicators of the coming Great Depression 2 BY 2011 -
* By Paul B. Farrell, MarketWatch
Every day there is more breaking news, proof Wall Street's greed is already back to "business as usual" and in denial, grabbing more and more from the new "Bailouts-R-Us" bonanza of free taxpayer cash and credits, like two-year-olds in a toy store at Christmas -- anything to boost earnings, profits and stock prices, and keep those bonuses and salaries flowing, anything to blow a new bubble.
Scan these 30 "leading indicators." Each problem has one or more possible solutions, but lacks unified political support. Time's running out. We're already at the edge. Add up the trillions in debt: Any collective solution will only compound our problems, because the cumulative debt will overwhelm us, make matters worse:
1)America's credit rating may soon be downgraded below AAA
2)Fed refusal to disclose $2 trillion loans, now the new "shadow banking system"
3)Congress has no oversight of $700 billion, and Paulson's Wall Street Trojan Horse
4)King Henry Paulson flip-flops on plan to buy toxic bank assets, confusing markets
5)Goldman, Morgan lost tens of billions, but planning over $13 billion in bonuses
this year
6)AIG bails big banks out of $150 billion in credit swaps, protects shareholders
before taxpayers
7)American Express joins Goldman, Morgan as bank holding firms, looking for Fed
money
8)Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to
states
9)State revenues down, taxes and debt up; hiring, spending, borrowing add even more
debt
10)State, municipal, corporate pensions lost hundreds of billions on derivative
swaps
11)Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%, liquidations up
12)Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns
13)Fed also plans to provide billions to $3.6 trillion money-market fund industry
14)Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars
15)Washington manipulating data: War not $600 billion but estimates actually $3
trillion
16)Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion
Street write-offs
17)Commodities down, resource exporters and currencies dropping, triggering a global
meltdown
18)Big three automakers near bankruptcy; unions, workers, retirees will suffer
19)Corporate bond market, both junk and top-rated, slumps more than 25%
20)Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall
21)Unemployment heading toward 8% plus; more 1930's photos of soup lines
22)Government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists
23)China's sees GDP growth drop, crates $586 billion stimulus; deflation is now
global, hitting even Dubai
24)Despite global recession, U.S. trade deficit continues, now at $650 billion
25)The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded
liabilities
26)Now 46 million uninsured as medical, drug costs explode
27)New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable
debt
28)Outgoing leaders handicapping new administration with huge liabilities
29)The "antitaxes" message is a new bubble, a new version of the American dream offering a free lunch, no sacrifices, exposing us to more false promises.
Will the next meltdown, the third of the 21st Century, trigger a second Great Depression? Or will the 2007-08 crisis simply morph into a painful extension of today's mess to 2011 and beyond, with no new bull market, no economic recovery as our new president hopes?
http://www.accesstradingmgmt.com/index.html
* By Paul B. Farrell, MarketWatch
Every day there is more breaking news, proof Wall Street's greed is already back to "business as usual" and in denial, grabbing more and more from the new "Bailouts-R-Us" bonanza of free taxpayer cash and credits, like two-year-olds in a toy store at Christmas -- anything to boost earnings, profits and stock prices, and keep those bonuses and salaries flowing, anything to blow a new bubble.
Scan these 30 "leading indicators." Each problem has one or more possible solutions, but lacks unified political support. Time's running out. We're already at the edge. Add up the trillions in debt: Any collective solution will only compound our problems, because the cumulative debt will overwhelm us, make matters worse:
1)America's credit rating may soon be downgraded below AAA
2)Fed refusal to disclose $2 trillion loans, now the new "shadow banking system"
3)Congress has no oversight of $700 billion, and Paulson's Wall Street Trojan Horse
4)King Henry Paulson flip-flops on plan to buy toxic bank assets, confusing markets
5)Goldman, Morgan lost tens of billions, but planning over $13 billion in bonuses
this year
6)AIG bails big banks out of $150 billion in credit swaps, protects shareholders
before taxpayers
7)American Express joins Goldman, Morgan as bank holding firms, looking for Fed
money
8)Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to
states
9)State revenues down, taxes and debt up; hiring, spending, borrowing add even more
debt
10)State, municipal, corporate pensions lost hundreds of billions on derivative
swaps
11)Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%, liquidations up
12)Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns
13)Fed also plans to provide billions to $3.6 trillion money-market fund industry
14)Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars
15)Washington manipulating data: War not $600 billion but estimates actually $3
trillion
16)Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion
Street write-offs
17)Commodities down, resource exporters and currencies dropping, triggering a global
meltdown
18)Big three automakers near bankruptcy; unions, workers, retirees will suffer
19)Corporate bond market, both junk and top-rated, slumps more than 25%
20)Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall
21)Unemployment heading toward 8% plus; more 1930's photos of soup lines
22)Government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists
23)China's sees GDP growth drop, crates $586 billion stimulus; deflation is now
global, hitting even Dubai
24)Despite global recession, U.S. trade deficit continues, now at $650 billion
25)The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded
liabilities
26)Now 46 million uninsured as medical, drug costs explode
27)New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable
debt
28)Outgoing leaders handicapping new administration with huge liabilities
29)The "antitaxes" message is a new bubble, a new version of the American dream offering a free lunch, no sacrifices, exposing us to more false promises.
Will the next meltdown, the third of the 21st Century, trigger a second Great Depression? Or will the 2007-08 crisis simply morph into a painful extension of today's mess to 2011 and beyond, with no new bull market, no economic recovery as our new president hopes?
http://www.accesstradingmgmt.com/index.html
Tuesday, November 18, 2008
Friday, November 14, 2008
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