Michael David White submits:
NewObservations.net projects residential real estate prices will fall 12 percent nationwide in 2010.
Our average of four major indexes predicts a total fall in prices of 34% from peak to stable trend. The total fall of 34% is based upon a current loss across four number sets of 19%.
David Hunkar submits:
Unlike many other countries, there are thousands of small community banks in the U.S. These banks have a smaller foot print when compared to the regional or national banks such as Bank of America (BAC), Fifth Third Bank (FITB), U.S. Bank (USB), etc. However they are usually know their customers better and maintain close relationships with the local small businesses and consumers.
Some community banks operate in just a few counties and have very few branches. For example, United Bancorp Inc Ohio (UBCP) is a state chartered bank and has branches in just a seven country area in Ohio.
Tom Armistead submits:
Paul Volcker’s recent op-ed in the Financial Times shares some common lines of thought with Obama’s State of the Union speech, delivered a few days earlier. The sections in question:
Volcker:
Nicholas Marshi submits:
Let’s face it. The BDC industry does not get much coverage in the business paper of record (the Wall Street Journal). So any time there is an article written we’re curious. This piece about Apollo and goings on in the BDC industry is relatively short and has one glaring mistake in it (more on that later), but there’s always something to learn.
The main take-away is that Apollo Investment (AINV) has been looking at all distressed deals and BDCs around (“we’ve looked at everybody”). Apollo’s President – Patrick Dalton – made the distinction that some BDCs “focus more on the asset management business”, while his firm focuses more on “direct investment”. This suggests Apollo is talking about known and suspected targets such as American Capital, Allied Capital, Kohlberg Capital and GSC Investments (which has a CLO).
Gary A submits:
I submitted these questions to the Federal Reserve Governors on their website. Since I am not certain that I will get straight up answers to the questions, I urge the economists among the SA readership to attempt to answer these questions in the comment section:
I would like to know why it was necessary to extend swap lines when loans could have been made by central banks in their own currencies. In other words, why were swap lines, and loans made in American dollars by foreign central banks necessary?
Linus Wilson submits:
Reuters reports that the Federal Deposit Insurance Corporation (FDIC) has seized fifteen banks so far in 2010. That puts the FDIC-assisted bank failures on pace to exceed the 140 in 2009. The FDIC is increasingly open to every trick in the book to unload this inventory at the best prices that it can. Increasingly, the successful bidders to take over failed banks have been private equity firms instead of the more common method which involves purchases by well capitalized banks.
The FDIC floated a plan in the Financial Times last week to securitize its left over junk loans and real estate assets with a FDIC, and ultimately taxpayer, guarantee. They have an inventory of $36 billion in toxic assets and that inventory will only climb. My paper “Slicing the Toxic Pizza” indicates that such a plan is not the money loser for taxpayers that it seems at face value.
Tom Schumacher submits:
An article in Friday’s Financial Times discussed Canada’s banking system. According to World Economic Forum, Canada has the world’s "soundest" banking system. It is the only country in the G7 that did not have to come to the aid of its financial sector with a state sponsored bailout. So what makes the Canadian financial system different? The FT claims that first and foremost its a function of Canadian culture,
Depending on your degree of fondness for Canucks, this thesis comes down to the notion that Canadians are either too nice or too dull to indulge in the no-holds-barred, plundering capitalism that created such a spectacular boom, and eventual bust, in more aggressive societies.
Michael Shulman submits:
What are the best shorts in this flailing market? Depends on whether you do charts or fundamentals. I do fundamentals with a light taste of charts, so this is about fundamentally weak companies that can no longer benefit from tailwinds provided by a technically driven market rally.
Where to look? First, unduly high Wall Street expectations for fundamentals. Second, companies in segments that are going to take a hit when the economy takes its double dip or has meager growth in the second half of the year. Third, companies with weak balance sheets. Fourth, companies inside bubbles about to pop, or ETFs for segments that are bubblicious and ready to blow for any number of reasons.
Kimball Corson submits:
Richard Suttmeier submits:
Why I forecast a Double-Dip Recession.
We began this economic mess in 2007 when our banking regulators said subprime mortgage loan problems would not spread to the real economy.
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