Important News - Oct. 24
By Daniel at 24 October, 2009, 12:51 pm
SAN FRANCISCO (MarketWatch) — President Barack Obama declared the H1N1 flu outbreak a national emergency, giving officials the ability to bypass some federal requirements for battling emergencies, the White House said Saturday.
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More than 1,000 people have died in the U.S. from swine flu, including almost 100 children, and the flu is widespread in 46 states.
1) Bank failures hit 106 for year; many more are weak (AP)
106 banks so far for 2009 and we still have November and December to get through!
“It’s a big number that only tells part of the story. The number of banks that have failed so far this year topped 100 on Friday — hitting 106 by the end of the day — the most in nearly two decades.”
2) How Uncle Sam is killing your savings (M.W.)
Ultralow rates are hurting the nation’s prudent savers as they bear the brunt of Wall Street.
3) “Goldman Sachs Is Too Big to Tell It Straight” By Jonathan Weil
4) Nouriel Roubini: Big Crash Coming
5) Breaking: Strong quake hits eastern Indonesia, causes panic
6) Ron Paul: Senators Merkley, Corker Plan Bill to Sabotage Audit the Fed Bill
7) Stress Test Shenanigans: Round 2
AFP reports:
The Federal Reserve will expand its so-called stress tests of the banking system to ensure they have enough capital during difficult periods, Fed chairman Ben Bernanke said Friday.
CITI’S FLEXNER CALLS SMALL BANK CONSTRUCTION LOANS NEXT DANGER
Oct. 23 (Bloomberg) — Small and regional banks hold $480 billion in commercial property construction loans that face mounting default rates, said Thomas Flexner, global head of real estate at Citigroup Global Markets Inc.
“I think in many cases we’re going to find borrowers just handing back the keys,” Flexner said in an interview on WBBR Bloomberg Surveillance. “We’re going to have broken assets.”
9) “House panel’s probe targets big mortgage lenders” By Marcy Gordon
“WASHINGTON - A House panel is investigating the role of mortgage lenders in the financial crisis and is seeking information from some of the biggest US companies to determine if they used deceptive practices to lure borrowers into the housing boom.”
10) Warning: The Greatest Depression Is Coming (M.W.)
The system is moving into extreme peaks and troughs at a much more rapid pace now than anytime in the last 50 or more years. The next stage… will be “like nothing we’ve ever seen in our lifetime.”
11) US Treasury sets record $123 billion bond auction next week (M.W.)
The U.S. government announced a record volume of $123 billion worth of bond auctions next week…. beats the previous record of $115 set in July…will also sell $44 billion of two-year notes, and $41 billion worth of five-year notes.
- 12) Quotes from 6th China-ASEAN (Association of Southeast Asian Nations) Expo
(saxplayer)
“I believed RMB would play a more important role in bilateral trade between China and ASEAN in the future. Yuan was a very stable currency and expanding its use could help reduce risks faced by the ASEAN countries in using the U.S. dollar, which has become highly volatile as a result of the global financial crisis.” — Alongkorn Ponlaboot, deputy minister of commerce of Thailand.
- 13) China to use ASEAN meet to make Yuan an international currency
“BEIJING: China is set to use the ASEAN meet to sell the idea of making the Yuan an international currency. It is using the sense of uncertainty over the US dollar to sell a new dream of enlarged regional trade, financial support from Beijing and reduced dependence on the volatile dollar.”
- 14) Bank failures hit 106 for year; many more are weak
“Dozens, perhaps hundreds, of other banks remain open even though they are as weak as many that have been shuttered. Regulators are seizing banks slowly and selectively — partly to avoid inciting panic and partly because buyers for bad banks are hard to find.
Going slow buys time. An economic recovery could save some banks that would otherwise go under. But if the recovery is slow and smaller banks’ finances get even worse, it could wind up costing even more.”
“The State of New York deferred a September payment of nearly $1 billion to the New York State Common Retirement Fund, Albany, in order to conserve cash, confirmed Matt Anderson, a spokesman for the state’s Division of the Budget.
The state’s decision to delay the $959.1 million payment, which was first reported by Bloomberg, was a “cash management action,” explained Mr. Anderson. The state is currently facing a $3 billion deficit, he said.”
“Oct. 23 (Bloomberg) — New Jersey taxpayers are sending almost $1 million a month to a partnership run by Goldman Sachs Group Inc. for protection against rising interest costs on bonds that the state redeemed more than a year ago.
The most-densely populated U.S. state is making the payments under an agreement made during the administration of former Governor James E. McGreevey in 2003, when New Jersey’s Transportation Trust Fund Authority sold $345 million in auction-rate bonds whose yields fluctuated with short-term interest costs. The agency finances road and rail projects.
“This vividly shows the risk of entering into interest- rate swap agreements,” said Christopher Taylor, former executive director of the Municipal Securities Rulemaking Board in Alexandria, Virginia. “The world’s got to see what stupidity even the sophisticated investors like the transportation fund can get into.”
While New Jersey replaced the debt with fixed-rate securities in 2008 after the $330 billion auction-rate bond market froze, the swap — in which two parties typically exchange fixed payments for ones based on floating interest rates — isn’t scheduled to expire until 2019.”
“HARRISBURG, Pa. - Hundreds more employees of Pennsylvania’s state government are expected to get pink slips.
Gov. Ed Rendell said Friday that he expects hundreds of layoffs to be made right before Thanksgiving as a result of spending cuts.”
- 18) Campbell warns state budget gap may widen (California)
“Republican Tom Campbell, a candidate for governor who was the last state finance director to preside over a balanced budget, warned this week that California may be awash in more red ink, with revenue expected to fall short of projections by as much as $3 billion by the end of December.
The alarm from Campbell, a former dean of the UC Berkeley Haas School of Business, came after state officials acknowledged two weeks ago that state revenue for the first quarter of the fiscal year, ending Sept. 30, fell $1.1 billion short of predictions.”
- 19) Soros calls Wall St profits ‘gifts’ from state
(saxplayer)
“The big profits made by some of Wall Street’s leading banks are “hidden gifts” from the state, and taxpayer resentment of such companies is “justified”, George Soros, the fund manager, said in an interview with the Financial Times.
“Those earnings are not the achievement of risk-takers,” Mr Soros said. “These are gifts, hidden gifts, from the government, so I don’t think that those monies should be used to pay bonuses. There’s a resentment which I think is justified.””
20) Commercial real-estate crisis has begun:
SAN FRANCISCO (MarketWatch) — In another sign that the commercial real-estate market may be struggling as much as the residential side, Capmark Financial Group Inc., one of the nation’s largest commercial lenders, likely will file for bankruptcy this weekend, according to a media report Saturday.
Capmark, formerly GMAC LLC’s commercial real-estate arm, recently reported a second-quarter loss of $1.6 billion and signaled it may seek bankruptcy protection. The company will file this weekend, The Wall Street Journal reported in its online edition, citing an unnamed source.
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