Bank failure Friday!!!

Yippeeee!!!

Well, I'm glad they did it politely.

If you can't lose $1bn, you don't deserve to call yourself an American bank

For the year dawg?

OT but in case anyone is interested: Seeds of a Recovery?

Dirk van Dijk
Inventory draw downs only get balanced out by inventory builds later when sales are constant, this appears to be a clear step shift down to lower sales and thus a lower sustained inventory level. Not trying to correct you, but perhaps a useful distinction

Great haiku.

cleaning out his office

Representative Mark Kirk, a member of the House Appropriations Committee and co-chair of a group of lawmakers promoting relations with Beijing, said China had "very legitimate" concerns about its investments. "It would appear, quietly and with deference and politeness, that China has canceled America's credit card," Kirk told the Committee of 100, a Chinese-American group. "I'm not sure too many people on Capitol Hill realize that this is now happening," he said.

.......Mr. Market will be the LAST to get it..........

EHP, even in the case of a drop to a lower permament level of demand there can be an inventory "rebound". For example if a store normally sells 100 units a month and holds one month's inventory in stock, and demand suddenly falls to 50 units per month, the store which normally ordered 100 units per month could stop ordering entirely for one month, and then start ordering at 50 units per month, 50 is a big increase over 0. In reality, the store would not know if the 50 was in deed permament, or if it were going to fall further to say 30. Thus they might cut their orders to 25 in the first month of the decline, then raise them to 30, then to 35 etc until they finally got to their new equilibrium level of 50 sales per month and 50 units of inventory.

@dryfly, last thread: "how much money does the Deposit Insurance Fund have left? does the dif have access to unlimited funds?
Answers in order: 'none of your business' and 'yes'..."

My practical worry about this is that if the FDIC (or NCUA) were hit with a crisis of some sort, with a depleted reserve, then there might be a lag between when the bank blows up and when the FDIC can send out the checks. Has Congress done anything pre-emptive to guarantee an FDIC / NCUA credit line with the Treasury? Obviously consumers can mitigate this with extra bank accounts, cash at home, and so on, but for small-to-midsize corporate accounts, it is probably not so easy.

I see Congress started moving an FDIC credit line bill back in March (Dodd actually doing something useful?), but don't see a conclusion yet: Bill Seeks to Let FDIC Borrow up to $500 Billion - WSJ.com 

Until that goes through, from the link, it says "A 1991 law generally caps the amount of money the FDIC can borrow from the Treasury at $30 billion".

Not even 100 million? Just a snack. I'm still hungry. I want one of the stress tested banks. yum!

and its not even 5 o'clock, EST yet...

I suspect , like previously noted, FDIC is using the small banks as a training ground as the FDIC ramps up staffing...Someday, the National banks will get their turn at the well...They must see what is happening, and where they stand in the line...just a matter of time...

GO FDIC!!!

Hoops--I thought you were gonna give 'em 14 days. Couldn't stand it any more?

Or, maybe they couldn't stand you? That would be a complement.

Umm, NC Jim, I think you're confusing Rhode Island with New Jersey. Rhode Island is definitely in deep doo-doo. Unemployment rivaling Michigan, but without the auto industry?

EvilHenryPaulson (profile) wrote (in reply to...) on Fri, 5/1/2009 - 2:35 pm reply Ignore user
Rob Dawg
You could find redemption by predicting the 1 bank closure to rule them all

Yes, but who shall we choose to be the ring bearer to carry this burden to Mount Doom and defeat Goldman Sachs forever and usher in a New Age? FrodObama?

@EHP "the 1 bank closure to rule them all"

I thought the TARP was the "one bailout to bring them all, and in the darkness bind them" ???

... "... for the masters of the universe, who above all else desire power"...

NC Jim

You mean Rhode Island

Maybe they were getting to the point where First Smallbank was gonna ask for some money and then not gonna get it? And then Smallbank which everybody thought was ok, fails?

How did they react?

Interesting Field Polls this week for California:

4/30: "WHILE CALIFORNIA VOTERS PREFER SPENDING CUTS TO TAX INCREASES TO RESOLVE THE STATE BUDGET DEFICIT, MAJORITIES OPPOSE CUTBACKS IN TEN OF TWELVE SPENDING CATEGORIES." -- the exceptions are prisons and parks. Guess they get cut next? http://field.com/fieldpollonline/subscribers/Rls2306.pdf

4/29: "Voter sentiment running against five of six budget propositions on May 19 ballot. Majorities skeptical that Prop. 1A will achieve its goals. Many voters confused about the impact that Props. 1D and 1E will have on health-related budgets." My take: These 5 propositions are laws to be directly voted upon, which would (among other things) lead to increased future taxes, selling a bond to be financed by future "improved" lottery proceeds in order to plug the current budget gap, and rearranging voter-approved spending categories to free up funds for the general budget... wife and I just voted against them (mail-in ballot). http://field.com/fieldpollonline/subscribers/Rls2305.pdf

Durbin was holding the FDIC loan bill hostage to get the banks to agree to his cramdown provision in the housing bill. That, of course failed yesterday, so I do not know if Durbin will make good on his threat to kill the FDIC provision, so that the FDIC has to make huge assessments on the bamnks to replenish the BIF

Hoopajoops LTD
Is a layoff what they used to call right sizing?

Took a hit in '07 when Lone Star snatched LEND from the jaws of BK. Glad to hear they took it on the chin, LEND files BK. Serves 'em right for screwing my trading acct.

WRAPUP 1-US lenders Thornburg, Accredited file for Ch. 11
| Reuters

Was looking at the FDIC press releases for this year. There are:
11 instances of "Acquires all Deposits"
13 "Assumes all Deposits"
3 "Approves Payout"
1 "Receives Insured Deposits"
2 relating to creating new banks and 1 relating to selling a bank

OK, learned CR readers, what's the difference between the first four?

lawyerliz
individual assessments of poor performance? if it is a layoff, I think the bureaucracy required by the state steps up a level. If people are paid by commission or billable hours, it's not worth the effort to actively lay them off (?)

only in Joisey.

Ridgewood NJ.... the hedge fund I worked for for 11 years was located there.

I lived in the next town over.

When you meet people in the NYC metro area and tell them you live in NJ, they don't ask what town you live in, they ask "what mall" or "what exit." I'm not kidding.

Hoops, good for you.

I quit every job I ever had after getting fed up with them for not paying me enough and moving onto another job or just to taking an extended vacation or sabbatical in between jobs. Never had a problem finding a new job when I wanted it. I'm into my 4th year sabbatical now, went John Galt the last time I quit and am loving every minute of it.

Dr. Helen Talks to PJTV Viewers Who Are Going John Galt
PJTV - Ask Dr. Helen - Dr. Helen Talks to PJTV Viewers Who Are Going John Galt

lawyerliz (profile) wrote on Fri, 5/1/2009 - 9:49 pm
How could you have a steath layoff.

Maybe it is like when China stops buying Treasuries but Congress does not notice and keeps spending.

Stealth layoff: atmosphere was very jovial the day before, then unannounced layoffs occurred in the morning. That's what happened with my BofA coworkers several months ago. Ken Lewis didn't want "risk" associated with Prime Brokerage then... afterwards, bought Merill Lynch... wash rinse repeat

People here are smart enough to realize that the corporate law gravy train is over.

Yeah. Half of my school is still in the dark...

hoops, are you still doing the pre-medical school route? please don't tell me you enrolled in one of those glorified post-liberal arts pre-med programs.

maybe it's just me, but health care is about 2 years behind big law when in terms of a bubble popping... and good god is med school expensive.

FD: I lasted about 2 weeks in med school before I had to leave. something about me constantly complaining that health care dollars don't grow on trees...

Have you had any time to muse about what career you might do post-school? Just curious

I thought he was going to decorate those six foot cakes for lodge events and bachelor parties. But maybe I'm confused.

Coal stocks up 30% this week. Is GM making a coal powered car soon? (Though electric powered cars are....nevermind, bitter cause I took my coal profits early in the week before the run-up).

hoops, are you still doing the pre-medical school route? please don't tell me you enrolled in one of those glorified post-liberal arts pre-med programs.

maybe it's just me, but health care is about 2 years behind big law when in terms of a bubble popping...

I see a medical bubble too. Doctors are badly treated, wages are dropping, barrier to entry is high, and there aren't enough of them. Something's gotta give, and usually that's the quality of life of the doctors. I'm going to hold back until either they make getting the license way easier, they pay for it, or they make the wages incredibly high. I'm not going to pay sticker price on the eve of a government subsidy program, that's for sure.

Also sticking my finger up people is less exciting than working on monoclonal antibodies for the creatures living inside of them making them work. So it's either advanced biologics or crop sciences for me.

I thought he was going to decorate those six foot cakes for lodge events and bachelor parties. But maybe I'm confused.

I am also pioneering the BIGLAW ---> BIGCAKE transition.

Well, that would be depressing. Do they work? Withdraw? I bet some go postal eventually.

This is a gentleman's firm, the last of them, so they all tend to soldier on until the end. One guy I know who got the SL worked until 9pm on his last day on something. This is not the kind of place where security stands and watches you clean out your desk.

dr munch (profile) wrote on Fri, 5/1/2009 - 3:14 pm reply Ignore user
Coal stocks up 30% this week. Is GM making a coal powered car soon? (Though electric powered cars are....nevermind, bitter cause I took my coal profits early in the week before the run-up).

Coal powered autos are technical/engineering problems not physics problems. Ten years from now you could be buying sticks of coal to plasma inject hobby glue gun style into your auto. You won't because nobody makes any money in this direction.

Hoops--do not become a doctor. Big debt, less pay every year, patients don't want to pay their co-pays, insurance companies are ass holes, get paid $75 dollars for a potential million dollar law suit. Medical care is the next Katrina.

Will the real Terri Duhon please stand up? (and take a bow!)

B & B Structured Finance

B & B Structured Finance

Why Terri Duhon? Well, maybe you'd like to ask Gillian Tett?

FT.com / Reportage - Genesis of the debt disaster 

Maybe she can help YOU learn the brave new world of mortgage backed credit derivatives. FUN!

A neighbor, retired from the fdic for 11 years was enticed back. He kept on making more demands--not pay, more work location and time off--and the fdic agreed. When you hire many old referees, you expect many games. Soon, a biggee is gonna go down--any ideas about a $10+ billion zombie?

No.. they are spoiled overpaid brats who can do f**k all without pharma magic behind them. Seriously, I would support public torture+ executions of the politically active top 10% of doctors in this country. Most of the useful stuff that doctors do is fairly easy to teach and practice. I have real issues with paying them anything close to what most of them make now.

And if you believe that reducing pay from current levels will reduce the quality of people who enter the profession, you have no idea about what medicine can do and not do... namely not a whole heck of a lot beyond acute and subacute diseases.

"Doctors are badly treated, wages are dropping, barrier to entry is high, and there aren't enough of them. Something's gotta give, and usually that's the quality of life of the doctors. I'm going to hold back until either they make getting the license way easier, they pay for it, or they make the wages incredibly high."

Soon, a biggee is gonna go down--any ideas about a $10+ billion zombie?

Certainly BofA deserves it due to years of bad decisions but WFC is the biggest I expect and Regions may be the most costly.

"That sounds like a fairly high dosage."

One should be very reluctant to prescribe any supplements to anyone without having appropriate medical training and without knowing them in a medical sense. Nor would I accept the advice of anyone who would do so.

Is there a Bank of Truth or Dare?

I agree.. but doctors are often no better than quacks.

Think Vioxx, Plavix, Olanzapine, Vytorin..

//One should be very reluctant to prescribe any supplements to anyone without having appropriate medical training //

Doctor and nurse shortages can be handled with changes in the licensing requirements. There are many waiting for a visa, too.

This is the Net, for God's sake. How do you know if someone is actually what they claim to be, or that they know what they claim to know? And even if they are medically knowledgeable
how can they prescribe for someone they've never seen? A supplement or medicine that works for one person can injure or kill someone else, and all of these are dose and time dependent.

Earlier today, I started a firestorm when saying that I was encouraged by the ISM and signs of stabilization.

mp:

aww, that was nothing. You should have seen what the board did to AllenM when he called the bottom 2 weeks too early...

Could #32 be the Federal Reserve Bank?

Kinda slip it in between a couple of nothingburger bank failures, maybe nobody would notice.

was there any tv coverage of Germany/Berlin's May Day riots?

my short answer to Paul Kasriel...

take a look at the chart for the 1970 recession.

In other countries today on May Day, the populace paraded against the powers that be, but here in America all we get is a parade of bank failures from the powers that be.

This is the Net, for God's sake. How do you know if someone is actually what they claim to be, or that they know what they claim to know? And even if they are medically knowledgeable

That's why you should look it up yourself. I'll gladly suffer someone to disagree with me, but if you can't even be bothered to do even the most basic of investigations into my recommendation, then I'll have to say I'm insulted and I think less of you for making a deliberate choice about your health out of intentional, self-inflicted ignorance.

mp,
TNT's guess at payroll = -575,000. Seems to me we have see much better than that before we can talk turnaround.

AP is now covering BFF: Yahoo! 404 - Page Not Found

You know, part of me really wants to see the UAW manage Chrysler, Design the cars , negotiate their contract with themselves, and see how long they last in business, how much their cars will be priced at.... and the wages that they get..... give em the rope and see what they make...

A lot of unemployed nurses in the Phillipines and elsewhere.

EHP

Manufacturing will flee now that they have an excuse. Outsourcing has picked up over the last year IMO...

["The ISM survey points to imminent economic recovery, possibly in 2009."]

2 words - Inventory. Correction.

No recovery in the household sector on the horizon to be seen with an intra-galactic telescope.

@EvilHenry

Could be. I'm not denying the possibility. I'm merely encouraged by the turnaround in the numbers. It shows this dive is shallowing, stabilizing--use whatever word you want.

I now think a recovery--however temporary--is possible.

Unsolicited testimonial dept. Supplementation can be the bomb, if it's the right stuff and you have a good doctor. I'm on choline bitartrate now, and it has totally taken away the lingering symptoms of hypothyroidism. (Along with Armour and Cytomel). I feel like myself for the first time in years. But I do have a good doc, finally, after years of misdiagnosis by people who, well, really screwed up.

Why would choline bitarate improve hypothyroid symptoms? Were you taking it for brain fog or mental confusion? It's generally used as an acetyl-choline precursor.

Not that I'm tracking it, but it probably is directly correlated to the strong USD, which I confess to believe is a temporary thing

"t shows this dive is shallowing, stabilizing--use whatever word you want.

I now think a recovery--however temporary--is possible."

I just don't see how anyone can equate stabilization with recovery at this point, without a catalyst for that recovery. I don't believe people will all of a sudden go back to their old ways, there has been too much wealth destroyed, and people will be too wary to get burned again.

I saw similar things in the wake of the dot-com bubble - every resting spot on the way down was viewed as a turnaround, but ultimate nothing happened until the housing bubble started to pick up.

@Hoops, yes, brain fog. I was undiagnosed for so long the hypo was beginning to effect my brain and nervous system. Edema damage, too. I got pretty close to the insane stage before I was finally diagnosed.

I think manufacturing is largely divorced from the recent American economy. Manufacturing ought to keep plugging along, but it is and always has been the service/retail/financial sectors which are the problems this time.

My situation is similar to Hoops, except I am a litigator so I have plenty of work and am sticking around. Stealth layoffs are negotiated on an individual basis such that there is some level of mutuality, at least in the first meeting.

The doctors like the lawyers, dentist, and other professions is not about qualified individuals but the restriction on how many can enter the profession each year. During WWII, do you think the govt put up with this...no, they trained as many individuals as possible who wanted to practice the profession...Its not the quality of the individuals, but the limitations place on entry into the field that is the issue...

reptillian (profile) wrote on Fri, 5/1/2009 - 3:50 pm

* reply
* Ignore user

Doctor and nurse shortages can be handled with changes in the licensing requirements. There are many waiting for a visa, too. Evil

"2) apparent recovery which fades out within 12-18 months like Japan post-1999"

I don't even think you have to go to Japan. Look at the experience here from 99 through 02. There were several brief periods of "recovery", even after 9/11, but nothing really took hold until the real estate bubble started to inflate at an increasing pace.

Stabilization, maybe. But I think a further drop is just as likely as a recovery, without a catalyst for that recovery.

reptilian,

you are smart... but in all honesty, maybe the cars dont need to be assembled at all... but maybe a employee owned car company would work....

reptilian,

its kinda like the US govt taking over banks in debt...there is an irony there big enough to drive a truck through

Chrysler is dead. It is Fiat run by the UAW and Obamaonoics. No products America will buy. R.I.P.

The Federal Reserve Bank, despite the name, isn't a bank. It's a government agency that supervises 12 country clubs, known as the Federal Reserve Banks. The members of the country clubs are all banks. Each Reserve Bank is owned by its member banks; the members elect a board of directors who hire the Presidents of the Reserve Bank. Five Presidents of the Reserve Bank have voting rights in the Federal Open Market Committee. When people talk about the balance sheet of the Federal Reserve; they mean the consolidated balance sheets of all twelve country clubs.

The way forward: insert your straw into the government capital pool and suck as much as you can.

"You made two good points people are still pricing in a recovery back to the mean. "

You know, for all the damn engineering and finance course I took in college, I always said my Psychology elective was the most useful one I took. I am certainly no shrink, but I do see a certain amount of "anchoring" in people, where they believe that sooner or later things will at least get back to the level they were. It takes a long time to disabuse people of that notion.

You see it in spades in the stock market - after the dot-com crash, it took people years to realize their CSCO stock was not going above $70 again anytime soon.

You are seeing it now in the housing market, even among the "professionals" like the GSEs. You know, at the beginning of the bust, the GSEs kept their ROE inventory off the market because they thought the market would rebound? They couldn't accept the fact that housing prices had dropped, and might not be coming back for a long time.

Don't get me wrong, hope is a great thing, but we have to be realistic. Why should our standards of living continue to rise? Why should the level of economic activity get back to the level it was? How the hell are we going to pay back all the debt we have borrowed?

I just don't see any answers right now.

Very strange change in patterns here in No. VA. Went out to pickup the pizza and traffic was half of what it usually is. The pizza place. down by 50%. Flue fears?

ghostfaceinvestah:

While our new level of consumption will be lower for a while; improvements in productivity will eventually increase our standard of living, though not as quickly as we are currently used to. Still, the next decade will not be a joy ride; as we figure out how to redirect our consumption and investment into more sustainable patterns.

"Stabilization." Things will eventually stabilize, but perhaps at some new normal. Until we reach the "new normal," we don't really have any reference point from which to decide whether anything is "up" or "down." Obama has said, recently, that the FIRE economy that existed was unsustainable. Just a few months ago, the financial sector was the biggest part of the S&P 500; now it is the 5th largest sector, out of nine. Tech. is the largest now, health care is no. 2, energy is no. 3; those, too, may change places.

It was cheese and pepperoni with a lot of grease.

edit for sp

Anything with a captive audience (movie theatre, sporting event, concert, etc) is gonna suffer an outfluenza, as people stay away in droves, no matter the outcome of the lethality of Swine Flu

Why should our standards of living continue to rise? - GFI

The first house I lived in, back in the 1950's, was a dogtrot with a 'two holer' in the back yard. Washing machine on the porch, draining into the tomato patch. No insulation, no drywall, look down and you can see the ground through the cracks in the floorboards. We kids ran around with chiggers and worms, never thought anything of it. So, my current standard of living would have to fall a very long way to make me really scared.

@Hoops, yes, brain fog. I was undiagnosed for so long the hypo was beginning to effect my brain and nervous system. Edema damage, too. I got pretty close to the insane stage before I was finally diagnosed.

Scone - take fish oil, that will help with the brain fog too.

Believe it or not, creatine, 3-5 grams per day, also improves mental function, but it takes ~6 months to work. People with kidney problems shouldn't take creatine, so get your kidney clearance checked with your doc before starting on it.

@ Hoops, I take the fish oil, 2 grams every day. Creatine makes the edema worse, so I can't go there. DMAE is good, but the dreams are a little too much like an acid trip at my age!

Basel Too, at my school I'd say the denial is more like 90%. Graduation in a week and it should be interesting to see if anyone will acknowledge the collapse. What's more morbidly amusing is that applications are way up from all the college students looking to avoid entering the job market. As if 3 years from now biglaw will bounce back to "normal."

Bearly,

kinda my point but if BO is going to fire folks and give away a company, i'd like to prove, if possible , that the UAW is really their own worst enemy...

And yes i used to manage Teamsters and UAW at separate companies..

Used to do work at GM and Ford plants during shutdowns...

Had my rodeo windows knocked out, and was asked to remove my car from a GM plant during a shut down by a newly elected shop steward. While he was beside me and the GM management, i opened the door to my rodeo got the name of the indiana plant it was built and called information...asked to speak to the local union... (UAW) and explained that one of his brothers at GM in Atlanta didnt feel their union produced equal cars... it was a riot....

Recovery ?

Looks like Cali is going to shoot down the budget filling initiatives on the ballot ...

State, local, everywhere will be laying off workers after their fiscal year is up ...

sanityclause,

I would appreciate it if you'd keep from speculating about which law firm I'm working for. It's what makes my candid participation here possible. Thanks.

"the begining of the horizontal on the L shaped "recovery""

~~~

I think we have another leg down ... not as steep but lower economic activity still ...

What is that I smell?

Credit addiction?

YouTube - Lynyrd Skynyrd - That Smell (live '77)

ghostface

what did you choose engineering or finance?

Chrysler wanted to sell itself to... anyone

Detnews.com | This article is no longer available online | detnews.com | The Detroit News

Before filing for bankruptcy protection Thursday, Chrysler LLC in recent weeks sought to sell parts of the company to Chinese companies and explored partnerships with nearly every major automaker over the past two years -- including Toyota Motor Corp.

Arbitrage_Macht_Frei

Yep ... the hope\fear whipsaw ...

When that doesn't work they change the rules ...

Everybody has to scramble anyway ...

And waits in dread of the next rule change ...

On Chrysler
Source: thetruthaboutcars blog which a good auto blog

According to AN, the following plants will be part of “Bad Chrysler” and will be shuttered by 2010 (employee numbers from AP):

Sterling Heights Assembly Plant, MI (hence the welcome Sebring/Avenger deaths, 1,400 employees)
Detroit Axle, MI (1,650 employees, already scheduled for closure)
Conner Avenue Assembly (Detroit), MI (Viper, 115 employees)
St. Louis North Plant, MO (Ram, 1,200 employees)
Kenosha Engine, WI (850 employees)
Twinsburg Stamping Plant, OH (1,250 employees)
Newark, Del (idled)
St. Louis South (idled)
And the “Good Chrysler” plants are:

Toluca, Mexico
Saltillo, Mexico
Brampton, Canada
Windsor, Canada
Toledo North, OH
Toledo Supplier Park, OH
Warren Truck, MI
Jefferson Avenue, MI
Belvidere, IL
Dodge Sprinter facilities in Ladson, SC

The Germans, to the best of my knowledge, where masters at the hope/fear game for a few years back in the 1940's.

WSJ: Citi Needs "Up to $10 Billion" in Capital

My friend's 14 month old son got a flu, and his wife felt it prudent to go to the hospital last Friday.

She (she's in nursing school) said it was a full-blown Hispanic-Panic, people arriving in ambulances that looked fine, and demanding to be seen by a doctor, that ended up waiting for hours in the waiting room.

The Lemming State of America, sadly.

The california legislature intends to be in a different state when they retire, after they'v egotten rich from raping the state

Eh, Homedad, this is a little embarassing, but could you give me your credit card number, so, you know, in case of , well, the worst, we would have a third party payer.