an educated man is unfit to be a slave
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Another day with FAZ is stuck in the mud at $5, wasn't exactly the 1 o'clock move I was looking for...
Looks to have stabilized intra-day here, perhaps we could see a move take place around 1PM est.
*Side note: BAC is red, -.08 at 10.99 currently*
Long FAZ @ 5.22 for a daytrade (at least)
FAZ +.14 => 5.70 (+2.52%) in pre-market here.
***Market Futures***
Dow -46.00
S&P -6.00
Nas100 -13.75
P.S. - Anyone watching the financial networks of CNBC or Bloomberg keep noticing that new bank commercial for "Ally" bank? If I recall correctly from an article I read in the Wall Street Journal, it's actually GMAC, renamed themselves to boost investor confidence...
Libya Says 50% Chance OPEC Will Cut Output at Vienna Meeting
By Flavia Rotondi and Adam L. Freeman
May 24 (Bloomberg) -- There is a “50 percent chance” OPEC will cut production quotas this week as the group seeks to reduce excess supply, a move that could help crude prices rise to more than $70 a barrel, Libya’s top oil official said.
“There is a fifty-fifty chance” for a production change at the OPEC meeting in Vienna on May 28, Shokri Ghanem, chairman of Libya’s National Oil Corp., said in an interview in Rome today.
Ghanem’s comment follows Saudi Arabian Oil Minister Ali al- Naimi saying yesterday that OPEC members will probably “stay the course” when they meet. His Algerian counterpart Chakib Khelil said in an interview today a production cut is not likely as he sought more discipline in complying with output targets.
The 12 members of the Organization of Petroleum Exporting Countries will update their policy on oil output at the meeting on May 28. At the last summit on March 15, the group decided to leave quotas unchanged and adhere to its earlier commitment to restrict supply by a total of 4.2 million barrels a day from levels in September 2008.
Oil has climbed 86 percent from a four-year low at the end of last year, reaching a six-month high of $62.26 on May 20 as OPEC implements record supply reductions to adjust to lower demand and rising stockpiles. The group will maintain a production target of 24.845 million barrels a day when it meets May 28, according to a Bloomberg survey.
Implementing the cuts and taking excess oil of the market may help prices stabilize, Ghanem said. “This will bring us back to normalcy and normalcy means it won’t go back to the high price we saw last year,” he said. “A price in the $70s will be achieved.”
Quota Compliance
Al-Naimi told reporters in Rome today that he’s “happy with compliance” of member states to output quotas. Adherence with as much as 80 percent of the agreed-to reductions is “the best we can expect.”
The 11 OPEC members bound by targets implemented 77 percent of planned output cuts of 4.2 million barrels a day in April, down from a revised 82 percent in March, the Vienna-based OPEC said May 13. The group cut its 2009 forecast and now estimates daily oil demand will fall by 1.57 million barrels, or 1.8 percent, to 84.03 million barrels a day this year.
More discipline by OPEC nations would allow production to be cut by about 800,000 barrels a day and reduce crude inventories held by the most industrialized nations to 52 to 53 days, from more than the current 60 days, Khelil said.
Crude inventories in the industrial economies of the Organization for Economic Cooperation and Development are at their highest since 1993, at 62 days of consumption, according to the International Energy Agency.
The three OPEC ministers were in Rome to attend a meeting of energy ministers of the Group of Eight nations.
To contact the reporter on this story: Adam L. Freeman in Rome at afreeman5@bloomberg.net; Flavia Rotondi in Rome at frotondi@bloomberg.net.
Last Updated: May 24, 2009 10:16 EDT
LINK: http://www.bloomberg.com/apps/news?pid=20601087&sid=altl0ApXuWGc&refer=home
FDIC premiums bitter medicine for local community banks
BY MATT OLBERDING/Lincoln Journal Star
Sunday, May 24, 2009 - 12:06:48 am CDT
In 2007, West Gate Bank paid no premiums to the Federal Deposit Insurance Corp.
In 2008, the Lincoln bank paid $160,000.
This year, with a special emergency assessment, which was finalized on Friday, President Carl Sjulin is estimating West Gate’s premium to be around $530,000.
“It’s a burden,” Sjulin said.
It’s also bitter medicine for banks that did little or nothing destructive to contribute to the unhealthy state of the nation’s banking industry.
“It’s a very difficult pill to swallow for Nebraska bankers,” Sjulin said. “We didn’t have anything to do with it, but we’re paying for it.”
That’s a sentiment expressed by community bankers around the country, as their FDIC premiums skyrocket.
The FDIC apparently heard their complaints, as it announced Friday that it would adopt a new system of special fees that will shift more of the burden to bigger banks to help replenish the deposit insurance fund.
“There will be some shifting of the burden (to major banks). The shift is not huge to them. We’re asking them to pay more,” FDIC Chairwoman Sheila Bair said.
The new FDIC emergency premium, to be collected from all federally-insured institutions, will be 5 cents for every $100 of a bank’s assets minus its so-called Tier 1, or regulatory capital, as of June 30. The FDIC’s previous planned fee was 20 cents per $100 of a bank’s insured deposits. A measure of a bank's health, Tier 1 capital includes common and preferred stock as well as intangible assets such as tax losses that can be used to reduce future earnings.
Because larger financial institutions tend to rely more heavily on funding from sources other than deposits, bigger banks would end up paying a heftier portion of the new assessment. FDIC officials estimated that of the $5.6 billion the agency is seeking to raise, as much as $500 million that would have been paid by smaller banks under the previous plan now could be absorbed by larger ones.
The regular quarterly assessment system falls harder on smaller banks, because it is based on the amount of deposits they hold and the overall health of the bank.
Wayne Abernathy, an executive at the American Bankers Association, told Reuters news service that insured deposits often make up less than 50 percent of the funding on larger banks’ balance sheets. But for smaller banks, he said, that percentage can reach as much as 90 percent.
Mike Jacobson, chairman, president and CEO of NebraskaLand National Bank and chairman of the Nebraska Bankers Association, said bankers large and small understand the need to shore up the FDIC fund.
“Every bank in the country is willing to do its part,” Jacobson said.
But those small banks are also chafing under the weight of the FDIC premiums, while at the same time realizing that the FDIC was partially responsible for the current situation.
“What banks are frustrated with is, they want to see good regulation and consistent regulation,” Jacobson said.
There seemed to be a time when some banks were held to a standard different from others, Jacobson said.
Big investment banks took loads of risk and weren’t required to have adequate reserves.
“There was a little bit of a breakdown in how those banks got reined in,” he said.
When those banks got into trouble last fall, the federal government allowed them to convert to bank holding companies.
That gave those banks access to federal funds, but it also brought their deposits into the FDIC fold.
“Trillions of dollars came into the insurance system ...” said Sjulin. “And now we have to insure these.”
That was one factor in the spike in FDIC insurance premiums.
Another was the FDIC’s decision last fall to temporarily raise the limit on insured accounts from $100,000 to $250,000, a move that has now been extended to the end of 2013. That helped instill confidence in depositors that their money was safe during a time of financial turmoil, but to be able to back up that guarantee, the FDIC needed bigger reserves.
The need for bigger reserves became evident over the past few months as bank failures started to rise.
Already this year, there have been 34 bank failures in the United States, according to the FDIC, more than the 25 in all of 2008. The 2009 tally includes the first failure of a Nebraska bank — Sherman County Bank — since 1989. There were only 27 bank failures nationwide from 2000-2007.
The FDIC insurance fund is meant to protect deposits when banks fail, so when bank failures rise, the government is forced to draw down the fund more.
In the fourth quarter of 2008, before any of the bank failures this year, the fund had already dropped 50 percent to $18.9 billion.
The FDIC now expects bank failures will cost the fund around $70 billion through 2013, up from a previous assessment of around $65 billion. The agency is hoping to raise $5.6 billion under the new fee system approved Friday.
The rise in premiums is having a huge affect on Lincoln’s Pinnacle Bank
Pinnacle, like West Gate, didn’t pay an FDIC insurance premium in 2007 nor for several years before that thanks to a credit many banks received from a change in banking laws in the late 1990s. In addition, the insurance fund was flush with cash due to the overall health of the banking industry. The credit expired last year, which meant the banks were set to start paying a premium once again.
Before the economic turmoil and bank problems of the past year, Pinnacle Bank president Mark Hesser said he was expecting to pay between $200,000 and $400,000 in FDIC premiums this year.
Now he estimates that number to be around $4.8 million, including the special assessment.
Pinnacle Bank’s first-quarter assessment, which is due in June, is more than $1.4 million.
“It’s a significant operating cost that will be taken on by Pinnacle Bank,” Hesser said, and one he expects to continue for several years to deal with one of the worst banking environments since the Great Depression.
Other local banks have seen a similar situation.
Cornhusker Bank’s first-quarter assessment was $130,000, compared with $7,000 last year. Union Bank will be paying $735,000 after paying nothing in the first quarter of 2008. TierOne’s assessment grew from $143,000 to more than $2.1 million.
Despite the increased premiums, John Dittman, chairman of Cornhusker Bank, is philosophical about the whole thing.
Yes it’s somewhat of a burden. No, his bank didn’t play a part in creating the mess.
“But we don’t have any control over that,” he said.
Far more important than finger-pointing, he said, is confidence in the FDIC.
“We are where we are,” Dittman said. “Everybody’s got to pay a little more, but that’s just the way it is.”
Reach Matt Olberding at 473-2647 or molberding@journalstar.com. The Associated Press contributed to this story.
FDIC premiums bitter medicine for local community banks
*Local banks have to pay for the greed of the larger banks, look for more consolidation in the banking industry...
FDIC premiums bitter medicine for local community banks
BY MATT OLBERDING/Lincoln Journal Star
Sunday, May 24, 2009 - 12:06:48 am CDT
In 2007, West Gate Bank paid no premiums to the Federal Deposit Insurance Corp.
In 2008, the Lincoln bank paid $160,000.
This year, with a special emergency assessment, which was finalized on Friday, President Carl Sjulin is estimating West Gate’s premium to be around $530,000.
“It’s a burden,” Sjulin said.
It’s also bitter medicine for banks that did little or nothing destructive to contribute to the unhealthy state of the nation’s banking industry.
“It’s a very difficult pill to swallow for Nebraska bankers,” Sjulin said. “We didn’t have anything to do with it, but we’re paying for it.”
That’s a sentiment expressed by community bankers around the country, as their FDIC premiums skyrocket.
The FDIC apparently heard their complaints, as it announced Friday that it would adopt a new system of special fees that will shift more of the burden to bigger banks to help replenish the deposit insurance fund.
“There will be some shifting of the burden (to major banks). The shift is not huge to them. We’re asking them to pay more,” FDIC Chairwoman Sheila Bair said.
The new FDIC emergency premium, to be collected from all federally-insured institutions, will be 5 cents for every $100 of a bank’s assets minus its so-called Tier 1, or regulatory capital, as of June 30. The FDIC’s previous planned fee was 20 cents per $100 of a bank’s insured deposits. A measure of a bank's health, Tier 1 capital includes common and preferred stock as well as intangible assets such as tax losses that can be used to reduce future earnings.
Because larger financial institutions tend to rely more heavily on funding from sources other than deposits, bigger banks would end up paying a heftier portion of the new assessment. FDIC officials estimated that of the $5.6 billion the agency is seeking to raise, as much as $500 million that would have been paid by smaller banks under the previous plan now could be absorbed by larger ones.
The regular quarterly assessment system falls harder on smaller banks, because it is based on the amount of deposits they hold and the overall health of the bank.
Wayne Abernathy, an executive at the American Bankers Association, told Reuters news service that insured deposits often make up less than 50 percent of the funding on larger banks’ balance sheets. But for smaller banks, he said, that percentage can reach as much as 90 percent.
Mike Jacobson, chairman, president and CEO of NebraskaLand National Bank and chairman of the Nebraska Bankers Association, said bankers large and small understand the need to shore up the FDIC fund.
“Every bank in the country is willing to do its part,” Jacobson said.
But those small banks are also chafing under the weight of the FDIC premiums, while at the same time realizing that the FDIC was partially responsible for the current situation.
“What banks are frustrated with is, they want to see good regulation and consistent regulation,” Jacobson said.
There seemed to be a time when some banks were held to a standard different from others, Jacobson said.
Big investment banks took loads of risk and weren’t required to have adequate reserves.
“There was a little bit of a breakdown in how those banks got reined in,” he said.
When those banks got into trouble last fall, the federal government allowed them to convert to bank holding companies.
That gave those banks access to federal funds, but it also brought their deposits into the FDIC fold.
“Trillions of dollars came into the insurance system ...” said Sjulin. “And now we have to insure these.”
That was one factor in the spike in FDIC insurance premiums.
Another was the FDIC’s decision last fall to temporarily raise the limit on insured accounts from $100,000 to $250,000, a move that has now been extended to the end of 2013. That helped instill confidence in depositors that their money was safe during a time of financial turmoil, but to be able to back up that guarantee, the FDIC needed bigger reserves.
The need for bigger reserves became evident over the past few months as bank failures started to rise.
Already this year, there have been 34 bank failures in the United States, according to the FDIC, more than the 25 in all of 2008. The 2009 tally includes the first failure of a Nebraska bank — Sherman County Bank — since 1989. There were only 27 bank failures nationwide from 2000-2007.
The FDIC insurance fund is meant to protect deposits when banks fail, so when bank failures rise, the government is forced to draw down the fund more.
In the fourth quarter of 2008, before any of the bank failures this year, the fund had already dropped 50 percent to $18.9 billion.
The FDIC now expects bank failures will cost the fund around $70 billion through 2013, up from a previous assessment of around $65 billion. The agency is hoping to raise $5.6 billion under the new fee system approved Friday.
The rise in premiums is having a huge affect on Lincoln’s Pinnacle Bank
Pinnacle, like West Gate, didn’t pay an FDIC insurance premium in 2007 nor for several years before that thanks to a credit many banks received from a change in banking laws in the late 1990s. In addition, the insurance fund was flush with cash due to the overall health of the banking industry. The credit expired last year, which meant the banks were set to start paying a premium once again.
Before the economic turmoil and bank problems of the past year, Pinnacle Bank president Mark Hesser said he was expecting to pay between $200,000 and $400,000 in FDIC premiums this year.
Now he estimates that number to be around $4.8 million, including the special assessment.
Pinnacle Bank’s first-quarter assessment, which is due in June, is more than $1.4 million.
“It’s a significant operating cost that will be taken on by Pinnacle Bank,” Hesser said, and one he expects to continue for several years to deal with one of the worst banking environments since the Great Depression.
Other local banks have seen a similar situation.
Cornhusker Bank’s first-quarter assessment was $130,000, compared with $7,000 last year. Union Bank will be paying $735,000 after paying nothing in the first quarter of 2008. TierOne’s assessment grew from $143,000 to more than $2.1 million.
Despite the increased premiums, John Dittman, chairman of Cornhusker Bank, is philosophical about the whole thing.
Yes it’s somewhat of a burden. No, his bank didn’t play a part in creating the mess.
“But we don’t have any control over that,” he said.
Far more important than finger-pointing, he said, is confidence in the FDIC.
“We are where we are,” Dittman said. “Everybody’s got to pay a little more, but that’s just the way it is.”
Reach Matt Olberding at 473-2647 or molberding@journalstar.com. The Associated Press contributed to this story.
ProShares UltraShort Real Estate seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Real Estate Index.
*** Hence time depreciation since its inception. ***
I noticed the P&F chart turned from bearish with a target of 8 to bullish with a target of 36:
It's at some serious resistance right now, so 12.50 could come before 16.50?
Australian Regulator Ends Ban on Shorting Financials (Update1)
By Shani Raja
May 25 (Bloomberg) -- The Australian Securities and Investments Commission will allow short selling of financial stocks from today after an eight-month ban gave banks, insurers and property-related stocks cover to boost their capital levels.
Macquarie Group Ltd., Goodman Group and Suncorp-Metway Ltd. were among companies that took advantage of the shorting ban to sell shares while shielded from “bear raids,” where successive short sales drive stock prices lower. Australian companies have raised $21 billion in equity sales this year, according to a Financial Times report citing Dealogic research.
“Bear raids were a concern in particular for companies with overleveraged balance sheets and vulnerable business models,” said Prasad Patkar, who helps manage about $850 million at Platypus Asset Management in Sydney. “Firms that needed to repair their balance sheets were able to do so without fear of their shares being targeted.”
ASIC banned short selling of all stocks in September as part of international efforts to contain stock market declines after Lehman Brothers Holdings Inc. collapsed and companies from Babcock & Brown Ltd. to Fortescue Metals Group Ltd. complained their shares were being manipulated. In November, the regulator lifted the ban on all but financial companies.
The prohibition, which was due to expire at the end of the week, was lifted from 10 a.m. today, the regulator said in an e- mailed statement.
Market Conditions
“ASIC has reviewed market conditions and considers that the balance between market efficiency and potential systemic concern has now moved in favor of the ban being lifted,” it said in the statement. “ASIC will not hesitate to reimpose the ban immediately and without consultation if it considers market conditions warrant such action.”
Australia permanently outlawed so-called naked short selling, with a few exemptions, in November, when it lifted the ban on covered short sales for most non-financial companies. The ban on short selling financial stocks was extended in January and then again in March.
In a short sale, traders borrow shares from a broker that they then sell. If the price drops, they buy back the stock, return it to the broker and pocket the difference. In a naked short sale, traders don’t borrow the shares.
“Removing the ban brings us in line with our global peers and sends the right message to global investors,” said Chris Weston, an institutional dealer at IG Markets in Melbourne.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
Last Updated: May 24, 2009 20:48 EDT
LINK: http://www.bloomberg.com/apps/news?pid=20601087&sid=al96GVFbtfgQ&refer=home
Australian Regulator Ends Ban on Shorting Financials (Update1)
By Shani Raja
May 25 (Bloomberg) -- The Australian Securities and Investments Commission will allow short selling of financial stocks from today after an eight-month ban gave banks, insurers and property-related stocks cover to boost their capital levels.
Macquarie Group Ltd., Goodman Group and Suncorp-Metway Ltd. were among companies that took advantage of the shorting ban to sell shares while shielded from “bear raids,” where successive short sales drive stock prices lower. Australian companies have raised $21 billion in equity sales this year, according to a Financial Times report citing Dealogic research.
“Bear raids were a concern in particular for companies with overleveraged balance sheets and vulnerable business models,” said Prasad Patkar, who helps manage about $850 million at Platypus Asset Management in Sydney. “Firms that needed to repair their balance sheets were able to do so without fear of their shares being targeted.”
ASIC banned short selling of all stocks in September as part of international efforts to contain stock market declines after Lehman Brothers Holdings Inc. collapsed and companies from Babcock & Brown Ltd. to Fortescue Metals Group Ltd. complained their shares were being manipulated. In November, the regulator lifted the ban on all but financial companies.
The prohibition, which was due to expire at the end of the week, was lifted from 10 a.m. today, the regulator said in an e- mailed statement.
Market Conditions
“ASIC has reviewed market conditions and considers that the balance between market efficiency and potential systemic concern has now moved in favor of the ban being lifted,” it said in the statement. “ASIC will not hesitate to reimpose the ban immediately and without consultation if it considers market conditions warrant such action.”
Australia permanently outlawed so-called naked short selling, with a few exemptions, in November, when it lifted the ban on covered short sales for most non-financial companies. The ban on short selling financial stocks was extended in January and then again in March.
In a short sale, traders borrow shares from a broker that they then sell. If the price drops, they buy back the stock, return it to the broker and pocket the difference. In a naked short sale, traders don’t borrow the shares.
“Removing the ban brings us in line with our global peers and sends the right message to global investors,” said Chris Weston, an institutional dealer at IG Markets in Melbourne.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
Last Updated: May 24, 2009 20:48 EDT
LINK: http://www.bloomberg.com/apps/news?pid=20601087&sid=al96GVFbtfgQ&refer=home
***Charts show several reasons to be bearish***
Here's a good one I found:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1926808&cmd=show
World Bank warns of social unrest
Page last updated at 13:24 GMT, Sunday, 24 May 2009 14:24 UK
The head of the World Bank has warned that the global economic crisis could lead to serious social upheaval.
"If we do no take measures, there is a risk of a serious human and social crisis with very serious political implications," Robert Zoellick said.
He pointed to Eastern Europe, which faces the "tricky situation" of fast-shrinking economies and protests.
Mr Zoellick suggested governments should start preparing for high levels of unemployment.
"In my opinion, in this context, nobody really knows what is going to happen and the best one can do is be ready for any eventuality," Mr Zoellick said in an interview with Spain's El Pais newspaper.
"There is also what I call the 'X-factor', that one can not foresee," such as the recent outbreak of swine flu, he said.
"Latin America has remained reasonably stable, even if Mexico and Central America are under pressure because they rely a lot on the North American market," Mr Zoellick added.
It was reported last week that Mexico's economy shrank by 8.2% in the first three months of this year compared with a year earlier. Mexico sends 80% of its exports to the US.
Other economies in Eastern Europe have registered double-digit declines in GDP, such as Latvia and Estonia, while the retiring Bank of England rate-setter David Blanchflower has said at least one million more people in the UK will lose their jobs.
The World Bank has previously warned of a "human catastrophe" in the world's poorest countries unless more is done to tackle the global economic crisis.
It said an extra 53 million people are at risk of extreme poverty.
LINK: http://news.bbc.co.uk/2/hi/business/8066037.stm
World Bank warns of social unrest
Page last updated at 13:24 GMT, Sunday, 24 May 2009 14:24 UK
The head of the World Bank has warned that the global economic crisis could lead to serious social upheaval.
"If we do no take measures, there is a risk of a serious human and social crisis with very serious political implications," Robert Zoellick said.
He pointed to Eastern Europe, which faces the "tricky situation" of fast-shrinking economies and protests.
Mr Zoellick suggested governments should start preparing for high levels of unemployment.
"In my opinion, in this context, nobody really knows what is going to happen and the best one can do is be ready for any eventuality," Mr Zoellick said in an interview with Spain's El Pais newspaper.
"There is also what I call the 'X-factor', that one can not foresee," such as the recent outbreak of swine flu, he said.
"Latin America has remained reasonably stable, even if Mexico and Central America are under pressure because they rely a lot on the North American market," Mr Zoellick added.
It was reported last week that Mexico's economy shrank by 8.2% in the first three months of this year compared with a year earlier. Mexico sends 80% of its exports to the US.
Other economies in Eastern Europe have registered double-digit declines in GDP, such as Latvia and Estonia, while the retiring Bank of England rate-setter David Blanchflower has said at least one million more people in the UK will lose their jobs.
The World Bank has previously warned of a "human catastrophe" in the world's poorest countries unless more is done to tackle the global economic crisis.
It said an extra 53 million people are at risk of extreme poverty.
LINK: http://news.bbc.co.uk/2/hi/business/8066037.stm
~~~~~~~COMPX 5/26/2009~~~~~~~
Previous Close 1692.01 -3.24
1675 SSKILLZ1
1648 FinancialAdvisor
Two Illinois Banks Seized, Bringing U.S. Tally This Year to 36
By Margaret Chadbourn and Ari Levy
May 22 (Bloomberg) -- Two Illinois banks with combined assets of almost $1 billion were closed by regulators, pushing the toll of failed U.S. lenders to 36 this year amid the longest recession since the 1930s.
Strategic Capital Bank in Champaign and Citizens National Bank in Macomb were closed and the Federal Deposit Insurance Corp. was named receiver of both, the FDIC said. Strategic Capital’s deposits were assumed by Midland States Bank of Effingham, Illinois, and deposits at Citizens National were purchased by Morton Community Bank.
“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage,” the FDIC said.
Regulators are closing banks at the fastest pace in 15 years, including BankUnited Financial Corp. in Florida yesterday, and pumped $200 billion into the biggest banks in a Treasury rescue program. Costs from closing banks in the second quarter climbed to more than $8 billion, including $4.9 billion for BankUnited, from $2.28 billion in the first, FDIC data show.
Midland States will buy $536 million of Strategic Capital’s $537 million in assets, with the FDIC sharing losses on about $420 million of them, the regulator said. Midland States will assume all of the failed bank’s $471 million in deposits. Strategic Capital’s lone office will open on May 26 as a branch of Midland States.
Morton Community Bank
Morton Community will buy $240 million of Citizens National’s $437 million in assets and signed a loss-sharing agreement with the FDIC on $200 million. Half of Citizens National’s $400 million in deposits will go to Morton Community, with the other $200 million in brokered deposits being paid directly to the brokers, the FDIC said.
Citizens National has offices in four Illinois cities, according to its Web site. The FDIC said they will open tomorrow as branches of Morton Community.
The failures are the fourth and fifth in Illinois this year. The FDIC estimates the seizures will cost the federal government’s deposit insurance fund a combined $279 million.
U.S. regulators are signaling that economic conditions are improving. FDIC Chairman Sheila Bair said May 12 that banks have “moved beyond the liquidity crisis” of last year.
“We are now in the cleanup phase,” Bair said in a speech in Washington. “But to be honest, there’s still more pain to go.”
Recession
The Commerce Department on April 30 said personal incomes fell in March for the fifth time in the past six months. The S&P/Case-Shiller Index of home prices in 20 major U.S. cities dropped in February, extending a decline that began in January 2007. The Labor Department May 8 reported employers shed 539,000 jobs in April, extending the decline to 5.7 million jobs since December 2007
The FDIC insurance fund is down 64 percent from its peak at the start of the second quarter last year, reflecting the shutdown of 22 lenders from April through December. The agency voted 4-1 today to impose a fee of 5 cents per $100 of assets, excluding Tier 1 capital, backing away from a proposal of 20 cents per $100 of insured deposits. The FDIC estimates the fee will raise $5.6 billion, lifting the fund from its lowest level since 1994.
U.S. regulators conducted unprecedented stress tests on 19 of the biggest banks, concluding on May 7 that losses could reach $599.2 billion in the next two years under economic conditions that are worse than economists forecast. The FDIC will report first-quarter bank earnings May 27.
FDIC-insured banks lost $32.1 billion from October through December, the first aggregate quarterly loss since 1990. The agency insures deposits at 8,305 institutions with $13.9 trillion in assets.
To contact the reporters on this story: Margaret Chadbourn in Washington at mchadbourn@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net.
Last Updated: May 22, 2009 20:16 EDT
LINK: http://www.bloomberg.com/apps/news?pid=20601087&sid=a5BRTZ86T0GM&refer=home
Two Illinois Banks Seized, Bringing U.S. Tally This Year to 36
By Margaret Chadbourn and Ari Levy
May 22 (Bloomberg) -- Two Illinois banks with combined assets of almost $1 billion were closed by regulators, pushing the toll of failed U.S. lenders to 36 this year amid the longest recession since the 1930s.
Strategic Capital Bank in Champaign and Citizens National Bank in Macomb were closed and the Federal Deposit Insurance Corp. was named receiver of both, the FDIC said. Strategic Capital’s deposits were assumed by Midland States Bank of Effingham, Illinois, and deposits at Citizens National were purchased by Morton Community Bank.
“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage,” the FDIC said.
Regulators are closing banks at the fastest pace in 15 years, including BankUnited Financial Corp. in Florida yesterday, and pumped $200 billion into the biggest banks in a Treasury rescue program. Costs from closing banks in the second quarter climbed to more than $8 billion, including $4.9 billion for BankUnited, from $2.28 billion in the first, FDIC data show.
Midland States will buy $536 million of Strategic Capital’s $537 million in assets, with the FDIC sharing losses on about $420 million of them, the regulator said. Midland States will assume all of the failed bank’s $471 million in deposits. Strategic Capital’s lone office will open on May 26 as a branch of Midland States.
Morton Community Bank
Morton Community will buy $240 million of Citizens National’s $437 million in assets and signed a loss-sharing agreement with the FDIC on $200 million. Half of Citizens National’s $400 million in deposits will go to Morton Community, with the other $200 million in brokered deposits being paid directly to the brokers, the FDIC said.
Citizens National has offices in four Illinois cities, according to its Web site. The FDIC said they will open tomorrow as branches of Morton Community.
The failures are the fourth and fifth in Illinois this year. The FDIC estimates the seizures will cost the federal government’s deposit insurance fund a combined $279 million.
U.S. regulators are signaling that economic conditions are improving. FDIC Chairman Sheila Bair said May 12 that banks have “moved beyond the liquidity crisis” of last year.
“We are now in the cleanup phase,” Bair said in a speech in Washington. “But to be honest, there’s still more pain to go.”
Recession
The Commerce Department on April 30 said personal incomes fell in March for the fifth time in the past six months. The S&P/Case-Shiller Index of home prices in 20 major U.S. cities dropped in February, extending a decline that began in January 2007. The Labor Department May 8 reported employers shed 539,000 jobs in April, extending the decline to 5.7 million jobs since December 2007
The FDIC insurance fund is down 64 percent from its peak at the start of the second quarter last year, reflecting the shutdown of 22 lenders from April through December. The agency voted 4-1 today to impose a fee of 5 cents per $100 of assets, excluding Tier 1 capital, backing away from a proposal of 20 cents per $100 of insured deposits. The FDIC estimates the fee will raise $5.6 billion, lifting the fund from its lowest level since 1994.
U.S. regulators conducted unprecedented stress tests on 19 of the biggest banks, concluding on May 7 that losses could reach $599.2 billion in the next two years under economic conditions that are worse than economists forecast. The FDIC will report first-quarter bank earnings May 27.
FDIC-insured banks lost $32.1 billion from October through December, the first aggregate quarterly loss since 1990. The agency insures deposits at 8,305 institutions with $13.9 trillion in assets.
To contact the reporters on this story: Margaret Chadbourn in Washington at mchadbourn@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net.
Last Updated: May 22, 2009 20:16 EDT
LINK: http://www.bloomberg.com/apps/news?pid=20601087&sid=a5BRTZ86T0GM&refer=home
Video Technical Analysis, bullish on SRS, starts at 7:00
http://www.stocktock.com/2009/05/23/video-update-equities-set-up-for-free-fall/
Another good video to watch, starts talking about the RIFIN at 5:30 and FAZ shortly thereafter...
http://www.stocktock.com/2009/05/23/video-update-equities-set-up-for-free-fall/
VIX reversal on both daily and weekly:
More or less, it basically means people are buying puts (betting the market will go down)
That's what she said!
Agreed 100%, enjoy your MEMORIAL day weekend gentlemen (and ladies if any are out their in ihub land)...
a FAZ close over 5.50 into the long weekend... could it be, could it be...? WOO WOO, 10 minutes to go
Volume is calling today's market bluff higher, this is going to break one way or another, and very soon at that!
Has anyone been paying attention to the put volume and prices on the financial/banking stocks the past 3 days? Someone is definitely hedging against a major downfall, also evidenced in the VIX rising from the grave...
GM is going bankrupt very soon... check the chart, AXL is confirming GM bankruptcy, as AXL likely wouldn't be too far behind!
I'm long FAZ, it's a great trading vehicle, especially for daytraders, but I'm hoping to catch the short-term trend here. In the past this has given FAZ gains of 150%+, I'm looking for that here off of the 4.62 bottom earlier this week.
So my target is $10+ if I'm right about the broader market, and especially the financials being ready to roll-over here through next week.
FAZ is never an intermediate to long-term hold. It's a -300% ETF, obviously this will be given a downward bias, even in a bear market. If you constantly have days of +1% and then -1%, rinse and repeat, do the math, the natural bias will erode the stock.
The idea is and always has been to play this type of ETF is as a daytrade or short-term trend play only. Look back at past gains it has had when the rest of the broader market dropped and tell me how that isn't tempting and a great trading vehicle to persue?
penny_ta: good stuff you've brought to the board lately, keep bringing it! I'm with you, a push over $10 would be ideal if the market is ready to roll-over here...
No that's not...
http://financial-dictionary.thefreedictionary.com/distribution+stock
Actually, I see the BAC offering in a different light. I believe the interested parties, those of course being other large banks were interested since they wish to control BAC. Many of them already having been short the stock, by gaining even more shares, they are giving themselves and their bank/firm more shares to borrow against to short into the next downfall.
Call it sinister, but everyone's got a motive when it comes to the stock market. Wouldn't be surprised if they were able to short it into the ground only later to have it taken out for pennies on the dollar.
To answer someone elses question about next week. I expect more of the same, we are also getting close to General Motors' bankruptcy, so it'll be interesting to see what kind of effects that has on the markets.
BAC 4th day in a row with a new intraday low, talk about distribution taking place!
Green even with the Dow up 60 points! When the market really starts to tank, FAZ is going to be on the top-gainers list, mark it!
Ideally, we hold about 5.41 here, bounce back up, test 5.50, break it, and don't see it again for at least a week (if not 2+) as momentum kicks in... this week has been an accumulation week for FAZ and a distribution week for all the bank stocks, it's especially evident on BAC.
No pump for BAC today during amateur-hour apparently, just going straight red, WFC following suit, and of course FAZ flat since GS and JPM are green.
9:42 EDIT - Now we are turning higher as I wrote this, +.06 to 5.47... GO GO GO!
9:43 +.09 to 5.50 - HERE WE GO !!! [ JPM and GS now RED! ]
~~~~~~~COMPX 5/22/2009~~~~~~~
Previous Close 1695.25 -32.59
1675 FinancialAdvisor
1654 SSKILLZ1
SRS weekly chart is giving me a potential buy signal here, most particularly like the position of the MACD on your chart frenchee, could be good for one of those 2+baggers like in the past:
BKUNA halted, but it's not apart of the Russell 1000 Financials, so I don't think it will directly affect FAZ.
They might be waiting until the offerings are gone, then BOOM!
Pimco says sell-off driven by fears U.S. could lose AAA
Thu May 21, 2009 2:40pm EDT
By Jennifer Ablan
NEW YORK (Reuters) - Bill Gross, the co-chief investment officer of bond giant Pacific Investment Management Co., said market fears that the U.S. is at risk of losing its AAA credit rating is sending the U.S. dollar, stocks and bonds under severe selling pressure on Thursday.
Asked what is driving the market declines, Gross told Reuters via email that investors fear the U.S. is "going the way of the U.K. -- losing AAA rating which affects all financial assets and the dollar."
Thursday, Standard & Poor's lowered its outlook on Britain to "negative" from "stable," threatening the nation's top AAA rating. Britain faces a one in three chance of a ratings cut as debt approaches 100 percent of gross domestic product.
European shares fell, weighed down by banks and commodities, as S&P's potential UK credit cut added to worries sparked by news on Wednesday that Federal Reserve policy-makers had cut their U.S. growth forecasts over the next three years.
The pan-European FTSEurofirst 300 .FTEU3 index of top shares fell 2.1 percent to 857.52 points, breaking five successive sessions of gains.
U.S. equities were down as well. The Dow Jones industrial average .DJI was down 182.55 points, or 2.17 percent, at 8,239.49. The Standard & Poor's 500 Index .SPX was down 21.26 points, or 2.35 percent, at 882.21. The Nasdaq Composite Index .IXIC was down 44.89 points, or 2.60 percent, at 1,682.95.
U.S. Treasury debt prices moved in sympathy with equities.
The benchmark 10-year U.S. Treasury note fell 47/32, with the yield at 3.3625 percent. The 2-year U.S. Treasury note dropped 2/32, with the yield at 0.8587 percent. The 30-year U.S. Treasury bond plunged 91/32, with the yield at 4.3106 percent.
In currencies, the dollar was down against a basket of major trading-partner currencies, with the U.S. Dollar Index .DXY down 1.01 percent at 80.369 from a previous session close of 81.190.
The dollar extended losses against the yen on Thursday, dipping below 94 yen for the first time in two months.
(Reporting by Jennifer Ablan; Editing by Theodore d'Afflisio)
LINK: http://www.reuters.com/article/ousiv/idUSTRE54K5GC20090521