FDIC Report Suggests Biggest Drop in Lending Since The 1940s – The Atlantic
The FDIC released its Quarterly Banking Profile Report (.pdf). While it contains a lot of information, one pretty startling statistic that the Washington Post picks up on is that it implies a huge drop in lending in 2009 — $587 billion or 7.5%. The Post says this is the largest decline since the 1940s. That sounds pretty awful, especially considering that Washington has been trying to get banks to lend more. But let’s think a little more deeply about what’s really going on here.
CoreLogic: 24% of residential properties upside down – Rolfe Winkler
Subtract folks who owe more on their homes than they are worth and the home-ownership rate drops from 67% to 43%.
This isn’t merely academic. Having equity in their homes is a big reason homeowners keep paying their mortgage, which is necessary for banks to stay solvent.
FDIC Hits Record “Default” Level As Deposit Insurance Fund Plunges By $12.7 Billion To NEGATIVE 20.9 Billion – Zero Hedge
The Federal Deposit Insurance Corp. said Tuesday that its deposit-insurance fund fell to $20.9 billion at the end of 2009, a $12.6 billion drop in the final three months of the year, as bank failures continued at a pace not seen since the savings and loan crisis. The fund’s reserve ratio was -0.39% at the end of the quarter, the lowest on record for the combined bank and thrift fund.
Proposal Calls for Fannie, Freddie to Be U.S.-Owned Nonprofits – The Wall Street Journal
The Realtors’ proposal wouldn’t significantly alter two of the more controversial components of the companies’ infrastructure: their mandate to support affordable housing goals and their ability to maintain large investment portfolios. Critics say those elements fueled poor decision-making that contributed to their spectacular collapse.
Treasury to Resume the Monetization of the Fed’s Programs to Support the Wall Street Banks – Jesse
It looks very much like a stealth bailout. It is even more of a scandal because of the Fed’s resistance to any disclosures on the principles and specifics by which they are allocating taxpayer money.
Where this gets even more interesting is that the Fed in turn is buying Treasury debt after issuance through its primary dealers, debt that was issued by the Treasury to provide funds to the Fed.
Europe at risk of double-dip recession – Telegraph, Ambrose Evans-Pritchard
A blizzard of bad data from France, Germany, and Italy have raised concerns that Europe’s fragile recovery is stalling already, with mounting risks of a double-dip recession this year.
At F.D.I.C. , Bracing for a Wave of Failures – The New York Times
Despite resurgent profits and pay at the giants of American finance, many of the nation’s 8,000 banks remain under stress, according to a quarterly report the F.D.I.C. released Tuesday.
Scott Monroe of South Coast Apartment Association visits Jon Lansner of the OC Register (Audio)
Rents are falling fast.
Treasury Looks to Mandate Foreclosure Abatements, Mortgage Mods – The Big Picture
One of the most disappointing policy initiatives of the Administration to date has been the expensive and ineffective attempts to fight foreclosures at all costs.
