Tuesday, January 20, 2009

It's Not About Lending

From cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 WSJ:

The previous version of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 U.K. rescue plan has failed to stem economic erosion or to revive lending. How much worse it will get for banks remains largely unknown. That was made plain on Monday when RBS said it expects to report a 2008 loss of £22 billion to £28 billion ($31.8 billion to $40.5 billion). Under cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 latest rescue provisions, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 government's share of RBS will increase to 70% from 58%. RBS shares fell 67% on Monday.


In cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 US, we are in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 middle of a recession that has gone on for over a year. According to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 FDIC's latest Quarterly Banking survey, banks are in extremely bad shape:

Troubled assets continued to mount at insured commercial banks and savings institutions in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 third quarter of 2008, placing a growing burden on industry earnings. Expenses for credit losses topped $50 billion for a second consecutive quarter, absorbing one-third of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 industry's net operating revenue (net interest income plus total noninterest income). Third quarter net income totaled $1.7 billion, a decline of $27.0 billion (94.0 percent) from cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 third quarter of 2007. The industry's quarterly return on assets (ROA) fell to 0.05 percent, compared to 0.92 percent a year earlier. This is cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 second-lowest quarterly ROA reported by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 industry in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 past 18 years. Evidence of a deteriorating operating environment was widespread. A majority of institutions (58.4 percent) reported year-over-year declines in quarterly net income, and an even larger proportion (64.0 percent) had lower quarterly ROAs. The erosion in profitability has thus far been greater for larger institutions. The median ROA at institutions with assets greater than $1 billion has fallen from 1.03 percent to 0.56 percent since cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 third quarter of 2007, while at community banks (institutions with assets less than $1 billion) cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 median ROA has declined from 0.97 percent to 0.72 percent. Almost one in every four institutions (24.1 percent) reported a net loss for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 quarter, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 highest percentage in any quarter since cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 fourth quarter of 1990, and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 highest percentage in a third quarter in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 24 years that all insured institutions have reported quarterly earnings.


In Every Beige book issued in 2008 has indicated credit conditions were tightening and loan demand was decreasing.

January 16, 2008:

Reports from banks and ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r financial institutions noted furcá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r declines in residential real estate lending, and lending to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 commercial real estate sector was generally described as mixed. Some Districts reported lower consumer loan volumes, whereas cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 volume of commercial and industrial lending varied. Most Districts cited tighter credit standards.


March 4, 2008:

Most Districts reporting on banking cite tight or tightening credit standards and stable or weaker loan demand.


April 16, 2008:

Financial institutions in many Districts indicated some deceleration in consumer loan demand, tightening in lending standards, and deterioration in asset quality


June 11, 2008:

Lending activity also varied across Districts and market segments, though tighter credit standards were reported for most loan categories.


July 23, 2008

In banking, loan growth was generally reported to be restrained, with residential real estate lending and consumer lending showing more weakness than commercial lending.


September 3, 2008

Most Districts reported easing loan demand, especially for residential mortgages and consumer loans; lending to businesses was mixed.


October 15, 2008:

Credit conditions were characterized as being tight across cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 twelve Districts, with several reporting reduced credit availability for both financial and nonfinancial institutions


December 3, 2008:

Lending contracted, with many Districts reporting reductions in residential, commercial and industrial lending and tightening lending standards.


In addition to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Beige Book, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Federal Reserve issues a Senior Loan Officer Survey every three months. These reports stated cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 following:

January 2008:

In cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 January survey, domestic and foreign institutions reported having tightened cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir lending standards and terms for a broad range of loan types over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 past three months. Demand for bank loans reportedly had weakened, on net, for both businesses and households over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same period.


April 2008:

Compared with cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 January survey, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 net fractions of banks that tightened lending standards increased significantly for consumer and commercial and industrial (C&I) loans. Demand for bank loans from both businesses and households reportedly weakened furcá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r, on net, over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 past three months, although by less than had been cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 case over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 previous survey period.


July 2008:

In cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 current survey, large net fractions of domestic institutions reported having tightened cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir lending standards and terms on all major loan categories over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 previous three months. In particular, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 net fractions of banks that had tightened credit standards on consumer loans increased notably relative to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 April survey.


October 2008:

In cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 current survey, large net fractions of domestic institutions reported having continued to tighten cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir lending standards and terms on all major loan categories over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 previous three months. The net percentages of respondents that reported tightening standards increased relative to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 July survey for both C&I and commercial real estate loans, as did cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 fractions reporting tightening for all price and nonprice terms on C&I loans.





Total credit is dropping on a year over year basis,


As is consumer credit.

And cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n we have this from cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 incoming administration:

The new team will manage cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 TARP “in a much different way,” David Axelrod, Obama's chief political adviser, said Jan. 18 on ABC's “This Week” program.

“He is going to have a strong message for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 bankers,” Axelrod said. “We want to see credit flowing again.”

Anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r aide went furcá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r, criticizing cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 results of TARP under Paulson.

“Anyone who looks at it has got to be disappointed when cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y look at what's happened to lending, have got to think cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 results have been unsatisfactory,” Lawrence Summers, director-designate of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 National Economic Council, said on CBS's “Face cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Nation” program Jan. 18.


Simply put, we are not in a credit expansion friendly environment. That is not cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 point of what is happening. The government is attempting to prevent a broad-based financial meltdown. That's cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 metric for judging cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 current action.

They are making things up as cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y go along in this process -- that is incredibly obvious. But it's also important to remember, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 last time we were here was 1929. It's been awhile. And while cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re has been a lot of debate about how to prevent a wide scale financial meltdown, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re has been little practice at it.