Aug 29 2009
1,000 Banks–2 years (fun little vid)
http://www.cnbc.com/id/15840232?play=1&video=1228461315
Archive for August, 2009
Aug 29 2009
1,000 milk cows = $40,000 per month loss (If you concerns about the economy, this is one sector you better pray for)
U.S. Farm Profit Plunging on Lower Crop, Dairy Prices (Update3)
Share | Email | Print | A A A
By Alan Bjerga
Aug. 27 (Bloomberg) — Profits for U.S. farmers will plunge more than expected this year, dropping 38 percent from 2008 as the recession erodes demand for crops, livestock and dairy products, the government said.
Net farm income will sink to a seven-year low of $54 billion, down from a February forecast of $71.2 billion and last year’s estimated $87.2 billion, the U.S. Department of Agriculture said today in a report. Farm-product sales are dropping faster than costs for energy and feed, the USDA said.
The price of corn, the biggest U.S. crop, has plunged 46 percent in the past year, hog farmers lost an estimated $4.5 billion since September 2007, and dairy herds are being culled because of a milk surplus. Profits have declined for grain processors including Cargill Inc. and makers of farm equipment such as Deere & Co. and Agco Corp.
“Hogs were devastated by the H1N1 flu, and dairy isn’t getting off the mat,” said Bruce Babcock, the director of the Center for Agricultural and Rural Development at Iowa State University in Ames. “The outlook for crops is rosier.”
Falling Crop Values
Crop receipts will decline 9.8 percent to $164.7 billion, and livestock revenue will fall 15 percent to $118 billion, as input costs fall 6.4 percent, the USDA said.
The total value of farm production for 2009, which includes rent, government aid and other benefits from agricultural operations, is projected at $322 billion, down 12 percent from last year, the department said.
The report may signal a second straight year of lower farmland values, which fell 3.2 percent in 2008 after 21 years of gains, as well as less spending on farm equipment, said Dan Manternach, director of agricultural services at Doane Advisor Services Co. in St. Louis. Lower profits will probably have little impact on fertilizer or seed costs, he said in an e-mail.
Corn, wheat and soybean prices have plunged from records reached last year, and lower input costs aren’t helping farmers who made most of those purchases as early as one year ago, said Darrin Ihnes, who grows all three crops about 25 miles (40 kilometers) southwest of Sioux Falls, South Dakota.
‘Struggling’ Ethanol Industry
“The ethanol industry is struggling, the livestock industry is struggling, and crops are starting to struggle as well,” Ihnes said. Next year should be better as smaller herds help boost livestock prices and exports improve, he said.
Hog futures tumbled 36 percent in the past year through yesterday as the recession and an outbreak of H1N1 swine flu curbed pork consumption. Producers have lost an average $21 per animal sold for slaughter since September 2007, as feed costs rose to a record last year and the recession and the H1N1 virus curbed pork demand in 2009, Don Butler, the president of the National Pork Producers Council, said last week.
Producers including Smithfield Foods Inc. and Tyson Foods Inc. have culled their breeding herds to limit losses. Smaller hog farmers will need to do the same, said Dave Bauer, the president of Brite Futures Inc. in Milwaukee.
“As long as we continue to go down the same path that we’re going down now, pork producers are not going to see any income,” Bauer said. “Somebody has to go out of business here.”
In dairy, milk futures have plunged almost 50 percent from their June 2007 peak as record production and competition from imports flooded the market with inexpensive supply.
Dairy Losses
“I haven’t talked to a dairy farmer who isn’t losing money,” said Jim Goodman, an organic-milk producer who farms 500 acres about 70 miles northwest of Madison, Wisconsin.
Farms with at least 1,000 cows are losing $30,000 to $40,000 a month, Goodman said. Revenue from dairy products may fall 34 percent this year to $23 billion, while the value of meat animals will drop 11 percent, according to the USDA.
The agency this week said milk and egg prices will fall more than had been expected this year and meat costs will rise more slowly. Milk may decline 6 percent from last year, eggs may slip as much as 16 percent, while meat and poultry’s increase will be no more than 2.5 percent, the USDA said.
Among farm expenses, the cost of fertilizer will decline about 25 percent from last year to $16.9 billion, while pesticides will increase 2.6 percent to $12 billion, according to the government report. Petroleum costs will drop 30 percent to $11.3 billion.
Government subsidies will rise 3 percent in the first full year of a new farm bill to $12.6 billion.
The USDA plans to update its forecasts in November.
To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net
Last Updated: August 27, 2009 14:58 EDT
Aug 28 2009
Reatailers in a death spiral
Aug 28 2009
FDIC problem bank list grows…..
Aug 27 2009
Not one US bank on the list
Aug 27 2009
Real world results ‘inflation vs deflation’
Aug 25 2009
200 more bank failures
Analyst Bove sees 150-200 more US bank failures
Reuters
August 23, 2009: 04:51 PM ET
* New buying by foreign banks, private equity possible
* Fees could eat up 25 pct of banks’ pretax income in 2010
NEW YORK (Reuters) – A prominent banking analyst said Sunday that 150 to 200 more U.S. banks will fail in the current banking crisis, and the industry’s payments to keep the Federal Deposit Insurance Corp afloat could eat up 25 percent of pretax income in 2010.
Richard Bove of Rochdale Securities said this will likely force the FDIC, which insures deposits, to turn increasingly to non-U.S. banks and private equity funds to shore up the banking system.
“The difficulty at the moment is finding enough healthy banks to buy the failing banks,” Bove wrote.
The FDIC is expected on August 26 to vote on relaxed guidelines for private equity firms to invest in failed banks, after critics said previously proposed rules were too harsh and would actually dissuade firms from making investments.
Bove said “perhaps another 150 to 200 banks will fail,” on top of 81 so far in 2009, adding stress to the FDIC’s deposit insurance fund.
Three large failures this year — BankUnited Financial Corp in May, and Colonial BancGroup Inc, Guaranty Financial Group Inc in August — collectively cost the fund roughly $10.7 billion.
The fund had $13 billion at the end of March.
Regulators closed Guaranty’s banking unit on Friday and sold assets of the Texas-based lender to Banco Bilbao Vizcaya Argentaria SA. The FDIC agreed to share in losses with the Spanish bank.
Bove said the FDIC will likely levy special assessments against banks in the fourth quarter of this year and second quarter of 2010.
He said these assessments could total $11 billion in 2010, on top of the same amount of regular assessments. “FDIC premiums could be 25 percent of the industry’s pretax income,” he wrote. (Reporting by Jonathan Stempel; editing by Gunna Dickson)
Aug 25 2009
‘Court Orders’ (think it means anything)
Court Orders Federal Reserve to Disclose Emergency Loan Details
Share | Email | Print | A A A
By Mark Pittman
Aug. 25 (Bloomberg) — The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.
Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.
“The Federal Reserve has to be accountable for the decisions that it makes,” said Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee, after Preska’s ruling. “It’s one thing to say that the Federal Reserve is an independent institution. It’s another thing to say that it can keep us all in the dark.”
The judge said the central bank “improperly withheld agency records” by “conducting an inadequate search” after Bloomberg News reporters filed a request under the information act. She gave the Fed five days to turn over documents it told the reporters it located, including 231 pages of reports, and said it must look for more at the Federal Reserve Bank of New York, which runs most of the loan programs.
‘Involuntary Investor’
The central bank “essentially speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed,” Preska wrote. “Conjecture, without evidence of imminent harm, simply fails to meet the Board’s burden” of proof.
David Skidmore, a Fed spokesman who said the board’s staff was reviewing the 47-page ruling, declined to comment on whether the central bank would appeal.
Bloomberg said in the suit that U.S. taxpayers need to know the terms of Fed lending because the public became an “involuntary investor” in the nation’s banks as the financial crisis deepened and the government began shoring up companies with capital injections and loans. Citigroup Inc. and American International Group Inc. are among those who have said they accepted Fed loans.
‘Public Interest’
“When an unprecedented amount of taxpayer dollars were lent to financial institutions in unprecedented ways and the Federal Reserve refused to make public any of the details of its extraordinary lending, Bloomberg News asked the court why U.S. citizens don’t have the right to know,” said Matthew Winkler, the editor-in-chief of Bloomberg News. “We’re gratified the court is defending the public’s right to know what is being done in the public interest.”
The Fed’s balance sheet about doubled after lending standards were relaxed in the wake of the collapse of Lehman Brothers Holdings Inc. on Sept. 15, 2008. For the week ended Aug. 19, Fed assets rose 2.3 percent to $2.06 trillion as it continued to buy mortgage-backed securities under a program allowing the central bank to purchase non-government securities for the first time.
The U.S. House may vote as soon as next month on a bill to require the Fed to submit to audits by the Government Accountability Office, said Representative Scott Garrett, a New Jersey Republican on the Financial Services Committee.
‘Wake-Up Call’
The judge’s ruling “is strikingly good news,” Garrett said. “This is what the American people have been asking for.”
The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg suit, filed in New York, didn’t seek money damages.
“The public deserves to know what’s being done with the money,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press. “This ought to be a wake-up call for the public that they need to be far more educated about this.”
The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net
Last Updated: August 25, 2009 01:11 EDT
Aug 24 2009
New stages of housing crisis coming
Aug 22 2009
