Small Banks' Reckoning Day Is Coming

Does anyone believe Bernanke that the economy is on the way to recovery...... I cannot wait for the delinquency rates 12 month from now ( especailly in the condo segment ) . More from Mish Four Dozen Georgia Banks On Problem List , Phoenix Commercial Real Estate Financier Files Bankruptcy & the WSJ BofA, LaSalle Pact Boosts Problem-Loan Load via Calculated Risk

Diese Thematik ist in Deutschland bisher nicht sonderlich behandelt worden. In unsere Schlagzeilen schaffen es meist nur die großen Investmentbanken und die Bankentitel die sich im S&P 500 tummeln. Mindestens ebenso bedeutend ist aber für das volkswirtschaftliche Bild was sich unter dem Radar bei den regionalen Instituten abspielt. Und hier droht die "Auffanggesellschaft" FDIC ( vergleichbar mit dem Bankensicherungsfonds ) eine fast nicht zu meisternde Aufgabe. Kein Wunder das hier seit Monaten verzweifelt Restrukturierungs und Abwicklungsexperten angeheurt werden um mit den Bankenpleiten fertig zu werden. Schon fast mitleidig zu beobachten wie die Fed und Bernanke hier die Wirtschaft schon wieder auf dem aufsteigenden Ast sehen. Ich hoffe eindringlich das dies wider besseren Wissen geschieht. Bin mir nach den bisherigen permanenten Fehleinschätziungen dieser Clowns da nicht so sicher. Mehr zu diesem Thema gibt es mal wieder vom unermüdlichen Mish Four Dozen Georgia Banks On Problem List & Phoenix Commercial Real Estate Financier Files Bankruptcy sowie dem WSJ BofA, LaSalle Pact Boosts Problem-Loan Load via Calculated Risk. Man darf sich schon einmal auf den Chart in 12 Monaten freuen.....

Small Banks' Reckoning Day Is Coming WSJ

Billions in Troubled Construction Loans Promise to Pose Test for Regional Lenders

According to the Federal Deposit Insurance Corp., $45.4 billion of the $631.8 billion in construction loans outstanding at the end of the first quarter were delinquent ....

Scores of banks were already suffering headaches by the end of the first quarter, according to a review by The Wall Street Journal of FDIC-filed reports by 6,919 banks that make construction loans. The smallest banks, those with total assets of less than $5 billion, faced the biggest problems ...

Nearly one in three of the banks analyzed -- or 2,182 -- had construction-loan portfolios that exceeded 100% of their total risk-based capital, a red flag to regulators, although it doesn't mean the bank is in danger of failing. ...

Even more alarming, 73 of those banks had construction-loan delinquency rates of more than 25%. Executives at all of the banks that responded to questions acknowledged the problems but expressed confidence they had the capital to weather the storm. ....

In 2007 and the first quarter of this year, U.S. banks wrote down just 0.7% of their residential construction and land assets as bad debt, according to Zelman & Associates, a research firm. Over the next five years that figure could rise to 10% and 26%, which would amount to about $65 billion to $165 billion, Zelman projects. ....

> Enjoy the must see clip from Asia on how the landscape/skyline can look like after the bubble has burst.....

> Das nachfolgende Video zeigt eindrucksvoll wie es demnächst wohl auch in einigen Teilen der USA aussehen dürfte.....

Here is one hot candidate for a ghost tower Bangkok stlye..... Leaning Tower of Padre

Hier ein ganz heißer Kandidat für die US Version ..... Leaning Tower of Padre

Condo Desperation.....Lehman Offers Money Back Guarantee

Thank god their balance sheet is strong...... :-) . For more insights on Lehman see what Mish has to say Questions Linger Over Lehman's Balance Sheet & April Fool's Offering At Lehman . I also recommend to take a view of the table Level 2 "mark to model" & Level 3 "mark to a hope & a prayer" .

Zum Glück ist deren Bilanz ja bekanntermaßen kerngesund........ :-) Wer mehr zu der "starken" Lehman Bilanz wissen möche wirft am besten einen Blick auf das was Mish zu sagen hat Questions Linger Over Lehman's Balance Sheet & April Fool's Offering At Lehman. Zudem empfehle ich einen kurzen Blick auf die Bilanzpositionen der großen US Banken Level 2 "markt to model" & Level 3 "mark to a hope & a prayer"

Condo Comfort / WSJ
In a move that speaks volumes about the glut in the condominium market, Lehman Brothers Holdings Inc. is promising some luxury-condo buyers their money back after three years of ownership.

The offer applies to some 200 condo units, priced between $480,000 and $2 million, in West Bay Club , a Lehman-owned resort community in Estero, Fla., near Naples on the Gulf of Mexico.

>Add the news via Calculated Risk and it is no wonder some are getting nervous....... Especially when you have a condo to sell in Miami

> Wenn man dann noch diese Daten via Calculated Risk hinzunimmt sollte es wenig verwundern das einige langsam aber sicher extrem nervös werden..... Das gilt besonders dann wenn man ein Condo in Miami verkaufen möchte

The new building comes on top of unprecedented supply....Lenders of all sizes have $42 billion of condominium debt on their books, according to Foresight Analytics. In just three months -- between the third and fourth quarters of last year -- the delinquency rate rose to 10% from 5.9%, says the Oakland, Calif., research firm.

In an effort to jump-start sales in a skittish market, Lehman says that for every buyer until June 1, it will guarantee that the resort will either sell or buy back the residence at the "full cost of the purchase price three years after closing."

> Charts & Stats via Inventory Tracker from my old friend Soldatthetop and his superb blog Paper Money

Naples, FL Condo Statistics

Current Count: 6863 Historical Low: 5547 Historical High: 7768 Average Range: $500,000.00 - $550,000.00 Median Range: $300,000.00 - $325,000.00 Listed Market Cap: $3,759,455,000.00

Statistics for Naples collected between 07-24-2006 and 04-23-2008

The gamble is that prices will recover during that time, and buyers will hold on to their condos.

A spokeswoman for Lehman said no one was available to discuss details of the guarantee program, which appears to exclude 10 penthouse units in two towers.

Jack McCabe, a real-estate consultant in Deerfield Beach, Fla., said other developers desperate to move unsold condo inventory might have to follow Lehman's lead in offering price guarantees as market values continue to slide and thousands more condo units in Florida come on line this year

> In the end it is probably still better to make this kind of creative offer to move inventory than to wait for things to get better........This will put lots of pressure on other players to match this kind of offer...Not good news for players like disaster stocks like WCI :-) It will be interesting to see how they will manage the accounting..... UPDATE: I also recommend to read this from Mish Condo Credit Squeeze

> Im Endeffekt ist diese Art des Marketings wohl immer noch eine der besseren Möglichkieten die Ladenhüter zu vertickern. Darauf zu warten das sich die Zeiten bessern dürfte extrem langwierig werden.... Das dürfte den Druck auf andere Speiler im Condomarkt erheblich verschärfen....Das dürfte dem übelsten Spieler WCI wohl demnächst den endgültigen Todesstoß versetzen. Man darf gespannt sein unter welchen Punkt solch geartete Geschäfte in der Bilanz auftauchen...... UPDATE: Zum Themenkomplex Condo´s sollte man zudem noch mal einen Blick auf Condo Credit Squeeze via Mish richten

There Is Still Hope For Miami Condo Owners.... :-)

According to the latest report from the United Nation’s State of World Population there is a trend from rural to urban areas. So maybe all the doom and gloom about the condo glut in Miami is overblown and the investors have taken a ( very ) long term vision. sarcasm off ! :-)

Der Trend in Richtung Stadt hält unverändert an. Evtl. sind die ganzen Doom und Gloom Prophezeiungen in Sachen Miami Condo Überhang total falsch und die Investoren hatten seit jeher eine (sehr) langfristige Vision.(vorsicht Satire )


It will be fun to watch at what point such a study will be used from the NAR or other desperate builder, flipper to spin things.....Then you really know how desperate the situation is

Es wird lustig zu beobachten sein ab welchen Punkt diese Art Studie von Seiten der verzweifelten Eigentümer als Argument für den Kauf von Condo´s herangezogen wird....Spätestens dann sollte allen klar sein wie ausweglos die Lage ist.

I´ll bet this guy is already using it....Dieser Typ wäre ein Kandidat.... :-)

I´m so scared that i will considering to cover my WCI short...... :-)

Das ganze hat mich jetzt so verunsichert das ich ernsthaft überlege meine WCI Shortposition zu schließen..... :-)

Buyers Scarce, Many Condos Are for Rent / NYT

with the owner equivalent rent making up over 40% of the cpi number one can imagine the effect on the "phony" inflation number. should be excellent news for the fed to have an (lousy) occasion to lower rates..... for more on this topic visit the commentary form the 9th. jan. from charles hugh smith http://www.oftwominds.com/blog.html (you need to scroll down to the date)

da die miete (oder genauer gesagt die gefühlte miete) 40% des inflationskorbes ausmacht dürfte hier in nächster zeit ein gewaltiger entlastender effekt auf die (in der berechnung lachhaften) inflationszahlen zukommen. dürfte anlass für die fed sein die zinsen zu senken. mehr dazu unter dem 09. jan auf dem blog von charles hugh smith.(link s oben)

Expenditure category
---------------------------------
Food and beverages 15.7
Housing 40.9
Apparel 4.4
Transportation 17.1
Medical care 5.8
Recreation 6.0
Education/communication 5.8
Other goods & services 4.3
---------------------------------
Total, all items 100.0

After six weeks of failing to lure more than a couple of dozen buyers, Mr. Franco and his partner, Jeff Blum, joined the builders of nearly 6,000 condominium units in the Washington metropolitan area who have decided in the last three months to recast their projects as rental apartment buildings. ......

Since the middle of 2006, the frenzied condominium market here and in several other big cities like Las Vegas, Miami (just ask wci.....) and Boston has collapsed. Once roaring sales have slowed to a trickle, sparse inventory has mushroomed into a glut and soaring prices have flattened out and started falling. ......


At the end of 2006, 24,200 units were on the market in the Washington area, up from 13,000 at the start of 2005. Sales have slowed to 663 in the fourth quarter of 2006 from 3,520 in the first quarter of 2005......