“Federal Reserve Sees Economy Stabilizing - Huffingtonpost.com” plus 4 more |
- Federal Reserve Sees Economy Stabilizing - Huffingtonpost.com
- With Recovery Slow, Bank of England Sits Tight - New York Times
- Financial Institution CEOs See 1 Percent Annual Compensation Increase ... - MSN Money
- Camden National Corporation Named Among Top Mid-Tier Banks in U.S. - MSN Money
- UPDATE 1-Turk Telekom in talks with banks on loan - Forbes
| Federal Reserve Sees Economy Stabilizing - Huffingtonpost.com Posted: 10 Sep 2009 07:21 AM PDT About every six weeks the Federal Reserve issues the Beige Book. This is anecdotal information collected from each Federal Reserve district. It provides a good overview of the current situation in the economy. Let's take a look at what the report says. Residential real estate markets remained weak, but signs of improvement continued to be noted. Chicago, Richmond, Boston, and San Francisco observed an uptick in sales over the last six weeks, while sales in the Philadelphia District were described as steady. St. Louis commented that residential home sales had not improved. Most Districts reported that sales remained below the levels of a year earlier. However, Atlanta, New York, Cleveland, and Minneapolis documented some year-over-year gains in select markets. Most Districts noted that demand remained stronger at the low-end of the housing market. Boston, Cleveland, Dallas, Kansas City, Richmond, and New York indicated that the first-time home buyer tax incentive was spurring sales. However, Philadelphia did note an upturn in sales at the high-end of the market. Reports on house prices generally indicated ongoing downward pressures, although Dallas and New York noted some increases. Construction remained at low levels overall, although Chicago and Dallas reported a small increase in activity. The points made are consistent with the following charts of homes sales. New homes sales have bottomed and are showing a slight increase. Existing home sales increased at a good rate last month. While we are still seeing a year over year decline in housing prices, we are starting to see month to month improvement: The prices of single-family homes in 20 major cities rose a not-seasonally adjusted 1.4% in June, the second increase in a row after falling every month for three years, according to the Case-Shiller home-price index released Tuesday by Standard & Poor's. Commercial real estate is still having problems: Reports on commercial real estate markets indicated that demand for space remained weak and that construction continued to decline in all Districts. Atlanta, Philadelphia, Richmond, and San Francisco reported that vacancy rates increased, while rates held steady in the Boston and Kansas City Districts and were mixed in New York. Boston, Dallas, Kansas City, Philadelphia, and Richmond commented that the demand for space remained weak. Commercial rents declined according to Boston, Chicago, New York, Philadelphia, and Richmond. Rent concessions were reported in the Richmond and San Francisco markets, and Richmond noted that some landlords had postponed property improvements in an effort to conserve cash. Construction remained at very low levels, with modest improvements noted in public construction in the Chicago, Cleveland, and Minneapolis Districts. There's been a great deal written about the impending commercial real estate collapse. However, a closer look at the data indicates the word collapse is a bit far-fetched: U.S. banks have been charging off soured commercial mortgages at the fastest pace in nearly 20 years, according to an analysis by The Wall Street Journal. At that rate, losses on loans used to finance offices, shopping malls, hotels, apartments and other commercial property could reach about $30 billion by the end of 2009. While $30 billion is not good, it is hardly a fact on which to make calls for an apocalypse. In short, the market should be able to handle that. While other estimates place the total losses higher (at a maximum rate of $150 billion) it's still not a a level where we should be making doomsday predictions. And while there is also trouble in commercial mortgaged backed securities, the concern is over roughly $100 billion in total problem loans that will come due and have to be refinanced by 2012. That means the loans will have to be dealt with over a period of 2-3 years. While the development is not good and should not be applauded, this is a manageable disaster. Most Districts reported modest improvements in the manufacturing sector. Philadelphia, Richmond, Atlanta, Cleveland, and Chicago all reported slight-to-moderate increases in new orders. San Francisco indicated that new orders increased for manufacturers of semiconductors and other IT products, while orders declined for metal fabricators and petroleum refineries. Dallas noted that orders held steady, while St. Louis reported that manufacturing output continued to decline, but at a slower pace. Richmond, Atlanta, Chicago, and Minneapolis reported increases or planned increases in automobile and automobile-related production. Several Districts also noted increased production in the pharmaceutical industry. This has been a surprisingly uncovered series of stories. Consider these charts of the various Federal Reserve district's manufacturing surveys: The Empire State index (NY) has been increasing for several months and is now above 50. The Philly Fed index is right about expansion levels, as is The Richmond Fed's numbers. And the national ISM number is now above 50, indicating expansion in the manufacturing sector. Overall, manufacturing is showing clear signs of pulling out of the recession. Labor market conditions remained weak across all Districts, but several also noted an uptick in temporary hiring and a decline in the pace of layoffs. Richmond reported that most service-providing firms continued to cut employees, while Minneapolis and New York noted additional layoffs in the manufacturing sector. Cleveland reported modest job declines in the banking, commercial construction, and coal mining sectors. Further job cuts are expected in auto manufacturing according to St. Louis, and Dallas indicated further staff reductions are anticipated in the airline, energy, and residential construction sectors. Staffing firms in a majority of Districts reported a modest increase in the demand for temporary workers, although industry contacts in Boston also questioned whether these gains will persist. New York cited a modest pickup in temporary hiring for the legal and financial industries. Chicago noted an uptick in demand for workers in the healthcare and information technology industries. St. Louis and Minneapolis reported that federal stimulus funds have had a positive impact on construction and local government jobs. I analyzed the latest jobs report here. Here is a list of the conclusions from the article: 1.) The rate of job destruction has decreased since the beginning of the year. Remember that at the end of last year the beginning of this year, the economy was losing 600,000 jobs per month. To expect that figure to turn around and print a positive number within 6-9 months is highly unrealistic. In fact, it is most possible that we'll see job losses through the next 3-6 months. But the pace of job losses is decreasing which is good news. There is one important point with the unemployment rate: it is a lagging indicator. History shows us that on a year over year basis, GDP must turn positive before we can even think about a decline in the unemployment rate. As such, we're simply not in a position to be talking about a drop in the unemployment rate yet. Consumer spending remained soft in most Districts. The majority of Districts reported that retail activity was flat. Boston, Philadelphia, and Kansas City noted improvement in sales, but attributed the increase primarily to back-to-school purchases. Philadelphia, Chicago, Cleveland, and San Francisco observed that shoppers remained focused on essentials and continued to refrain from purchasing discretionary and big-ticket items. Kansas City and San Francisco noted weak restaurant sales. Richmond, Philadelphia, Chicago, Atlanta, and Boston remarked that retailer inventories were being closely monitored and were keeping them in line with low sales levels. While spending is soft, it has stabilized as these two charts demonstrate: Real (inflation-adjusted) retail sales have bottomed, as have Real personal consumption expenditures. 1.) Housing sales have stabilized. 2.) Housing prices are still declining on a year over year basis, but have shown improvement over the last two months. 3.) The talk of a commercial real estate "implosion" is a bit far-fetched. There are problems but they are manageable. 4.) Manufacturing is now expanding. 5.) The labor market is still weak, but the rate of job loss continues to decrease and metrics within the jobs report (the number of people unemployed for specific lengths of time) is showing improvement. The latest Beige Book mentions in several places of an uptick in temporary help. Finally, the unemployment rate is a lagging indicator; it is unrealistic to talk of an improvement in the unemployment rate when GDP is still contracting. 6.) Consumer spending has bottomed.  This posting includes an audio/video/photo media file: Download Now |
| With Recovery Slow, Bank of England Sits Tight - New York Times Posted: 10 Sep 2009 07:43 AM PDT LONDON — The Bank of England decided Thursday to leave its benchmark interest rate at a record low of 0.5 percent, amid signs that the country's economy is recovering more slowly than in many other parts of Europe. The central bank also left its £175 billion, or $290 billion, program of buying bonds intact, following an agreement by finance ministers of the Group of 20 last weekend to leave such stimulus measures in place until there is broad evidence that the global economy is well on its way to recovery. "The U.K. is a very long way away from withdrawing stimulus," said Howard Archer, an economist at IHS Global Insight in London. "There are still very significant obstacles to long-term growth. The recovery will be slow and prone to relapses." The Organization for Economic Cooperation and Development last week predicted that Britain's economy would shrink 4.7 percent this year, more than it had forecast in June, while saying that the economies of the Group of Seven would contract 3.7 percent, less than forecast earlier. But Britain's housing and manufacturing sector have continued to show mildly encouraging signs and consumer confidence rose in Augusts, prompting some economists to characterize O.E.C.D. predictions as too pessimistic. Indeed, the National Institute of Economic and Social Research said earlier this month that Britain's economy had started growing again, and the British Chambers of Commerce raised its forecast for economic growth next year to 1.1 percent from 0.6 percent. It also cut its estimate for unemployment as the government's stimulus packages start taking effect. Consumer confidence rose to the highest in more than a year in August and services expanded at the fastest pace since September 2007 that month. But while Germany and France have already returned to growth, Britain's economy is held back by a still weak housing market, rising unemployment and banks that remain reluctant to lend despite government pressure, because they are grappling with rising loan losses and higher capital requirements. The Bank of England governor Mervyn King is keen to keep the stimulus package in place. Mr. King even wanted to expand the central bank's bond purchasing program to £200 billion but he was overruled by those who voted for a £50 billion increase to £175 billion, minutes of the Monetary Policy Committee meeting last month showed. At the same time, pressure is mounting on lawmakers to deal with Britain's ballooning budget deficit, especially ahead of a general election to be held before the middle of next year. Britain's finance minister, Alistair Darling, predicted earlier that the budget deficit would reach £175 billion, or $290 billion, in the year ending March 2010. That would be 12.4 percent of gross domestic product and the biggest deficit since World War II. Prime Minister Gordon Brown, lagging behind the opposition Conservative party in opinion polls, is leaving the challenging task of reducing the deficit to the next government. The ruling Labour party has hinted at a range of spending cuts in areas such as defense and infrastructure, which would only be implemented once the economy recovers. The Conservatives were even less clear about where spending cuts would be made except saying that it would protect spending on the National Health Service, troops in Afghanistan and overseas aid.  This posting includes an audio/video/photo media file: Download Now |
| Financial Institution CEOs See 1 Percent Annual Compensation Increase ... - MSN Money Posted: 10 Sep 2009 07:35 AM PDT Crowe Horwath releases survey results for current bank compensation trends OAK BROOK, Ill., Sept. 10 /PRNewswire/ -- As the economy has declined, so have the compensation increases for bank CEOs. According to the Crowe Horwath LLP's 2009 Comprehensive Financial Institution Compensation Survey, financial institution CEOs saw an increase of only 1 percent in total cash compensation during the past year, compared to a 4.7 percent increase in 2008. The survey, which compiled data from more than 320 U.S. financial institutions, is conducted annually by Crowe Horwath LLP, one of the largest public accounting and consulting firms in the U.S. Now in its 28th year, the survey found that base salaries for all financial institution positions increased an average of 2.2 percent in 2009. According to Timothy Reimink, a senior consultant in Crowe's performance group, the small increase in total compensation for CEOs masks a trend: in recent years, base salaries for CEOs have increased at rates faster than most other employees, while bonuses as a percentage of salary have declined. This year, independent bank CEOs received an average of $260,047 in total compensation. In addition to CEOs, several other job titles at financial institutions experienced either no growth or decreases in compensation for the same one-year period. Chief credit managers saw compensation shrink by 6.4 percent, branch managers saw a decrease of 5.8 percent and commercial loan officers saw no increase in compensation. According to Reimink, this trend in total compensation is partly due to the decline of bonuses in recent years. On the other end of the spectrum, overall compensation increased during 2009 nearly 20 percent for loan workout officers, 13.9 percent for top retail banking officers, 12.4 percent for top human resource officers and 10 percent for top loan managers. According to Reimink, these increases correspond to the current priorities of financial institutions. "It's not that surprising that the position most responsible for restructuring loans saw the largest rise in compensation as its responsibilities rose during the economic crisis. These results also show that financial institutions continue to highly value the executives, like top retail and loan managers, with the highest level of responsibility for driving business revenues," he said. Additional survey findings include:
"The survey data provides critical information to bank management and boards, to help ensure their compensation remains at fair and competitive levels," said Pat Cole, a senior manager in Crowe's performance group, who specializes in human resources consulting for financial institutions. "Right now, when motivating and retaining employees continues to be a top priority, competitive compensation is particularly important." In addition to the national survey, Crowe prepared regional compensation reports for the Midwest and Southeast, as well as state reports for Florida, Illinois, Indiana, Michigan, New Jersey and Ohio. To purchase the survey results, please visit http://www.crowehorwath.com/crowe/lp/compSurvey.cfm. About the 2009 Crowe Financial Institution Compensation Survey The 2009 Crowe Financial Institution Compensation Survey was completed by 322 financial institutions. Using data from April 1, 2009, the participant breakdown is as follows: 36 percent had less than $250 million in total assets, 27 percent had between $250 million and $500 million in total assets, 16 percent had between $500 million and $1 billion in total assets and 21 percent had more than $1 billion in total assets. Of the participants, 242 of the financial institutions were located in towns with populations of less than 100,000, while 80 were located in cities of more than 100,000. About Crowe Horwath Crowe Horwath LLP (www.crowehorwath.com) is one of the largest public accounting and consulting firms in the United States. Under its core purpose of "Building Value with Values(R)," Crowe assists public and private company clients in reaching their goals through audit, tax, risk and consulting services. With 25 offices and 2,500 personnel, Crowe is recognized by many organizations as one of the country's best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest networks in the world, consisting of more than 140 independent accounting and management consulting firms with offices in more than 400 cities around the world. SOURCE Crowe Horwath LLP Copyright 2009 PR Newswire  This posting includes an audio/video/photo media file: Download Now |
| Camden National Corporation Named Among Top Mid-Tier Banks in U.S. - MSN Money Posted: 10 Sep 2009 07:35 AM PDT Camden National Corporation has been named the 11th best performing mid-tier bank in the nation by USBanker magazine. As well, for the seventh consecutive year, Camden National Corporation (NASDAQ®: CAC; the "Company") has been ranked among the top 100 publicly traded mid-tier banks nationwide. Camden National Corporation, the parent company of Camden National Bank and Acadia Trust, N.A. is the only independent, Maine-based bank named in the top 100. "We are very pleased that our performance has been recognized by USBanker," notes Camden National Corporation President and Chief Executive Officer Gregory A. Dufour. "Our success can be attributed to our dedicated employees, loyal customers and shareholders who share in our dedication to provide community banking in the State of Maine." USBanker's annual ranking measures publicly traded banks, with assets between $2 billion and $10 billion, on a three-year average return on equity (ROE). For the period ending December 31, 2008, Camden National Corporation's three-year average ROE of 15.30% places the Company 11th in this annual ranking. This is an improvement from 20th at the end of 2007, 28th in 2006, 35th in 2005, 52nd in 2004, 59th in 2003, and 74th in 2002. By placing 11th, Camden National Corporation is currently US Banker's highest-ranking mid-tier bank in Maine and all of New England. Camden National Corporation, headquartered in Camden, Maine, and listed on the NASDAQ® Global Select Market ("NASDAQ") under the symbol CAC, is the holding company employing more than 400 Maine residents for two financial services companies including Camden National Bank (CNB), a full-service community bank with a network of 37 banking offices serving coastal, western, central, and eastern Maine, and Acadia Trust, N.A., offering investment management and fiduciary services with offices in Portland, Bangor, and Ellsworth. Located at Camden National Bank, Acadia Financial Consultants offers full-service brokerage and insurance services. Statements in this news release concerning future results, performance, expectations or intentions are forward-looking statements. Actual results, performance or developments may differ materially from forward-looking statements as a result of known or unknown risks, uncertainties, and other factors, including those identified from time to time in the Company's other filings with the Securities and Exchange Commission, press releases and other communications. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of said safe harbor provisions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Except as required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made. Camden National Corporation Copyright 2009 Business Wire  This posting includes an audio/video/photo media file: Download Now |
| UPDATE 1-Turk Telekom in talks with banks on loan - Forbes Posted: 10 Sep 2009 07:28 AM PDT
ISTANBUL, Sept 10 (Reuters) - Turkish fixed-line operator Turk Telekom said on Thursday it was in talks with banks on a loan to fund its Avea mobile phone unit. It gave no details about the nature of the loan, but banking sources close to the deal told Thomson Reuters LPC on Wednesday the company was seeking a $600 million, three-year syndicated loan. Proceeds could be used to refinance existing group debt, one of the bankers said. By 1355 GMT shares in Turk Telekom traded down 0.45 percent at 4.44 lira, underperforming the Istanbul blue-chip index . Turk Telekom's Avea mobile phone unit agreed a $1.6 billion financing in April 2007, according to Thomson Reuters LPC data. The company posted a 20 percent fall in first-half net profit in July as costs from Avea soared. Even though mobile revenues rose, Avea was hit by higher interconnection costs amid a fierce price war among Turkey's mobile phone operators. Avea is No. 3 in the market behind Turkcell and Vodafone. Turk Telekom is controlled by Dubai-based Oger Telecom and was listed on the Istanbul Stock Exchange in May 2008. Some 30 percent of its shares still belong to the Turkish government, while the remaining 15 percent are publically traded. (Reporting by Alexandra Hudson; Editing by Rupert Winchester) (alexandra.hudson@reuters.com; +90 212 350 7062; Reuters messaging: alexandra.hudson.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Neither the Subscriber nor Thomson Reuters warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other information, is provided by Thomson Reuters and its third party content providers for your personal information only, and neither Thomson Reuters nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.  This posting includes an audio/video/photo media file: Download Now |
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