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Discussion on Inequality and Economic Growth

admin — Tue, 21 May 2013 12:09:45 +0000

From 6:30 to 8:00 PM ET, the will be a live stream of professors Tony Atkinson and Paul Krugman discussing inequality and growth at CUNY. The dialogue will be moderated by Chrystia Freeland.

As we endure the slow, uneven recovery from the “Great Recession,” there is no more critical or timely question than that of the relationship between economic growth and inequality. Join two preeminent economists as they assess the connection between prosperity for some and poverty for others. Paul Krugman is professor of economics at Princeton University, a Nobel laureate, and a New York Times columnist. He is the author of numerous books, including the recently published End This Depression Now! Sir Tony Atkinson, professor of economics at Oxford’s Nuffield College, is one of the world’s foremost scholars of inequality and author or editor of more than thirty books on inequality and related topics. He recently coedited Top Incomes: A Global Perspective, a volume that analyses high-end income inequality around the world.

Chrystia Freeland will be taking questions at #GCinequality

This is a very interesting topic. Intuitively it seems higher inequality should lead to slower growth (I think it would at the extreme!), but I’m not sure the relationship between inequality and growth is clear.

UPDATE: Here is a replay video (starts around 55 minutes into video):

Calculated Risk

Unofficial Problem Bank list declines to 770 Institutions

admin — Sun, 19 May 2013 10:06:03 +0000

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for May 17, 2013.

Changes and comments from surferdude808:

As anticipated, the OCC released its enforcement action activity through mid-April 2013 this Friday. What we did not anticipate was an early week failed-bank closure of another Capitol Bancorp’s banking subsidiaries after two were closed last Friday. Along with the failure, there were two other removals and two additions to the Unofficial Problem List this week. After changes, the list has 770 institutions with assets of 4.1 billion. A year ago, the list held 928 institutions with assets of 1.9 billion.

The OCC terminated actions against Liberty Savings Bank, F.S.B., Wilmington, OH (2 million) and First Federal Community Bank, Paris, TX (4 million); and issued actions against Mid-Southern Savings Bank, FSB, Salem, IN (8 million) and Midwest Federal Savings and Loan Association of St Joseph, Saint Joseph, MO ( million Ticker: SJBA).

In a rare Tuesday closing, the Arizona Department of Financial Institutions shuttered Central Arizona Bank, Scottsdale, AZ ( million Ticker: CBCRQ). The state banking department was prevented from closing the bank last Friday because of a legal challenge by Capitol Bancorp. By Tuesday, the state banking department was able to prevail, in part, because the bank’s Tier 1 leverage ratio had apparently fallen much lower than the 2.13 percent reported in the bank’s March 2013 Call Report. Meanwhile in Nevada, the Nevada Department of Business and Industry’s Financial Institutions Division was prevented from closing 1st Commerce Bank, North Las Vegas ( million) through another legal action by Capitol Bancorp. Reportedly, a preliminary hearing on the injunction stopping the closing will be held next Thursday. SNL Securities is reporting that Capitol Bancorp, in a bankruptcy filing, sold its remaining interest in Capitol National Bank, Lansing, MI (5 million) in April 2013 with the proceeds being held in escrow until the FDIC issues a cross-guaranty liability waiver.

Calculated Risk

Friday: Consumer Sentiment

admin — Fri, 17 May 2013 08:07:53 +0000

From the WSJ: To Buy Bonds or Not to Buy: Fed Hawks, Doves Air Views

The presidents of the Dallas, Richmond and Philadelphia Federal Reserve banks, long skeptics of the wisdom of the bond buying, said this week that they would like to see the purchases scaled back immediately.

And San Francisco Fed President John Williams, who has been enthusiastic about the merits of the program, said Thursday that he is still prepared to reduce the size of the purchases “as early as this summer.”

The president of the Boston Fed, meanwhile, suggested that there is a case that the Fed should be doing even more to boost the economy.

The article makes it seem like there is a significant split at the Fed. There isn’t.

Some Federal Reserve members carry more weight than others including Fed Chairman Ben Bernanke, Vice Chair Janet Yellen and NY Fed President William Dudley. I’d also pay the most attention to Charles Evans (Chicago Fed), Eric Rosengren (Boston Fed), and John Williams (SF Fed) and a few others. Richard Fisher (Dallas Fed) is entertaining, but has been mostly wrong about the economy.

The reality is there is little significant disagreement at the FOMC, and the I expect the bond purchases to continue at the current level through most if not all of this year.

Friday economic releases:
• At 9:55 AM, Reuter’s/University of Michigan’s Consumer sentiment index (preliminary for May). The consensus is for a reading of 78.0, up from 76.4.

• At 10:00 AM, Regional and State Employment and Unemployment (Monthly) for April 2013.
Calculated Risk

Why “A” Students Work for “C” Students

Marco Santarelli — Mon, 13 May 2013 22:05:24 +0000

As a member of our Investor Network, you know that I am a big fan of Robert Kiyosaki’s message and mission.

Robert is the best selling financial author in the history of the world. And now he’s released what he claims to be “the most important book I’ve ever written.“

The world’s educational system is mass producing job seekers. But sadly, it isn’t producing job creators. So it’s no surprise there aren’t enough jobs to go around.

Politicians may pander and point fingers, but the root cause of the problem needs to be identified and fixed. That’s what Robert is doing is this new book and you can be a part of the solution.

Read the rest of Why “A” Students Work for “C” Students »

For more articles like this, please visit our Real Estate Investing Blog.

Real Estate Investing with a Solo 401(k)

Dmitriy Fomichenko — Mon, 13 May 2013 21:00:18 +0000

The self-directed Solo 401k retirement plan offers powerful advantages for real estate investing. The Individual k or Solo 401k is an IRS-qualified retirement plan that has been simplified for the self-employed and small business owner. The structure of the plan gives participants more options than a traditional 401k. The Solo 401k’s investment capability, direct access, loan feature, and tax benefits make it the perfect vehicle for investing in real estate.

Read the rest of Real Estate Investing with a Solo 401(k) »

For more articles like this, please visit our Real Estate Investing Blog.

California Counties Top Foreclosure List

Marco Santarelli — Mon, 13 May 2013 17:00:32 +0000

With Inland Empire foreclosures at pre-recession lows, Riverside County’s foreclosure rate dropped to No. 21 statewide in April. A total 1,403 mortgage default notices, auction sale notices and bank repossessions were recorded in April, meaning 1 in 566 households was in some stage of foreclosure, according to Irvine-based RealtyTrac.

Of those, 45 were from Palm Desert, according to data provided by the organization to Palm Desert Patch. In Palm Desert:

One out of every 538 households received a foreclosure filing in April
That number was down by about 25% from March 2013, and down 55% from last April.
In April 2012, 100 households had been in default.

Read the rest of California Counties Top Foreclosure List »

For more articles like this, please visit our Real Estate Investing Blog.

Monday: Retail Sales

admin — Mon, 13 May 2013 04:08:16 +0000

Monday economic releases:
• At 8:30 AM ET, Retail sales for April will be released. The consensus is for retail sales to decline 0.3% in April, and to decline 0.1% ex-autos. Note: Some of the decline will be due to lower gasoline prices.

• At 10:00 AM, Manufacturing and Trade: Inventories and Sales (business inventories) report for March. The consensus is for a 0.3% increase in inventories.

Weekend:
• Mortgage Delinquencies by Loan Type in Q1
• Schedule for Week of May 12th

The Asian markets opened mostly red tonight, however the Nikkei is up over 1.0%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are down 4 and Dow futures are down 28 (fair value).

Oil prices are down slightly with WTI futures at .61 per barrel and Brent at 3.59 per barrel.

Calculated Risk

Bank Failures #11 & 12 in 2013: North Carolina and Georgia

admin — Sat, 11 May 2013 02:06:44 +0000

From the FDIC: Capital Bank, National Association, Rockville, Maryland, Assumes All of the Deposits of Pisgah Community Bank, Asheville, North Carolina

As of March 31, 2013, Pisgah Community Bank had approximately .9 million in total assets and .2 million in total deposits. … The FDIC estimates that cost to the Deposit Insurance Fund will be .9 million. … Pisgah Community Bank is the 11th FDIC-insured institution to fail in the nation this year, and the second in North Carolina.

From the FDIC: Synovus Bank, Columbus, Georgia, Assumes All of the Deposits of Sunrise Bank, Valdosta, Georgia

As of March 31, 2013, Sunrise Bank had approximately .8 million in total assets and .8 million in total deposits. … The FDIC estimates that cost to the Deposit Insurance Fund will be .3 million. … Sunrise Bank is the 12th FDIC-insured institution to fail in the nation this year, and the third in Georgia.

Two more …

Calculated Risk

Las Vegas Real Estate in April: Year-over-year Inventory decline slows

admin — Thu, 09 May 2013 00:05:44 +0000

This is a key distressed market to follow since Las Vegas has seen the largest price decline of any of the Case-Shiller composite 20 cities.

The Greater Las Vegas Association of Realtors reported Local home prices rise again, according to GLVAR report

GLVAR said the total number of existing local homes, condominiums and townhomes sold in April was 3,789. That’s up from 3,642 in March, but down from 3,924 total sales in April 2012. …
…
Another trend is the decline in foreclosures and short sales – which occur when a lender agrees to sell a home for less than what the borrower owes on the mortgage. In April, 32.5 percent of all existing local home sales were short sales, down from 33.3 percent in March. Another 10.0 percent of all sales were bank-owned properties, down from 11.2 percent of all sales in March. The remaining 57.5 percent of all sales were the traditional type, which was up from 55.5 percent in March.
…
The total number of properties listed for sale on GLVAR’s Multiple Listing Service increased in April, with 13,881 single-family homes listed for sale at the end of the month. That’s up 1.4 percent from 13,693 single-family homes listed for sale at the end of March, but down 22.4 percent from one year ago.

As for available homes listed for sale without any sort of pending or contingent offer by the end of April, GLVAR reported 3,161 single-family homes listed without any sort of offer. That’s up 11.3 percent from 2,839 such homes listed in March, but still down 24.1 percent from one year ago.
…
In April, GLVAR reported that 59.3 percent of all existing local homes sold were purchased with cash. That’s up from 57.5 percent in March and approaching the peak of 59.5 percent in February.
emphasis added

There are several key trends that we’ve been following:

1) Overall sales are down a little year-over-year, but …

2) Conventional sales are up sharply. In April 2012, only 33.2% of all sales were conventional. This year, in April 2013, 57.5% were conventional. That is an increase in conventional sales of about 67% (of course this is heavily investor buying, but that is still quite an increase in non-distressed sales).

3) There is a shift from foreclosures to short sales.

4) and probably most interesting right now is that the decline in non-contingent inventory (year-over-year) has slowed sharply. This suggests inventory is near a bottom.
Calculated Risk

CoreLogic House Price Index Up 10.5%

Marco Santarelli — Wed, 08 May 2013 12:00:18 +0000

CoreLogic today released its March CoreLogic HPI report. Home prices nationwide, including distressed sales, increased 10.5% on a year-over-year basis in March 2013 compared to March 2012. This change represents the biggest year-over-year increase since March 2006 and the 13th consecutive monthly increase in home prices nationally. On a month-over-month basis, including distressed sales, home prices increased by 1.9% in March 2013 compared to February 2013.

Read the rest of CoreLogic House Price Index Up 10.5% »

For more articles like this, please visit our Real Estate Investing Blog.