Tag Archives: Banks

Lending and the Recovery

By Andrew Busch | Published: February 1, 2011

Yesterday, the Federal Reserve released their Senior Loan Officers Survey for Q1. BMO’s Jennifer Lee had these insights:

- stronger demand for C&I loans by large and medium-sized firms jumped in Q1. The “net percentage of domestic respondents reporting stronger demand for C&I loans” rose to 28.1, which is the first positive reading since 2010Q3 and the largest reading since 2005Q3. This must stem from companies needing loans to bulk up on M&E purchases that they can fully write off this year.
- fortunately, the banks continue to ease their lending standards, although the speed hasn’t picked up. The “net … …READ MORE

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An End to the Housing Crisis

By Andrew Busch | Published: September 1, 2010

Last week, we had disastrous reports on the housing market that were precipitated by the $8,000 first time home buyers credit. US existing home sales fell 27.2% and US new home sales fell 12.4% as buyers had moved forward their purchases. RealtyTrac reported that home foreclosures rose 4% in July to 325,229. Housing prices appear to have stabilized as the S&P CaseShiller index rose for June, but that was still under the influence of the tax credit. July/August could be ugly. We are not sure to what level housing sales will eventually gravitate towards, but the adjustment process is stomach … …READ MORE

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The Obama Redirect To Uncertainty

By Andrew Busch | Published: January 22, 2010

After a stunning loss in the Massachusetts Senate race and loss of the critical 60-40 split in the US Senate, President Barack Obama did not wait long to change tactics and go on the offensive. Yesterday’s bank plan announcement is a fascinating turn in the political discussion. While the details are still a bit sketchy, the rhetoric is not. The speech had a direct negative impact on the equity markets as the S&P 500 dropped 1.89% and the financial sector dropped 2.93%.

While I (and others) believe the agenda of the White House will be pulled more mainstream due to … …READ MORE

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Bad Bankers and Policy

By Andrew Busch | Published: December 14, 2009

Friday, the US House of Representatives passed their version of the financial regulatory reform package. By a vote of 223 to 202, the House followed much of what the White House wanted for the bill. The bill is broad in its scope from OTC derivative regulation to the creation of a new Consumer Financial Protection Agency (CFPA) to a new system for winding down failing financial institutions. The Senate is expected to move forward on their version next year.

Just weeks away from entering an election year, the Democratic leadership is pleased with delivering on a reform bill. At a … …READ MORE

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How The Treasury Can Sell So Much Debt For So Little For Now…..

By Andrew Busch | Published: October 30, 2009

It’s called carry, but not like currency carry. As most know, banks can fund themselves at 0.1%-0.25% as the Federal Reserve keeps Fed Funds at 0.0%-0.25%. Then banks are incentivized to find the safest, highest return they can with this cash.

Now, the US Treasury and the Federal Reserve hope that this low cost of funding to banks would make lending more attractive and incent banks to make new loans. As the Fed loan surveys show, this is now occurring and new lending is not being generated. This is a phenomenon that is not only occurring in the United States, … …READ MORE

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April's Cruelest Joke

By Andrew Busch | Published: April 1, 2009

Did anyone notice how grumpy all the financial CEOs looked after meeting with President Obama last Friday? The meeting must have been quite unpleasant as the Obama administration is informing these private sector giants that they need to change the way they are running their business. The government wants more lending and less executive pay. Also, several banks indicated that they want to return the original TARP money and the Obama administration is telling them no.

While it may not have been explicit, the implicit threat was large. The FDIC is in the middle of stress testing the 15 largest … …READ MORE

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Return to the Downside

By Andrew Busch | Published: March 30, 2009

Over the weekend, the bad news has returned with the volume turned up to a Spin Tap level of 11. This has shaken the equity markets hard. This is what I was concerned about last week and why I thought we’d trade ranges. To recap, my call was: “We’re going to need to spend time bouncing around in ranges from the S&P 500 (780-840) to the 10 year note (2.5% to 2.9%) to the US dollar (82-87) before we can gain certainty that the worst is over and that our past isn’t going to catch up to us.” Well, the … …READ MORE

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The Way Forward For Obama, Banks, and Taxes….

By Andrew Busch | Published: February 22, 2009

There are two developments over the weekend that investors and voters should be aware of for Monday. 

First, there remains confusion over exactly what Congress and the Obama administration are going to do over the financial sector of the United States.  There were rumors on Friday (and all of last week) that banks were going to be nationlized.  This promptly Obama spokesman Gibb to say late in the day that they believe banks should remain in private sector.  However, they had to do this because Sen. Dobb said that they may need to nationalize some banks at some point.  Today, … …READ MORE

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