Goldman Sachs to Issue Commercial-Backed Debt Through TALF Program
Bloomberg, New York - Goldman Sachs Group Inc. may sell the first commercial-mortgage bond since June 2008, taking advantage of an untapped Federal Reserve program.
The five-year, $400 million loan to Developers Diversified Realty Corp. made by a unit of the New York-based bank is secured by 28 shopping centers. Developers Diversified Realty Corp. It will be used to repay debt on those properties and others, and to reduce the outstanding amounts of credit facilities, Developers Diversified said yesterday in a statement.
Commercial paper rises $35.8 billion to hint U.S. economy is growing
Editor’s Note: This is a good sign for now. In the article they mention that inventory levels have been drawn down and this may be the signal that companies are restocking and that is part of the incease in commercial paper activity. We will have to continue to watch this development almong others to see if this is a lasting change or just a blip.
News (Reuters):
The U.S. commercial paper market expanded in the latest week, suggesting the economy may be growing again after the longest recession in decades as the two-year-old global credit crisis slowly eases, analysts said.
OTS lifts order against commercial lender Brookline Bancorp
Business Jounral, Boston - Bank regulators lifted a months-long cease-and-desist order levied against a commercial lending unit of Brookline Bancorp. Inc. accused of maintaining inadequate anti-money laundering and other record keeping policies.
In February, the Office of Thrift Supervision issued the order against Eastern Funding LLC, a lender focused on coin-operated laundromats, small groceries, dry cleaners and parking lots. Eastern Funding accounts for less than 10 percent of the total assets of Brookline Bancorp, the parent of Brookline Bank.
Federal Reserve: Commercial Paper Outstanding Rises By $10.7 Billion This Week
Dow Jones, New York - The U.S. commercial paper market increased this week, reversing course after several weeks of declines, according to data released by the Federal Reserve Board on Thursday. This week, the outstanding level went up by $10.7 billion, after a decline of $27.6 billion last week.
The asset-backed portion of this short-term market did fall, though, by $3 billion. Last week, this part of the market grew by $900 million on a seasonally adjusted basis, after shrinking by $4.6 billion in the prior week.
Capital One credit card defaults rise to 9.41% in May
Editor’s Note: Consumers are tapped out and they are using credit as a necessity not its traditional role as a luxury. This is a sign of more distressed borrowers using credit without the ability to repay the debt and this is showing in higher default numbers. Until we see job creation in the U.S. spurred, we are going to see more continued credit card defaults.
Capital One Financial Corp’s U.S. credit card defaults rose in May as unemployment increased and Americans struggled to pay their debts, the company said on Monday. Defaults climbed even though the issuer of MasterCard and Visa credit cards changed its customer bankruptcy accounting and now is waiting longer to declare the debts of bankrupt customers uncollectible.
Hartford Financial to Accept as Much as $3.4 Billion Bailout From TARP
Editor’s Note: The more I read these stories, the more I am convinced that this recent rally is nothing but a bear market rally and we have much more pressing issue ahead for the U.S. economy. As far as I am concerned, nothing has structurally changed in our economy and there is significant liabilities outstanding that has not been addressed by our financial institutions and at this point we don’t have much to show for the amount of commitments the U.S. government has made to back our financial system. Interest rates are right back up and the banks are not in a much better position than they were. Until I see some large institutions fail, I do not believe we will see true confidence in this market.
News (Bloomberg):
Hartford Financial Services Group Inc., the insurer that’s raised capital from equity sales at least five times this decade, will accept as much as $3.4 billion in U.S. bailout funds and sell $750 million of shares. The stock fell 8 percent.
Fannie Mae Gross Mortgage Portfolio Shrank 19.2% In April
(Dow Jones) Fannie Mae saw its volume of refinanced mortgages drop in April to $45.5 billion from a high of $77 billion in March, its largest since 2003, according to a monthly report released Friday.
The mortgage giant’s investment portfolio shrank again, this time by 19.2%, keeping its total balance at $770.062 billion, well short of the curbs set by its regulator, according to the report from the company.