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To: goldsheet who wrote (85308)	5/10/2002 1:49:21 PM
From: long-gone	Respond to of 116822

<<WalMart sales were actually UP but not as much as expected>> Trick played often in Washington. When we don't get the rate of increase we want it is a decrease.

To: goldsheet who wrote (85308)	5/10/2002 3:50:09 PM
From: marek_wojna	Read Replies (1) \| Respond to of 116822

IMO it is important factor that US consumer debt rose 1.2 trillion US$ between 1999 and 2001. Credit cards debts in US I have hard time to track, but taking into account unemployment growing, yet according to official datas sales growing too, only at slower pace US banks sooner or later will look for the bailout or go Argentina style. <<< Of DOW JONES NEWSWIRES WASHINGTON -- A new Federal Deposit Insurance Corp. report identified subprime U.S. consumer lending as the single most likely source of significant losses related to the failure of FDIC-insured institutions in the near term. "Some 160 FDIC-insured institutions with 6.3% of industry assets are currently identified by the FDIC as having subprime consumer or mortgage loans greater than 25% of Tier 1 capital," the report said, saying this group has contributed disproportionately to recent bank failures and additions to the FDIC's Problem Bank List. "The problems of subprime lenders have not been simply the result of loan losses that are much higher than those experienced with prime consumer loans," the report said. "More troubling has been the tendency for the credit models used by subprime lenders to underpredict actual losses, as noted by FDIC examiners and other regulatory sources in recent months." The report cited two issues as representing intermediate-term risks that could materially affect industry earnings and insurance losses over the next one to three years. One issue involves U.S. metropolitan areas that have shown both a significant slowdown in economic activity and where banks tend to have high concentrations of traditionally higher-risk commercial and industrial loans, commercial real estate loans, and construction loans. "History shows that institutions with higher concentrations of C & I (commercial & industrial), CRE (commercial real estate), and construction loans have tended to fail at a significantly higher rate than other insured institutions," the report said. The report said the second risk involves specialized residential mortgage lenders that have developed concentrations of long-term assets as a result of two recent waves of mortgage originations and refinancing activity that peaked in 1998 and 2001, respectively. "Smaller institutions evidence the greatest increase in long-term asset concentrations and appear somewhat more vulnerable to rising interest rates," it said. More generally, the report said a number of factors call into question whether the U.S. economy will be able to generate a robust recovery in 2002. It said much of the recent good news has been related to consumer spending and that the boom in consumer spending has been fueled by events--including last year's tax cut, low energy prices, and the opportunity to refinance mortgage debt at lower rates--that may not reoccur in the near term. "In addition, consumers have incurred large amounts of new debt to maintain their spending," the report said, citing Federal Reserve data showing that the volume of mortgage and consumer debt outstanding rose by almost $1.2 trillion between year end 1999 and 2001. As for other warning signs, the report cited weakness in corporate profits, declining business investment, overcapacity in key industry sectors, and rising commercial real estate vacancies, among other things. The report termed the banking industry's performance "generally solid" despite rising credit losses. "To the extent that credit problems tend to lag the business cycle, bank credit losses may continue to rise for a number of quarters in the future," the report said. "However, at this time, the industry appears to be well positioned to weather the storm." The report said weaknesses in bank and thrift credit quality last year were generally concentrated in states along the upper and lower Mississippi Valley that rely heavily on the manufacturing sector and that have experienced the longest period of economic weakness. But it also said commercial real estate markets in many metropolitan areas around the country deteriorated rapidly during the year. "Bank credit exposures tend to be high in these formerly fast-growing metropolitan areas, which may well set the stage for higher credit losses in 2002," the report said. -By John Connor, Dow Jones Newswires>>