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Non-Tech : Banks--- Betting on the recovery -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (1069)	8/10/2010 12:29:08 PM
From: tejek	Respond to of 1428

See that's the problem.....the indicators are very mixed. Even here. This past winter in the commercial district near where I live a hundred unit mixed use project went under construction. At about the same time, another 50 unit mixed use project ran out of money and stopped construction. I don't know why the bank cut off the money but it doesn't look good. Having said that, generally things are better here. Despite the improvement in equity, the bay area remains one of the most troubled metros in the country. It has the third-highest percentage of mortgage-holders underwater among the 25 largest metro areas, trailing only Phoenix (66.8 percent) and Riverside, Calif. (49 percent). Miami-Fort Lauderdale is on Tampa Bay's heels, with a negative equity rate of 44 percent. On the flip side were markets like Pittsburgh, where only 5.6 percent of homeowners with mortgages are underwater. That's one more indication, Zillow said, of a huge disparity in housing recovery across the country. "As the national housing market limps toward stabilization, individual markets are a mixed bag," Zillow chief economist Stan Humphries said. "The double tax credits for some California home buyers have certainly stimulated housing demand there and are partly responsible for the rapid — and likely unsustainable — rates of appreciation in many markets across the state. "Markets in other parts of the country, like Miami, Detroit and Phoenix, are not yet showing signs of reaching a bottom in home values. High supply continues to be a challenge in states like Florida and Arizona."

To: Road Walker who wrote (1069)	8/10/2010 1:20:57 PM
From: tejek	Respond to of 1428

Here are two examples of what I meant. What's interesting both developers are talking about building new office towers in downtown Seattle which I find surprising. When WAMU folded, they released over a million sq ft of space on the downtown market. I know Safeco, a major office user, moved its headquarters into downtown in the last six months but I find it hard to believe that vacancies have been reduced enough to warrant new buildings. At one point last year, I read office vacancies downtown had risen to 16%. I doubt the vacancy rate is much lower now. Its interesting to note that on at least one development financing won't be coming from a bank. Not a good sign. Selig now proposes office building next to sculpture park seattletimes.nwsource.com Developer Touchstone talks about new plans for downtown Bellevue Superblock hotel-online.com

To: Road Walker who wrote (1069)	8/10/2010 1:27:06 PM
From: tejek	Respond to of 1428

Re: Small Business Outlook 8/10/2010 11:12 AM EDT Small businesses' main problem, according to the survey, is simply poor business conditions - weak sales that require cutting prices. (24% of business owners reported cutting prices, while only 12% reported raising them.) Not surprisingly, hiring intentions are very low, with only a net 2% planning to add to staff in the next three months. Lower interest rates or easier bank credit does not seem to be an issue. In fact, the survey notes, "...overall 91 percent of the owners reported all their credit needs met or they did not want to borrow, up one point. Only 4 percent reported financing as their top business problem." As such, any further moves from the Fed and/or exhortations for banks to extend loans to businesses whose main problem is weak sales may have little follow-through for meaningful improvement on the health of the small business sector. Also from the survey, to reiterate the concern over sales, the report notes, "The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months (versus the prior three months) lost one point, falling to a net-negative 16 percent, 18 points better than June 2009 but indicative of very weak customer activity." (More business owners reported falling sales versus rising sales.) The survey also notes that expectations for weaker sales outweighs expectations for higher sales over the next three months. As such, with weak sales expectations - due in part to price cuts - small businesses would be reluctant to borrow, regardless of the availability or cost of credit. That being the case, any moves the Fed might eventually make might be to spur a higher inflation expectation and increase the supply of money, rather than simply reduce borrowing costs, as I note in today's Day Ahead. This could stem the need for price cuts and possibly increase aggregate demand.