The LIBOR and Fed Funds forecasts have been updated.
July 23rd, 2008 - Posted by David in News - General | No Comments »
The beige book has been released. Highlights:
Consumer spending was reported as sluggish or slowing in nearly all Districts, although tax rebate checks boosted sales for some items. Tourist activity was mixed, with residents in several Districts choosing to vacation closer to home due to high gasoline prices. The demand for services was also mixed across Districts, with strength in the IT and health care industries offsetting some weakness in other service sectors. Manufacturing activity declined in many Districts, although demand for exports remained generally high. Residential real estate markets declined or were still weak across most of the country. Commercial real estate activity also slowed or remained sluggish in a majority of Districts, although a few Districts noted slight improvement. In banking, loan growth was generally reported to be restrained, with residential real estate lending and consumer lending showing more weakness than commercial lending. Districts reporting on agricultural activity said conditions were mixed, based largely on how June precipitation affected them. Districts reporting on the energy sector said it continued to strengthen.
All reporting Districts characterized overall price pressures as elevated or increasing. Input prices continued to rise, particularly for fuel, other petroleum-based materials, metals, food, and chemicals. Retail price inflation varied across the country, with some Districts reporting increases but others noting some stability, at least for the present. Wage pressures were generally limited in most Districts, as labor market demand was soft except for highly skilled workers and in the energy sector.
Total consumer credit increased by $7.8 billion in May. Revolving credit was up $5.6 billion, or 7.1%, which compares to a revised decrease of 0.5% in the previous month. Non-revolving credit rose $2.1 billion, or 1.6%.
June 6th, 2008 - Posted by David in News - General | No Comments »
Total consumer credit rose $8.9 billion in April, up an annualized 4.2% from the previous month. Revolving credit was up just $0.3 billion, or 0.4%, while non-revolving credit was up $8.7 billion, or 6.5%.
Deteriorating asset quality concentrated in real estate loan portfolios continued to take a toll on the earnings performance of many insured institutions in first quarter 2008. Higher loss provisions were the primary reason that industry earnings for the quarter totaled only $19.3 billion, compared to $35.6 billion a year earlier. FDIC-insured commercial banks and savings institutions set aside $37.1 billion in loan-loss provisions during the quarter, more than four times the $9.2 billion set aside in first quarter 2007. Provisions absorbed 24 percent of the industry’s net operating revenue (net interest income plus total oninterest income) in the quarter, compared to only 6 percent in the first quarter of 2007. The average return on assets (ROA) was 0.59 percent, falling from 1.20 percent in first quarter 2007. The first quarter’s ROA is the second-lowest since fourth quarter 1991.
The U.S. mortgage lending industry totaled $10.5 trillion in loans outstanding at the end of 2007.
Over the last 3 years, the mortgage debt outstanding grew at a 10.3% compound annual growth rate. However, the growth rate has gradually been declining. Annualized growth of mortgage debt was 13.1% in 2005, 11.1% in 2006, and 6.6% in 2007.
There are over 50,000 mortgage brokers in the United States, originating over 50% of mortgage loans. Thousands of banks originate home loans and home equity lines of credit. However, the mortgage lending industry is largely dominated by Fannie Mae and Freddie Mac, with Fannie Mae having $2.8 trillion in mortgage debt held or securitized at the end of 2007 and Freddie Mac having $2.1 trillion (or 23.8% and 17.8% of the total mortgage debt outstanding, respectively).
$2.4 trillion in new single-family mortgages were originated in 2007, down from $3.0 trillion in 2006 and $3.1 trillion in 2005. Total originations by the mortgage lending industry may drop below $2 trillion in 2008 due to slowing economic growth, falling home prices, and the continuing credit crunch which has resulted in more stringent approval criteria for mortgage applications than in recent years.
Approximately 21% of mortgage originations in recent years were subprime mortgages, up significantly from 9% of total originations from 1996 through 2004.
This post uses data from various government publications, the Mortgage Bankers Association, Moody’s, and the National Association of Mortgage Brokers.
May 24th, 2008 - Posted by David in Auto Lending News, Credit Card Lending News, Debt Collection News, Mortgage Lending News, News - General, Student Lending News | No Comments »
The analysis on the size of the consumer lending industry has been updated.
Consumer credit rose $15.3 billion in March to $2.56 trillion, an increase of 7.2% (annualized).
Credit cards and other revolving debt rose $6.3 billion, while installment debt rose $9 billion from the prior month.
April 12th, 2008 - Posted by David in News - General | No Comments »
The consumer lending calendar has been updated to show the dates of events and important news releases for the rest of 2008.