Miercoles 27/10/10 Banca duplica ganancias de sus reservas

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Los bancos mas grandes del pais virtualmente han duplicado sus ganancias colectivas en el tercer trimestre solamente inyectando $8.1 billones de ganancias netas provenientes de los fondos que reservaron para cubrir por las perdidas de prestamos.

Hay 18 bancos en US con por lo menos $50 billones en activos, y juntos, ellos han ganado $16.8 billones en en tercer trimestre. De esas ganancias, casi la mitad, o 48% vienen de las reservas para cubrir malos prestamos. Hace un anio, los mismos 18 bancos ganaron $6.2 billones en el trimestre; en esos momentos, ellos agregaron mas de $7.8 billones a las mismas reservas. Esa medida redujo sus ganancias. El analisis omite los $10.4 billones en noncash cargos a las ganancias de BAC durante el tercer trimestre.

En los proximos trimestres mas de esas reservas pasaran a sus ganancias. La razon: los bancos pusieron al costado demasiado capital para cubrir por perdidas durante la crisis financiera y ellos todavia tienen las reservas mas grandes en su historia.

Tenemos que irnos a 1948 para comparar las reservas tan grandes que tienen los bancos Americanos. Estos son los niveles mas altos que hemos visto.

Los bancos se fueron forzados a poner enormes reservas debido a leyes contables arcaicas, lo cual provoco en su momento las protestas de los bancos. La enorme reduccion de las reservas por perdidas son una demostracion de lo mucho que ha mejorado la situacion en los ultimos meses, a pesar del alto desempleo y la desaceleracion de la economia.

JPM gano $4.4 billones en el tercer trimestre, en parte debido a los $1.7 billones proveninetes de sus reservas contra malos prestamos. Dimon, CEO de JPM dijo que las reglas para los bancos son tontas. Esas leyes promueven que hayan epocas de bonanza y epocas muy malas o ciclos; los bancos no pueden tener una reserva extra en buenos tiempos y despues cuando hay una crisis, ellos tienen que conseguir capital.

Banks Turn Their Reserves to Profit

By MARSHALL ECKBLAD
Call it steroids for bank profits.

The biggest U.S. banks virtually doubled their collective earnings in the third quarter just by injecting $8.1 billion into net income from funds they had set aside to cover loan losses.

There are 18 commercial banks in the U.S. with at least $50 billion in assets, and together they earned an adjusted $16.8 billion in the third quarter. Of those profits, nearly half, or 48%, were from drawing down what bankers call loan-loss reserves, according to an analysis by Dow Jones Newswires. A year ago, the same 18 banks earned $6.2 billion in quarterly profits; at that time, they added more than $7.8 billion to the same reserves, a move that reduced their profits. The analysis omits a $10.4 billion noncash charge to earnings that Bank of America Corp. disclosed during the third quarter.

Lenders are likely to disclose more releases from reserves for quarters to come. The reason: American banks set aside so much capital for loan losses during the financial crisis that they still hold bigger reserves than at any other time in modern history, according to Moody's Investors Service.

"Going back to 1948, banks' reserves, as measured by total loans outstanding, are at the highest levels we've ever seen," said Gerard Cassidy, analyst at RBC Capital Markets.

At the heart of the issue is a set of arcane corporate-governance accounting rules that call for banks to release loan-loss reserves as soon as they don't expect to need them, even against the protest of some bank officials. The sharp reductions in loan-loss reserves illustrate how banks' economic forecasts have improved in recent months, even as borrowers continue to face persistently high unemployment and a slumping U.S. economy.

For borrowers looking for capital, the shrinking loan-loss reserves at banks also show how lenders have pulled back from loans to riskier borrowers in the wake of the financial crisis.

J.P. Morgan Chase & Co. earned $4.4 billion in the third quarter, in part because it released $1.7 billion from the bank's loan-loss reserves. During a recent conference call with investors, Chief Executive James Dimon told investors, "We don't release reserves because we want [to hit] earnings targets or something like that. We release them because we have to." He called the rules "silly" and said they promote the industry's history of boom-and-bust cycles; banks are unable to build an extra cushion of reserves in good times, and then have to build such reserves when loan problems surface.

But as banks' lending activity and revenue have fallen in the past two years from overheated levels before the financial crisis, the sharp reductions in reserves have been a great help to big banks's earnings.

In fact, releases from reserves eclipsed earnings at two big banks. Fifth Third Bancorp earned $238 million in the third quarter after the Cincinnati regional bank released $500 million from its loan-loss reserves. KeyCorp, in Cleveland, earned $219 million after releasing $263 million from reserves.

At other banks, draw-downs from reserves accounted for the vast majority of third-quarter profits. Of Citigroup Inc.'s $2.2 billion in earnings, 92% came from reserve releases. Similar releases accounted for 82% of earnings at Capital One Financial Corp. in McLean, Va., and 65% at Huntington Bancshares Inc. in Columbus, Ohio.

Two other regional lenders reported smaller losses after releasing reserves. Marshall & Illsley Corp. in Milwaukee lost $144 million in the quarter, but released $128 million. Zions Bancorp in Salt Lake City, lost $47 million and released $51 million.

Banks' moves to shrink their reserves also are a reflection of a decade-old fight between investor advocates and regulators.

The Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency want banks to set aside money based on expected losses over time—and they prefer banks use longer time horizons. Said RBC's Mr. Cassidy: "Regulators have never seen a reserve they didn't like. In their view, more is better."

The Securities and Exchange Commission, on the other hand, has in the past looked askance banks that set aside too much capital for loan losses and use the robust reserves to boost earnings. In the late 1990s, the SEC questioned the loan-loss accounting used by Atlanta-based SunTrust Banks Inc., and the bank agreed to cut provisions.

In the third quarter, SunTrust earned $153 million after releasing $75 million from its reserves.

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Esta noticia de la banca Americana es fabulosa no solo para el sector financiero si no para la economia total, un dia, esperemos pronto, el desempleo mejorara al igual que la economia y han fondos suficientes para otorgar prestamos que impulsaran a la economia mediante el credito. Esto es muy bullish. Mejores ganancias significan mejores precios para las acciones de los bancos. Y tambien dividendos, que esperemos los vuelvan a pagar pronto.

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El yen down 81.51, euro down 1.3836

Los futures del Dow Jones 19 puntos al alza.

Korea +0.22%

Se paralizo la negociacion de futures en Australia.

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Oro y petroleo al alza a pesar que el euro esta a la baja. El yen a la baja.

9:04 p.m. EDT 10/26/10Futures Last Change Settle
Crude Oil 82.62 0.07 82.55
Gold, Dec. 1342.5 3.9 1338.6
DJ Industrials 11143 19 11124
S&P 500 1183.80 1.00 1182.80

9:15 p.m. EDT 10/26/10Currencies Last (bid) Prior Day †
Japanese Yen (USD/JPY) 81.50 81.50
Euro (EUR/USD) 1.3836 1.3852

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Yields up 2.63%

Los lideres del Asia viajan a Hanoi para presionar a ese pais sobre el alza del yuan. Cargamonton, a ver si funciona.

Australia +0.17%

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Metales al alza

October 26,20:59
Bid/Ask 3.8639 - 3.8666
Change +0.0150 +0.39%
Low/High 3.8358 - 3.8671
Charts

Nickel October 26,20:49
Bid/Ask 10.6157 - 10.6475
Change +0.0363 +0.34%
Low/High 10.5341 - 10.6475
Charts

Aluminum October 26,20:59
Bid/Ask 1.0598 - 1.0619
Change +0.0028 +0.27%
Low/High 1.0474 - 1.0624
Charts

Zinc October 26,20:59
Bid/Ask 1.1761 - 1.1778
Change +0.0032 +0.28%
Low/High 1.1652 - 1.1779
Charts

Lead October 26,20:46
Bid/Ask 1.1692 - 1.1724
Change +0.0077 +0.66%
Low/High 1.1547 - 1.1729
Charts

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La economia de South Korea se desacelero en el tercer trimestre a solo 0.7%

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Ordenes duraderas, se espera suban 2.5%

Reportan utilidades

On Deck Wednesday: Earnings Deluge, Durable Goods

Hang in there Shia, you’ll get through earnings season. Economics:

7 a.m. — Mortgage Bankers Association’s applications survey data.
8:30 a.m. — September durable goods. The consensus expectation is for an increase of 2.5%. in the headline. But the key number the markets will be watching is the orders for capital goods excluding defense and aircraft, which is used as a barometer of business spending. The last time we got this data that gauge rose by 4.1%, helping to give the markets a lift despite disappointing headline numbers.
10 a.m. — New home sales for September. Economists expect sales to show a small uptick from August, while prices remain weak. For more on the green shoots of housing getting mowed down, check out this Ahead of the Tape, by David Reilly.
Earnings: There’s tons, but here’s a smattering of the more high profile companies expected to report.

Automatic Data Processing
Akamai Technologies
The Allstate Corp
ConocoPhillips
General Dynamics
International Paper Co.
Northrop Grumman
Norfolk Southern Corp.
Procter & Gamble Company
Sprint Nextel
Visa
Whirlpool

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La privatizacion de las pensiones en US (Social Security): Sigue siendo una buena idea

Una pareja que trabajo entre 1965 al 2009 tendrian 75% mas de lo que el Social Security del gobierno les va a pagar.

Obama esta equivocado cuando dice que la idea de darle las pensiones a los brokers de Wall Street es una idea enfermiza.

Private Social Security Accounts: Still a Good Idea
A couple who worked from 1965 to 2009 would have beat the government payout by 75%.
By WILLIAM G. SHIPMAN AND PETER FERRARA
As Democrats and Republicans jockey to set Congress's agenda for after the midterm elections, President Obama has already dismissed one reform that would improve Americans' financial standing: allowing workers to save and invest some of their Social Security taxes in personal accounts.

That's an "ill-conceived" proposal, Mr. Obama said in August, because it means "tying your benefits to the whims of Wall Street traders and the ups and downs of the stock market." The financial crisis, he said, should have put this idea to rest "once and for all."

Missing from the president's statements is any acknowledgment that, to date, all proposals to create personal accounts have provided workers with the option to invest for retirement or to stay with Social Security. Any worker could choose to reject the option. So, contrary to the president's assertion, creating personal accounts wouldn't suddenly empower those who "would gamble your Social Security on Wall Street."

In addition, no proposal has required workers to invest personal account funds in Wall Street stocks, as opposed to other investments such as corporate or government bonds, bond mutual funds or indexes, or certificates of deposit.

Suppose a senior citizen—let's call him "Joe the Plumber"—who retired at the end of 2009, at age 66, had been able to set up a personal account when he entered the work force in 1965, at the age of 21. Suppose that, paying into his personal account what he and his employer would have paid into Social Security, Joe was foolish enough to invest his entire portfolio in the stock market for all 45 years of his working career. How would he have fared in the recent financial crisis?

While working, Joe had earned the average income for full-time male workers. His wife Mary, also age 66, had earned the average income for full-time female workers. They invested together in an indexed portfolio of 90% large-cap stocks and 10% small-cap stocks, which earned the returns reported each year since 1965.

By the time of their retirement in 2009, Joe and Mary would have accumulated account funds, after administrative costs, of $855,175. Indeed, they would have been millionaires a few years earlier, but the financial crisis lost them 37% in 2008. They were unfortunate to retire just one year after the worst 10-year stock market performance since 1926. Yet their account, having earned a 6.75% return annually from 1965 to 2009, would still pay them about 75% more than Social Security would have.

What's more, this model assumes that in retirement Joe and Mary switch to a lower-risk, conservative portfolio that averages a return of just 3%. Of course for young workers today, Social Security promises even lower returns of only 1.5% or less, given the actuarial value of all promised benefits. For many, the promised returns are zero or negative. And if Congress raises taxes or cuts benefits in order to close financial gaps—as everyone who rejects personal accounts effectively advocates—the eventual returns for young workers will be even lower.

It is a mathematical fact that the least expensive way to provide for an almost certain future liability is to save and invest in capital markets prior to the onset of the liability. That's why state and local pension funds, corporate pension plans, federal employee retirement plans and Chile's successful Social Security personal accounts (since copied by other countries) do so. It is sound practice.

And it's why Mr. Obama is wrong to assert that personal Social Security accounts are "ill-conceived," and why each of us should have the liberty to opt into one.

Mr. Shipman, formerly a principal at State Street Global Advisors, is co-chairman of the Cato Project on Social Security Choice. Mr. Ferrara, director of entitlement and budget policy at the Institute for Policy Innovation, served in the White House Office of Policy Development under President Reagan.

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El Nikkei +0.69%

Korea -0.11%, Australia +0.07%

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La agencia del control de medio ambiente (EPA) quiere quitarnos el 7% de la energia en US

A todos los que les importa la economia Americana estan respirando mas tranquilos ahora que parce que el impuesto a la energia parece estar en la basura politica. Pero, no esten tan seguros. La Casa Blanca (Obama) ahora esta tratando de forzar su agenda mediante la regulacion del carbon, calladitos, sin hacer mucho ruido y sin la atencion publica, un nuevo estudio muestra que el danio ya esta hecho.

Ayer la North American Electric Reliability Corporation, ha lanzado un programa que el NERC estima que EPA va a sustraer entre 46 y 47 gigawatts de generacion de capacidad de US para el anio 2015. Para poner esos numeros en perspectiva, el peor escenario seria una reduccion del 7.2% del poder de generacion de energia del pais, y casi todas las plantas de carbon-fuego, precisamente las que proveen mas de la mitad de la electricidad en US.

Credit Suisse dice que hacer lo que Obama quiere costara $150 billones para el fin de la decada. Costo que se reflejara en un aumento de los precios de la electricidad.

La regulacion es tan agresiva que causara interrupciones de energia y muchos problemas en general.

Recordatorio: las elecciones son el Martes

The Unseen Carbon Agenda
The EPA wants to take away 7% of U.S. power generation

Anyone who cares about the U.S. economy is breathing easier now that cap and tax appears to be on the political garbage barge, but don't be so sure. The White House is still pursuing its carbon agenda through regulation, albeit with almost no public attention, and a new study shows the damage that is already being done.

Yesterday the North American Electric Reliability Corporation, a highly regarded federal energy advisory body, released an exhaustive "special assessment" of this covert program. NERC estimates that the Environmental Protection Agency's pending electric utility regulations will subtract between 46 and 76 gigawatts of generating capacity from the U.S. grid by 2015. To put those numbers in perspective, the worst-case scenario would amount to a reduction of about 7.2% of national power generation, and almost all of it will hit coal-fired plants, the workhorse that supplies a little over half of U.S. electricity.

The EPA's battery of new rules is mostly obscure, ranging from traditional pollutants such as mercury and sulfur to new regulation of coal ash and even water intake structures, which power plants use to cool down equipment. NERC notes that the "pace and aggressiveness" of issuing so many new rules at once is unprecedented. Keep in mind, too, that these are conservative estimates and don't even include the EPA's looming carbon "endangerment" rules.

Supposedly all this is separate from greenhouse gasses, but the White House and the EPA are clearly targeting fossil fuels and coal in particular to achieve via rule-making what even the Democratic 111th Congress has rejected as legislation. As much as a fifth of the perfectly functioning coal-fired fleet will be forced into early retirement, to be replaced with a largely more expensive energy mix, especially natural gas.

Some plants can be retrofit with new environmental controls like scrubbers, but this is nearly as costly as building new plants from scratch. And just as you can't replace an engine while heading down the highway at 75 mph, this will still require shut downs in the interim, for at least five years.

In a recent research note, Credit Suisse estimates that compliance will cost as much as $150 billion in capital investment by the end of the decade. All of this will flow through to rising electricity prices, which is the same as a tax increase on businesses and consumers.

NERC also warns of "deteriorating resource adequacy" and of the logistical reality that replacing or upgrading so much capacity so fast may lead to brownouts and shortages. The danger is greatest throughout the Midwest in states like Ohio, Pennsylvania and West Virginia, where the costs will also be concentrated.

The larger point is that instead of debating a carbon program on the merits, the Obama Administration is now trying to impose the same burden step by step on the sly. At this point, the only way voters can stop the EPA is to install a check in one of the other branches of government. Election Day is Tuesday.

[admin]

Obama y sus izquierdistas de la proteccion del medio ambiente estan simplemente locos. Nada de lo que proponen se puede hacer sin quebrar al pais. A ellos no les importan las consecuencias, solo el implementar su agenda socialista.

Las elecciones son el Martes. Hay que detenerlos.

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El Shanghai C. -0.59%

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El agua del canio de New York, la mejor del pais.

El agua es mas pura, Florida esta tratando de imitar la calidad del agua. Las pizzas y los bagels no saben igual en otros sitios.


Secrets of ‘Brooklynizing’: How to Replicate NYC’s Tap Water.Search Metropolis

By Maya Pope-Chappell

Carline Jean, Sun Sentinel
The Original Brooklyn Water Bagel Co.’s water treatment room where Florida tap water is “Brooklynized.”It took six months of tinkering with a water-filtration system before a team of entrepreneurs in Florida believed they had successfully recreated New York City’s distinctive tap water.

Howard Sackel, an engineer from New Jersey, was part of the team that developed the so-called “Brooklynizing” technology used by Original Brooklyn Water Bagel Co. in Delray Beach, Fla. “We were looking to replicate a New York bagel, which is widely known as the best in the world,” he said in an interview. “Most bakers will tell you that what gives New York bagels its characteristics is the water.”

Sackel, who is also a shareholder in the bagel shop, described a discovery process that took the water replication team to several rented bakeries where the formula was tested and refined.

As The Journal reported Tuesday, technology to recreate New York City’s water is at the heart of a pitched legal battle between the bagel shop and a nearby pizzeria. In an amended lawsuit filed in October in Florida’s Palm Beach County, the bagel shop alleges Mamma Mia’s Trattoria & Brick Oven Pizzeria in Lake Worth, Fla., misappropriated trade its secrets. A lawyer for the pizzeria, in turn, has disputed that water can be patented.

Sackel said he began by studying water components listed in the city’s Drinking Water Supply and Quality Report. He consulted with a water expert on how best to replicate certain minerals in New York City water that effect baking.

“The concept I thought of was to strip the water of all the local minerals and contaminates to basic H2O,” he explained. “Then add in certain properties that would make the water similar to the New York water.”

Sackel would not specify which minerals he believed to be key to the city’s water. “The formula of what we put back in is proprietary, but could somebody else do it? Probably,” he said.

The city’s water is supplied from 19 reservoirs and three controlled lakes in upstate New York, according to the city’s 2009 Drinking Water Supply and Quality Report. The water is treated with chlorine, fluoride, food-grade phosphoric acid, and, in some cases, sodium hydroxide.

Sackel says that unlike Florida water, which is close to the surface and goes through a rigorous purification process, New York water comes from deep underground and is therefore more pure.

“I don’t like drinking water out of the tap in Florida but I’ll drink the water from the tap [in New York],” Sackel said.