Here
are the answers to yesterday's quiz.
1. Johnny
's mother had three children. The first child was named April The second child
was named May. What was the third child 's name?
Answer:
Johnny of course
2.
There is a clerk at the butcher shop, he is five feet ten inches tall, and he
wears size 13 sneakers. What does he weigh?
Answer:
Meat.
3.
Before Mt. Everest was discovered, what was the highest mountain in the world?
Answer:
Mt. Everest; it just wasn't discovered yet.
4. How
much dirt is there in a hole that measures two feet by three feet by four feet?
Answer:
There is no dirt in a hole.
5. What
word in the English language is always spelled incorrectly?
Answer:
Incorrectly
6.
Billy was born on December 28th, yet his birthday is always in the summer. How
is this possible?
Answer:
Billy lives in the Southern Hemisphere.
7. In
California, you cannot take a picture of a man with a wooden leg. Why not?
Answer:
You can 't take pictures with a wooden leg. You need a camera to take pictures.
8. What
was the President 's name in 1975?
Answer:
Same as is it now - Barack Obama
9. If
you were running a race, and you passed the person in 2nd place, what place
would you be in now?
Answer:
You would be in 2nd. Well, you passed the person in second place, not first.
10.
Which is correct to say, "The yolk of the egg are white" or "The
yolk of the egg is white"?
Answer:
Neither, the yolk of the egg is yellow.
11. If
a farmer has 5 haystacks in one field and 4 haystacks in the other field, how
many haystacks would he have if he combined them all in another field?
Answer:
One. If he combines all of his haystacks, they all become one big one.
"If
you work hard and go the extra mile to provide for your family...I will take
that extra income and give it to those who refuse to do the same!" Was
that heard on the campaign trail? I don't know. But it is making the rounds.
And don't forget that tomorrow is April's Fools Day - be careful what you
believe in daily commentaries.
The
Financial Times reported that client-reporting failure has cost big banks $43B since 2009. "The world's largest investment banks have been
fined $43 billion during the past seven years for customer-reporting failure,
according to Corlytics." That is a lot of money. Something else that has
cost a lot of money is bank failures. Fortunately, the number of failed banks
peaked in 2010 and has been coming down ever since: 2008 25, 2009 140, 2010
157, 2011 92, 2012 51, 2013 24, 2014 18, 2015 8.
FDIC
lawsuits regarding those failures, with a two-year lag being typical, peaked a
few years later: 2010 2, 2011 16, 2012 26, 2013 40, 2014 21, 2015 3. Many of
those suits have been settled, but the cost has been steep. Not including legal
fees, the amount as totaled over $675 million.
Small
banks often try to become big banks, and many opt to acquire or merge rather than
grow their assets organically - if there is a cultural fit! But things may be
quieting down: S&P Global Market Intelligence reports as of March 15 there
were 47 bank and thrift transactions vs. 85 in Q4 of 2015 and 67 in Q1, or
about 45% and 30% lower, respectively.
Just
in the last week, however, it was announced that in Michigan The State Bank
($444) will acquire Community State Bank ($196mm) for about $21.6mm in cash
(100%). In Illinois Morton Community Bank ($3.1B) will acquire the parent
company of Illini Bank ($285mm) and Farmers State Bank of Camp Point ($49mm).
In nearby Ohio First State Bank ($370mm) will acquire First Safety Bank
($49mm). The holding company of CBI Bank & Trust ($491mm, IA) and Farmers
& Mechanics Bank ($297mm, IL) will acquire Brimfield Bank ($47mm, IL).
Northwest Bank ($9.0B, PA) will acquire employee benefits and property casualty
insurance firm Best Insurance Agency (PA). In West Virginia, Mountain Mama,
First Sentry Bank ($508mm) will acquire Rock Branch Community Bank ($75mm) for
about $7.4mm in cash and stock. And First State Bank ($366mm, NE) will acquire
Farmers State Bank ($50mm, NE).
Wells
Fargo Economics Group: It Happens Every Cycle. What's that Wells Fargo? You
say underwriting standards have eased over the last three years? "....there
has been a steady rise in the percentage of banks that have eased underwriting
standards, while there has been a continued decline in the percentage of banks
that have tightened credit."
Regulators
are not big fans of entities that they can't regulate. Peer-to-peer lending is
on the rise. This much talked-about cottage industry has been moving into
traditional lending space over the last few years and has created its own
arbitrage opportunities. This P2P platform has become so popular abroad, even China's
marketplace is booming....so, China being China, is cracking down on it. The last week of
2015 saw China's banking regulator laying out plans to restrict thousands of
online peer-to-peer lenders, pledging to "cleanse the market" as
failed platforms and suspected frauds highlight risks. Bloomberg writes, "The
thrust of the CBRC's approach is that the platforms are intermediaries --
matchmakers between borrowers and lenders -- that shouldn't themselves raise or
lend money. It rules out P2P sites distributing wealth-management products, a
tactic that some hoped would diversify their revenue sources, and limits their
use for crowd funding."
And
while we're on banks, credit quality has been mixed. According to the American Bankers Association's Consumer Credit Delinquency
Bulletin, delinquency in closed-end loans increased in the third quarter of
2015. Delinquencies slightly rose in six of the eleven individual
categories. The composite ratio, which tracks delinquencies in eight
closed-end categories, grew 5 basis points to 1.41 percent in Q3 2015. The rise
in closed-end loan delinquency can be attributed to slow job and income growth.
Home equity line delinquencies dropped 3 basis points to 1.3 percent and
property improvement delinquencies fell 4 basis points to 0.87 percent. Bank
card delinquencies increased two basis points to 2.54 percent, while personal
loan delinquencies rose to 1.52 percent from 1.41 percent.
The Federal Reserve's FedCommunities.org web site has been updated with easy access to the
growing number of Fed resources related to community development across the
country. Updates include new video, research, data, publications and webinars
pertinent to the topics of housing and the Community Reinvestment Act (CRA).
Available information topics such as the upcoming 2016 National Interagency
Community Reinvestment Conference, which will be held Feb. 7-10, 2016, in Los
Angeles.
Additional resources covering housing and CRA
include: The Community Development Data Inventory, compiled by the Philadelphia
Fed, The Kansas City Fed's "CRA OneSource" site that which includes
CRA tools, templates, guides and webinars. The St. Louis Fed's Housing Market
Conditions report, which provides a quarterly snapshot of conditions in the
U.S. and in the Eighth District states. These are just a few of the
hundreds of online community development resources that
are updated frequently by the Federal Reserve Board of Governors and
its 12 regional Reserve banks, and made easily accessible via the FedCommunities.org centralized website.
By now most of the smart money is betting
that the Fed is not going to do anything regarding short-term rates for quite
some time in spite of the U.S. economy doing pretty well. (Of course plenty of
folks think our economy is dragging.) The U.S. yield curve steepened very
sharply Wednesday as the ADP employment change was roughly in line with
estimates and the $28 billion 7-year Treasury auction went well.
This
morning we've had all the scheduled news we're going to have ahead of
tomorrow's unemployment data. The March Challenger Job Cuts showed a 31%
increase year over year. And Initial Jobless Claims for the week ending 3/26
showed +11k to 276k, topping forecasts. We closed Wednesday with the 10-year
sitting at 1.83% and this morning it is hovering around 1.84% with agency MBS
prices worse a smidge.
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