Is the next down turn

right around the corner?

Will the commercial R. E. market

be the biggest nail in our coffin?

Commercial mortgage failure at 20-year high in U.S.: report

Mon Jul 20, 2009 9:33am EDT

(Reuters) - Commercial mortgages at U.S. banks have been failing at the fastest rate in nearly 20 years, the Wall Street Journal said, citing its own analysis.
Losses on loans used to finance commercial spaces would possibly reach about $30 billion by the end of 2009 at the current rate, the article said.
The estimated $30 billion is based on financial reports filed by more than 8,000 banks for the first quarter, the paper said.
The commercial real-estate market, valued at about $6.7 trillion, represents 13 percent of the U.S.'s gross domestic product, according to the paper.
(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by David Cowell)

Citi takes big step to giving US 34 pct stake

Thu Jul 23, 2009 2:49pm EDT

* Bank completes $25 bln preferred stock exchange
* Shares rise
NEW YORK, July 23 (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) on Thursday said it has completed a $25 billion securities exchange, a key step toward eventually giving the U.S. government a 34 percent equity stake in the bank.
The New York-based lender is conducting a series of exchange offers on $58 billion of securities, as part of a federal bailout designed to bolster the bank's capital.
Public and private investors are exchanging up to $33 billion of securities for common stock, while the government is exchanging up to $25 billion of its own securities.
Citigroup is conducting the exchange offers after heavy losses led to a series of federal bailouts, including $45 billion of taxpayer money, for the third-largest U.S. bank.
The bank is the most troubled of the nation's largest lenders, after credit losses and writedowns led to $37.5 billion of net losses in the 15 months ended in December.
Citigroup said private holders of $12.5 billion of convertible preferred securities agreed to swap them for securities expected to convert to common stock.
The government matched this by swapping $12.5 billion of its own non-convertible preferred shares for the securities.
An exchange offer for publicly held preferred securities, also with a government match, is set to expire on Friday.
Both offers are expected to close late this month.
In afternoon trading, Citigroup shares rose 3 cents to $2.83 on the New York Stock Exchange (Reporting by Jonathan Stempel; editing by John Wallace)

Japan to order Citi suspend some business

Thu Jun 25, 2009 1:03pm EDT

* Japan to punish Citi re money laundering oversight
* Business suspension order for some of retail business
* FSA to announce punishment on Friday - sources (Adds details from paragraph 5)
By Taro Fuse and David Dolan
TOKYO, June 26 (Reuters) - Japan's financial regulator will order Citigroup (C.N: Quote, Profile, Research, Stock Buzz) to suspend some of its retail business in Japan for lax oversight of money laundering controls, two people familiar with the matter said on Thursday.
The Financial Services Agency will announce the punishment on Friday, said the sources, who declined to be identified because the information is not yet public.
It was not immediately clear how long the suspension would last, or what operations would be affected.
A spokesman for Citigroup in Japan declined to comment, while the regulator was not immediately available for comment.
It will not be the first time that the U.S. bank has run foul of Japanese regulators. In 2004 Citigroup was forced to shut down its private banking business for violations that also included loose money-laundering controls. That incident prompted then-chief executive Charles Prince to make a public bow of apology in Japan, the traditional sign of remorse for Japanese executives and politicians.
The U.S. bank has been forced to sell off assets globally to raise cash after suffering more than $85 billion in losses on toxic assets.
The bank said last month it would sell its Japanese brokerage and key investment units to Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research, Stock Buzz), Japan's third largest bank, for $5.9 billion.
It is also looking to sell its Japanese asset management arm, Nikko Asset Management. [ID:nBNG457249] (Reporting by Taro Fuse and David Dolan; Editing by Rodney Joyce)

Bank of America credit losses soar, profit falls

Fri Jul 17, 2009 9:57pm EDT
By Jonathan Stempel

NEW YORK (Reuters) - Bank of America Corp, the largest U.S. bank, posted a quarterly profit that topped Wall Street forecasts but warned of a fresh surge in soured loans to credit card, mortgage and business customers.
Soaring credit losses may add to pressure on Chief Executive Kenneth Lewis as the U.S. Congress and regulators ramp up scrutiny of the bank's ability to manage risk and its controversial purchase of Merrill Lynch & Co, and that tough economic conditions could hurt results into 2010.
"Growth in charge-offs and nonperforming assets still scares the daylights out of me," said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.
Second-quarter net income applicable to common shareholders fell 25 percent to $2.42 billion, or 33 cents per share, from $3.22 billion, or 72 cents, a year earlier.
Before preferred stock dividends in both periods, profit fell 5 percent to $3.22 billion. Net revenue on a taxable equivalent basis rose 60 percent to $33.09 billion.
Analysts on average expected profit of 29 cents per share on revenue of $33.26 billion, according to Reuters Estimates.
Lewis on a conference call predicted that "profitability in the second half of the year will be much tougher than the first half" because of an expected absence of one-time gains. Such gains helped boosted first-half net income to $7.47 billion.
Second-quarter results included an unspecified tax benefit and $9.1 billion of pretax gains from selling a stake in China Construction Bank Corp and putting a processing unit into a joint venture with First Data Corp. The bank took a $760 million charge to bolster a U.S. deposit insurance fund.
CEO SEES INCREASE IN LOSSES MODERATING
Bank of America set aside $13.38 billion for bad loans for a second straight quarter, and net charge-offs totaled $8.7 billion, up 25 percent from the prior three-month period.
Total reserves increased $4.63 billion to $35.78 billion, and nonperforming assets surged 21 percent to $30.98 billion.
"It was expected to be difficult in the quarter, and it is," said Richard Bove, an analyst at Rochdale Securities in Lutz, Florida.