Wednesday, April 13, 2005

Spread Narrows For Bank

The bank holding company Commerce Bancorp Inc (CBH), is primarily in commercial RE lending. The firm reported that the difference between what it pays for deposits and what it can charge has narrowed. Investors didn't like it. "The difference between what Commerce earns on loans and pays on deposits, fell to 4.04 percent from 4.39 percent."

The company is still pushing it's growth. "The New Jersey-based company also said it plans in June to open its first branches in the Washington, D.C. metropolitan area, as part of an ambitious plan to open 200 branches in or near the nation's capital."

12 Comments:

At 9:01 AM, Anonymous Anonymous said...

It is about time that something in the financial arena made sense !

The FED rates are going up and mortgage rates are staying the same, more or less. Someone somewhere has to be getting squezzed. For a while it appeared as though money was free, investors didn't demand any returns.

I think this is just the start. Look for mortgage rates to move up by about 2% shortly.

 
At 9:23 AM, Anonymous Anonymous said...

Help, my house isn't selling !

http://money.cnn.com/2005/04/12/real_estate/homeguide_notselling/index.htm

 
At 9:25 AM, Blogger John Law said...

I've been meaning to post this for days. not only are rising rates going to hurt, but houses are now much larger than they used to be. if this commodity bull does happen, people are going to get killed heating those huge McMansions, or by cooling them!

of course, to afford those houses they had to move further so they spend more on gas. or maybe they just wanted to live in the burbs.

 
At 10:02 AM, Anonymous Anonymous said...

i live in new jersey... and home prices have been coming down... some have even been reduced 2 or 3 times... and it's spring... what's going to happen in the fall?

 
At 10:19 AM, Anonymous Anonymous said...

Fed doesn't pop bubbles

http://www.prudentbear.com/randomwalk.asp

 
At 10:37 AM, Blogger deb said...

I'm a realtor here in LA. Since Easter, sales have really slowed. Typically in the San Fernando Valley (where I am) the MLS shows about 1700+/- closings per month for the late spring timeframe. Right now there are about 1550 listings that have gone pending in the last 30 days. These are the homes that will be closing in 30-60 days. About 20% will fall out of escrow. These numbers should lead to closings in the range of 1200-1300 in a month where in past years there have been around 1700.

This is a trend change I have just noticed in the past few weeks. In Jan/Feb we had up to about 1800 listings going to a pending status (during a prior 30 day period). This was a huge amount, as sales are usually lower in the winter. Seems like that may have been the final hurrah.

Like I said, this is a brand new trend I have noticed. Maybe it will continue, maybe it won't. It will sure be a wake up call if the Southland Regional Assoc of Realtors has to announce that transaction volume is off almost 30% year over year.

It takes a long time for the sales taking place now to work their way into the statistics that the realtors are reporting. Time will tell...

 
At 10:42 AM, Blogger deb said...

To correct myself: we had about 1800+ listings go pending in March, and 1750 in Feb. The slowdown has really been only the past couple weeks, but quite dramatic. Seems to coincide with the mainstream media picking up the "bubble" story.

 
At 11:06 AM, Blogger Ben Jones said...

(The slowdown has really been only the past couple weeks, but quite dramatic)

Thank you Deb, you are really helping all of us understand what is going on..Ben

 
At 11:07 AM, Anonymous Anonymous said...

"Fed doesn't pop bubbles"

Thanks for the link. The best quote in that article:

"Besides, the Fed not taking responsibility for asset bubbles is like an animal trainer who won’t take responsibility for what happens to the wait staff when he takes his tiger to a vegetarian restaurant. Who do they think is blowing up these bubbles, a desperate Farah Fawcett?"

 
At 12:09 PM, Anonymous party pooper said...

Banks are in a Lose Lose Situation

If long rates go down their spreads narrow.

If long rates rise their bond prices drop.

The FRB cannot help out because they have to give some consideration to inflation.

With real interest rates right about at par, they can't risk lowering them without a collapse in the dollar. If the dollar collapses then all hell will break loose - and they know it. They have to protect the dollar because they are beholden to foriegners to finance the government. If you want to know who controls US interest rates then look to the Japanese or Chinese central banks not the FRB.

Bank stocks are going down. And that's about the surest bet one can make right now.

I'm just waiting for a hedge fund to blow up. It's only a matter of time...

My largest position is cash. After that, it's short US stocks.

 
At 12:13 PM, Blogger Ben Jones said...

(I'm just waiting for a hedge fund to blow up. It's only a matter of time)

Almost certainly, hedge funds will/are play a role in the bust.

 
At 12:43 PM, Anonymous Anonymous said...

This is just another example of the housing market in Las Vegas (http://www.lasvegashomes.com/Default.cfm/Page=/ListingsReduced.html):
04/11/2005: 15921 single house listing
04/12/2005: 16110 single house listing
04/13/2005: 16292 single house listing

What's next???

 

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