NEW$ & VIEW$ (20 FEBRUARY 2013)

Obama Calls For Delaying Sequester  The president prodded Congress to act to avoid automatic spending cuts set to kick in March 1.

JPMorgan Leads U.S. Banks Lending Less of Deposits

The biggest U.S. banks including JPMorgan Chase & Co. and Citigroup Inc. are lending the smallest portion of their deposits in five years as cash floods in from savers and a slow economy damps demand from borrowers.

The average loan-to-deposit ratio for the top eight commercial banks fell to 84 percent in the fourth quarter from 87 percent a year earlier and 101 percent in 2007, according to data compiled by Credit Suisse Group AG. Lending as a proportion of deposits dropped at five of the banks and was unchanged at two, the data show.

Wait. Banks are back lending:

High five  Business Loans Flood The Market

Banks are increasing lending to businesses, but the cheap rates and flexible terms some offer are raising worries about the risks.

imageSo-called commercial and industrial loans were up 4.4% in the fourth quarter and 16% for all of 2012, according to data compiled by research firm SNL Financial of Charlottesville, Va.

The push comes at a time when many banks have been flooded with deposits as slow economic growth and low interest rates crimp investment. Domestic deposits since mid-2008 have surged 29% to $9.06 trillion, according to Federal Deposit Insurance Corp. data. (…)

Yet the profitability of the loans that banks are making is under pressure.

More than half of banks surveyed in the quarterly Federal Reserve survey of loan officers said that lending spreads—a rough gauge of profit that measures the gap between the rates at which a bank borrows money and lends it out—had narrowed in the past three months. The survey said standards on loans to medium and large firms eased for the fourth quarter in a row. Respondents “cited more-aggressive competition,” the Fed said. (…)

The majority of Wells Fargo’s increase in business lending, said Perry Pelos, head of the San Francisco bank’s commercial-lending unit, came from business owners who delayed buying equipment for years but now are comfortable enough to make that investment and borrow the money to fund it. (…)

U.S. HOUSING

 

Toll Brothers Swings to Profit

(…) Wednesday, Chief Executive Douglas C. Yearley Jr. said demand has strengthened and “momentum is building,” noting that first-quarter contracts were up 49% in units, while contracts for the first three weeks of the second quarter were up 40% compared with the year before.

“We are continuing to gain market share and see little competition from local private builders,” he said. “As the Spring selling season kicks off, we are also enjoying increasing pricing power due to the release of pent-up demand colliding with limited supply in the affluent markets where we operate.” (…)

China Orders More Cities to Limit Home Purchases as Prices Rise  Chinese Premier Wen Jiabao called for local authorities to “decisively” curb real estate speculation and take steps to rein the property market after data showed prices surged the most in two years last month.  

THE U.S. ENERGY GAME CHANGER

Changing Canada’s game as well as NBF Financial writes:

According to the latest projections from the U.S. Department of Energy, U.S. production of primary energy is expected to continue to outstrip demand at an accelerated pace. As a result, the Energy Information Administration (EIA) has again revised down its projections for U.S. volume imports of primary energy.

As today’s Hot Chart shows, imports have already been revised down by 22% relative to the baseline forecast made just five years ago. So far, the drop in U.S. demand had spared Canadian electricity exporters. This situation is unlikely to last. In fact, the EIA believes that 2012 was the peak year for U.S. electricity imports.

image

According to the organization, volume imports could fall by as much as 18% in 2013, the worst annual decline since the 2008-2009 recession. As shown, the outlook shows continued deterioration after that with a cumulative drop of 44% by 2030. It is of course possible that the EIA could get its projection wrong as much will depend on further
technological improvements for energy extraction.

Still, none of the Canadian energy-producing provinces can ignore the profound changes that are taking place in the U.S.

Pointing up Surplus energy = falling prices.

Exxon Replaces 115% of 2012 Production

Exxon Mobil Corp. added slightly more oil and gas to its reserves than it produced in 2012, with most of the new reserves coming from oil-rich assets in North America.

Exxon said it added more than 750 million oil-equivalent barrels from the Woodford and Bakken shale areas in North Dakota, which are among the fastest-growing oil fields in the world. About 600 million barrels of oil equivalent came from additions in Alberta and off the shore of Canada.

 Bulgaria’s Government Resigns

Austerity felled its latest political victim as Bulgaria’s government resigned after days of protests against economic policies.

General Strike Hits Greece

 
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