Financial crises

Federal Home Loan Bank of Atlanta Announces Preliminary 2020 Year-end Financial Results

Retrieved on: 
Tuesday, February 23, 2021

ATLANTA, Feb. 23, 2021 (GLOBE NEWSWIRE) -- Federal Home Loan Bank of Atlanta (the Bank) today released preliminary unaudited financial highlights for the quarter and year ended December31, 2020.

Key Points: 
  • ATLANTA, Feb. 23, 2021 (GLOBE NEWSWIRE) -- Federal Home Loan Bank of Atlanta (the Bank) today released preliminary unaudited financial highlights for the quarter and year ended December31, 2020.
  • All numbers reported below for 2020 are approximate until the Bank announces audited financial results in its Form 10-K filing with the Securities and Exchange Commission (SEC), which is expected to be filed on or about March4, 2021.
  • Additionally, in the first quarter of 2020, the Bank sold its private-label mortgage-backed investment portfolio and recorded an $85 million gain from the sale.
  • Beginning in March of 2020 and continuing throughout 2020, the global pandemic associated with COVID-19 impacted conditions in the financial markets.

Armbruster Capital - Dow Jones Warning: 40,000 on the Horizon - Mark Armbruster, CFA

Retrieved on: 
Thursday, February 18, 2021

Sure, a rising stock market may sound exciting, but too much of a good thing can pose eventual problems.

Key Points: 
  • Sure, a rising stock market may sound exciting, but too much of a good thing can pose eventual problems.
  • The Tech Boom period experienced a 19% pullback in the S&P 500 in 1998 when Long Term Capital Management imploded.
  • The similarities between our current market environment and the Tech Boom are not just limited to basic technical analysis.
  • Also, historically loose monetary policy by the Fed and other central banks ensures ample liquidity to keep the capital markets afloat.

Consumer Credit Activity Continues to Rise from Pandemic Lows; Auto Loan Subprime Performance Lags

Retrieved on: 
Thursday, February 18, 2021

On the surface, the consumer credit market is performing quite well.

Key Points: 
  • On the surface, the consumer credit market is performing quite well.
  • However, the performance of those accounts still in accommodation will help shape the true consumer credit picture.
  • However, originations activity for credit cards and personal loans have dropped by approximately 30% in the last year.
  • A tightening in auto lending standards would generally be the primary reason for such a precipitous drop in subprime origination activity.

The Alkaline Water Company Reports Record Fiscal Third Quarter Revenue of $10.2 Million

Retrieved on: 
Tuesday, February 16, 2021

Today, the Company announces that revenue increased $1.7 million year-over-year to $10.2 million for the fiscal third quarter ended December 31, 2020.

Key Points: 
  • Today, the Company announces that revenue increased $1.7 million year-over-year to $10.2 million for the fiscal third quarter ended December 31, 2020.
  • We are proud to announce that we delivered record fiscal third quarter revenue of $10.2 million.
  • Gross profit in the fiscal third quarter of $4.2 million increased by 23.6% compared to the prior-year quarter.
  • Net loss for the fiscal third quarter was $4.4 million or $0.06 per share versus a net loss of $2.9 million or $0.07 per share in the fiscal third quarter of 2020.

U.S. Home Seller Profits Soar In 2020 As Prices Set New Records In Spite Of Coronavirus Pandemic

Retrieved on: 
Thursday, January 28, 2021

Profits shot up as the national median home price rose 12.8 percent in 2020 to $266,250 a record high.

Key Points: 
  • Profits shot up as the national median home price rose 12.8 percent in 2020 to $266,250 a record high.
  • Unemployment rose to levels not seen since the Great Depression as millions of businesses temporarily or permanently closed or cut back.
  • "Last year marked a unique year in the history of home prices and profits in the United States.
  • But they went after a narrowing supply of housing stock, so prices soared and so did seller profits.

BluMetric Announces Fourth Quarter and Fiscal Year 2020 Results

Retrieved on: 
Thursday, January 28, 2021

Revenue for the fourth quarter was $10.4 million, an increase of 57% over the same quarter of fiscal 2019.

Key Points: 
  • Revenue for the fourth quarter was $10.4 million, an increase of 57% over the same quarter of fiscal 2019.
  • Gross margin for the fourth quarter was 27%, a significant increase when compared to gross margin of 21% for the fourth quarter of 2019.
  • In the fourth quarter, net earnings were $1.2 million compared to $39,000 in the same quarter of fiscal 2019.
  • Adjusted EBITDA2 for the fourth quarter increased to $1.9 million in 2020 from $175,000 the previous year, primarily due to the $3.8 million increase in revenue and associated increase in gross profit when compared to the fourth quarter of fiscal 2019.

How much capital should banks hold?

Retrieved on: 
Thursday, January 28, 2021

Having well-capitalised banks makes the financial system more resilient to such episodes.

Key Points: 
  • Having well-capitalised banks makes the financial system more resilient to such episodes.
  • We assess how much capital would be optimal for banks to hold, taking into consideration the risk of banking crises driven by borrower defaults (which we term twin default crises).
  • We find that, in the context of our model, bank capital requirements of around 15% provide the optimal trade-off between lowering the frequency of banking crises caused by borrower defaults and maintaining the availability of credit in normal times.

Introduction

    • Nevertheless, more than a decade after the financial crisis, the optimal level of bank capital requirements remains an open question.
    • To assess the optimal level of capital requirements, it is crucial to quantify their benefits and costs.
    • Higher capital requirements reduce the probability of banking crises at the expense of restricting the supply of bank credit in normal times.
    • We show that underestimating the impact of borrower defaults on bank solvency biases downwards the optimal level of bank capital requirements.

The mechanism

    • Loans have limited upside potential because healthy borrowers merely repay the contractually agreed amount including interest.
    • The asymmetric returns on bank loans lie at the heart of our mechanism.
    • Figure 1 below shows how this insight operates in a simple model of a bank holding a portfolio of loans.
    • The left panel shows the return on the loan portfolio as a function of the average productivity of the borrowing firms.
    • The right panel of Figure 1 shows the distribution of the rates of return banks receive on loans.
    • Most of the time, therefore, banks are very stable and safe but a sufficiently deep recession can push them to insolvency.
    • Capturing this fact allows our model to match the economys behaviour in normal times while generating rare but severe twin default crises i.e.
    • episodes of high firm defaults that result in bank solvency problems and deep recessions.
    • During such episodes bank solvency is much more sensitive to the health of its borrowers.
    • One way of representing the non-linear relationship between firm and bank default risk and GDP growth is through quantile regressions.
    • Figure 2 The non-linear relationship between firm defaults, bank defaults and GDP growth in the euro area: 1992-2016

Implications for the optimal level of capital requirements

    • Having built a model of banking crises driven by borrowers defaults, we use it to analyse the optimal level of bank capital requirements, i.e.
    • We find that, at this optimal level, the probability of a banking crisis is considerably reduced because the banking sector is more robust to economic shocks.
    • However, higher capital requirements also entail costs in normal times because they increase loan interest rates and lower investment and output.
    • The optimal level of bank capital requirements takes these costs into account.
    • The black solid line in Figure 3 below shows how social welfare changes with bank capital requirements.
    • Crucially, the frequency and severity of banking crises driven by borrower defaults is a key determinant of the optimal level of capital requirements prescribed by the model, and ignoring it biases the optimal level downward.
    • To show this we build a variant of our model that mimics the commonly used Merton-type approach to bank default risk.
    • The blue dashed line in Figure 3 reports the impact of capital requirements on welfare under this alternative Merton-type approach to bank asset returns.
    • In contrast, the Merton-type approach understates the costs associated with bank default and, hence, biases downwards the net benefits of higher capital requirements.

Conclusions

    • The ongoing severe losses experienced by bank borrowers could, if they result in corporate defaults, spill over to banks and result in severe weakness in the banking sector.
    • Our results stress how bank capital regulation can have a crucial role in mitigating the feedback loop between borrowers and banks default risk.
    • The efforts to increase bank capital ratios since 2010 have enhanced banks and the overall economys protection against such a crisis.
    • This is due to the very high costs of the banking crises that capital buffers help to prevent.

References

From the Internet Bubble to COVID-19: the Impact of Crises on Digital Services - ResearchAndMarkets.com

Retrieved on: 
Tuesday, January 19, 2021

3.1.1.

Key Points: 
  • 3.1.1.
  • Comparison of GDP, online advertising and e-commerce growth, from 2008 to 2012
    3.1.3. e-commerce not hit by the subprime crisis, except in the US
    3.2.1.
  • Comparison of GDP, online advertising and e-commerce growth, from 2009 to 2015
    3.3.1.
  • Comparison of GDP, online advertising and e-commerce growth, from 2017 to 2023
    View source version on businesswire.com: https://www.businesswire.com/news/home/20210119005635/en/

Market Wrap-Up: What We Learned in 2020

Retrieved on: 
Wednesday, January 6, 2021

The market started out strong in 2020, with 71% of companies beating their expected earnings through February 7th.

Key Points: 
  • The market started out strong in 2020, with 71% of companies beating their expected earnings through February 7th.
  • From February 19, 2020 to March 20, 2020, the S&P 500 dropped nearly 32%, which was a faster decline than the market experienced during the Great Depression, the market crash in 1987, and the 2008 financial crisis.
  • The Bond market did not escape the volatility, with the treasury market seeing the largest intraday moves in over 35 years in March.
  • Although the rate of decline the market experienced this year was unprecedented, the market bounced back quicker than anyone expected.

Outlook on the United States Bubble Packaging Industry to 2024 - Players Include Pregis, Sealed Air & Specialized Packing Group Among Others - ResearchAndMarkets.com

Retrieved on: 
Monday, December 28, 2020

The "Bubble Packaging" report has been added to ResearchAndMarkets.com's offering.

Key Points: 
  • The "Bubble Packaging" report has been added to ResearchAndMarkets.com's offering.
  • This report includes the impacts of the COVID-19 pandemic on the bubble packaging market.
  • This study analyzes the US market for bubble packaging by the following markets:
    Retail and other markets (e.g., direct-to-consumer mail-order shipments)
    Historical data (2009, 2014, and 2019) and forecasts for 2024 are presented for bubble packaging demand in current US dollars (including inflation) and in pounds.