Bailout? Stimulus? Bollocks!

Up, Down.

Eight Trillion ( 8 TRILLION! dig it ) a-and the mean-ol' depression will be all better by 2011, hell, maybe even 2010. Yeah, right.

It's Carnaval in Rio, the normal order is turned upside-down, and the girls are taking their clothes off, peitos a fora / tits out, while in Washington and Ottawa the politicians are taking their minds off, all good.



Nothing but a bunch of words really. All the stuffed shirts standing up and making promises about an uncertain future. Some substantive numbers from the NYT, which are better in the original but posted here because these things have a tendency to disappear, And, for comic relief, Elie Wiesel whining about getting taken by Madoff, and Ian Brown just whining.

1. From the OED: Boost, Pollyanna.
2. Opening statement by Mark Carney, Governor of the Bank of Canada, at a press conference following the release of the Monetary Policy Report Update, 22 January 2009.
3. Remarks by Mark Carney, Governor of the Bank of Canada, to the Halifax Chamber of Commerce, 27 January 2009.
4. Opening statement by Mark Carney, Governor of the Bank of Canada, to the House of Commons Standing Committee on Finance, 10 February 2009.
5. U.S. Is Pressed to Add Billions to Bailouts, February 23, 2009, Edmund L. Andrews, Andrew Ross Sorkin, Mary Williams Walsh, Eric Dash, Michael J. de la Merced.
6. Adding Up the Government’s Total Bailout Tab, Matthew Ericson, Elaine He, Amy Schoenfeld, February 4, 2009.
7. Sharper Downturn Clouds Obama Spending Plans, Peter S. Goodman, February 27, 2009.
8. Elie Wiesel Levels Scorn at Madoff, Stephanie Strom, February 26, 2009.
9. Divas of doom find their fame in peddling the direst of fortunes to pessimistic masses, Ian Brown, February 27, 2009.
10. Emissions galore: He likes us, he really likes us, February 21, 2009, Ian Brown.

Who are the rogues? And who are the weasels? And who can you trust? And who can you believe? Dunno. No idea a-tall, except for the obvious suspects. Presented sort of alphabetically ... by first name - thus leaving the most interesting for last :-)











Keep On The Sunny Side

Well there's a dark and a troubled side of life.
There's a bright and a sunny side too.
But if you meet with the darkness and strife,
The sunny side we also may view.

Keep on the sunny side,
Always on the sunny side,
Keep on the sunny side of life.
It will help us every day,
It will brighten all the way,
If we'll keep on the sunny side of life.

Oh, the storm and its fury broke today,
Crushing hopes that we cherish so dear.
Clouds and storms will in time pass away.
The sun again will shine bright and clear.

Keep on the sunny side,
Always on the sunny side,
Keep on the sunny side of life.
It will help us every day,
It will brighten all the way,
If we'll keep on the sunny side of life.

Let us greet with a song of hope each day.
Though the moments be cloudy or fair.
Let us trust in our Saviour always,
To keep us, every one, in His care.

Keep on the sunny side,
Always on the sunny side,
Keep on the sunny side of life.
It will help us every day,
It will brighten all the way,
If we'll keep on the sunny side of life,
If we'll keep on the sunny side of life.

The Carter Family - Keep on the sunny side, YouTube.
June Carter Cash - Keep on the sunny side, YouTube.



From the OED:
boost, v.
1. trans. To hoist; ‘to lift or push from behind (one endeavoring to climb); to push up. (Low)’ Webster. Also fig. To assist over obstacles, to advance the progress of; to support, encourage; to increase (in value, reputation, etc.); to praise up, to extol; also absol. orig. U.S. colloq.

3. To steal, esp. to shoplift; to rob. Also absol. Cf. BOOSTER 3. slang (orig. U.S.).

1912 [implied at BOOSTER 3]. 1915 W. HEALY Individual Delinquent xviii. 548 He was a booster himself, he had already stolen. He says ‘You come on, I know a place where we can boost.’ 1933 Amer. Speech VIII. 24/2 Boost, steal, especially by shoplifting. 1951 Life 11 June 126/3 Boys turn to picking pockets, car ‘boosting’ and other forms of thievery. 1962 ‘K. ORVIS’ Damned & Destroyed xi. 73 Fay blows in. Loaded to the teeth with a bankroll she got for a tray of watches she boosted. 1971 W. BURROUGHS Speed iii. 65, I boosted a guy that was only in a coma. 1978 C. WHITE They do it All with Mirrors iii. 27 The route to socks took us through jewelry, past a display of rhinestoned smile face pens, two of which she boosted.


Pollyanna, adj. and n.
A. adj. Resembling Pollyanna; naively cheerful and optimistic; unrealistically happy.

1917 Bellman 298/1, I am not one of the Pollyanna band. 1963 ‘E. LATHEN’ Place for Murder ii. 20 Thatcher decided that a Pollyanna tone was necessary... ‘I am looking forward to tomorrow night,’ he said firmly. 2000 Daily Tel. 25 Jan. 25/1 Pryce-Jones admitted that he had a strong Pollyanna side to his own character and tried to avoid gloom and melancholy.

B. n. A person able to find cause for happiness in the most disastrous situations; a person who is unduly optimistic or achieves happiness through self-delusion. Also fig.

1921 Deming (New Mexico) Headlight 30 Sept. 1/1 If the republicans can extract even a grain of comfort from the realities of the New Mexico situation they are the prize Pollyannas of the universe! 1939 P. G. WODEHOUSE Uncle Fred in Springtime xv. 218 The Ovens home-brewed is a liquid Pollyanna, for ever pointing out the bright side and indicating silver linings. 1964 B. HARDY Appropriate Form iii. 57 Robinson Crusoe is a prototype Pollyanna, comparing what is bad with what might have been much worse. 2003 High Country News 27 Oct. 18/2 Although the authors conclude that ecological sustainability is slowly gaining ground, they are no pollyannas.



Mark J. Carney, Governor of the Bank Of Canada:

Bank of Canada website, News Items.

Opening statement by Mark Carney, Governor of the Bank of Canada, at a press conference following the release of the Monetary Policy Report Update, 22 January 2009.

Good morning. We are pleased to be here with you today to discuss the January Monetary Policy Report Update, which we published this morning.

The outlook for the global economy has deteriorated since the October Monetary Policy Report, with the intensifying financial crisis spilling over into real economic activity. Heightened uncertainty is undermining business and household confidence worldwide and further eroding domestic demand. Major advanced economies, including Canada's, are now in recession, and emerging-market economies are increasingly affected. Commodity prices – especially energy prices – have fallen as a result of substantially weaker global demand.

Stabilization of the global financial system is a precondition for economic recovery. To that end, governments and central banks are taking bold and concerted policy actions. There are signs that these extraordinary measures are starting to gain traction, although it will take some time for financial conditions to normalize. In addition, considerable monetary and fiscal policy stimulus is being provided worldwide.

Canadian exports are down sharply, and domestic demand is shrinking as a result of declines in real income, household wealth, and confidence. Canada's economy is projected to contract through mid-2009, with real GDP dropping by 1.2 per cent this year on an annual average basis. As policy actions begin to take hold in Canada and globally, and with support from the past depreciation of the Canadian dollar, real GDP is expected to rebound, growing by 3.8 per cent in 2010.

A wider output gap through 2009 and modest decreases in housing prices should cause core CPI inflation to ease, bottoming at 1.1 per cent in the fourth quarter. Total CPI inflation is expected to dip below zero for two quarters in 2009, reflecting year-on-year drops in energy prices. With inflation expectations well-anchored, total and core inflation should return to the 2 per cent target in the first half of 2011 as the economy returns to potential.

Global developments pose significant upside and downside risks to the inflation projection. On the upside, the global economy could be stronger, if global fiscal stimulus turns out to be more expansionary than expected, or if aggressive policy actions taken across major economies restore confidence more quickly than projected. On the downside, the global recession could be deeper and more protracted because financial conditions take longer to normalize. The Bank judges that these risks are roughly balanced.

Against this background, the Bank lowered its policy rate by 50 basis points on Tuesday to 1 per cent, bringing the cumulative monetary policy easing to 350 basis points since December 2007. Guided by Canada's inflation-targeting framework, we will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent target over the medium term. Low, stable, and predictable inflation is the best contribution monetary policy can make to long-term economic growth and financial stability.



Remarks by Mark Carney, Governor of the Bank of Canada, to the Halifax Chamber of Commerce, 27 January 2009.

Inflation Targeting in a Global Recession

It's always a pleasure to be in Halifax, a city steeped in history and rich in spirit – a spirit that this Chamber has embodied for centuries, with roots dating back to 1750.

Indeed, I am always struck when I come here by how successfully this city celebrates its past, even as it prepares for the future. This dynamism is recognized in the nominees for this year's Halifax Business Awards in the current issue of "Business Voice."

I am honoured to be part of your "Distinguished Speakers Series," although my colleagues tell me that "distinguished" is just something people call you when you reach a certain age. I have certainly aged since I became Governor, but I will gratefully accept anything that could be interpreted as a compliment. In these challenging times, you take what you can get.

These are challenging times, indeed. We are facing a financial crisis without comparison for generations. Most financial markets have experienced historic declines in prices and unprecedented spikes in volatility. Storied financial institutions have fallen. The global capital market is under great strain. Issues of financial stability that were once the obsession of a pessimistic few are now the daily concern of many.

In response, governments and central bankers have taken bold measures. More initiatives are likely in the coming weeks. These measures will work, although it will take time for confidence to return and for capital to flow once again. In the interim, the sudden, synchronized slowdown across the globe will mean lost jobs and foregone output. This global recession has lessened concerns about rising inflation – concerns that seemed all too real just a few months ago, with soaring prices of fuel, food, and other commodities. In some countries, though, these have given way to concerns that the opposite problem – deflation – might materialize.

In challenging times such as these, people, rightly, look to a few constants: to institutions they can rely upon and to certain expectations that will be met. My message today is that Canadians can rely on the Bank of Canada to fulfill its mandate; they can expect inflation to be low, stable and predictable. The relentless focus of monetary policy on inflation control is essential in this time of financial crisis and global recession and remains the best contribution that monetary policy can make to the economic and financial welfare of Canada.

Inflation, Disinflation, and Deflation

Inflation is, of course, defined as a persistent increase in the average price of goods and services; in other words, a rising trend in the cost of living. In the broadest terms, this is measured by the total, or headline, consumer price index (CPI), which tracks the retail prices of a representative "shopping basket" of goods and services over time. It is also the rate that the Bank of Canada targets for its monetary policy.

Disinflation occurs when there is a decline in the rate of increase in prices, while deflation refers to a sustained fall in prices; where the annual change in the CPI actually turns negative year after year.

Those of you "distinguished" enough to remember the inflation of the 1970s and 1980s may wonder why anyone – particularly a central banker – might be concerned with too low a level of inflation or even a fall in the general price level. The answer is that we are not concerned if these periods are transitory. In fact, as I will discuss in a moment, the Bank expects total CPI inflation to be below zero in the second and third quarters of this year before returning to the two per cent target by 2011.

While such transitory movements in prices are generally harmless over the long term, greater risks arise from a sustained fall in prices. Such deflation, if left unchecked, can weigh on economic activity in two main ways. First, it increases the real burden of debt, making it more difficult for indebted households to consume and leveraged firms to invest. Second, if deflationary expectations take hold, purchases and investments may be postponed in the expectation that they can be executed at a lower price at a later date. After all, if prices are falling, why buy that new car or refrigerator – or invest in technology or equipment – when they could be cheaper in six or nine month's time?

A mild deflation took hold in Japan in the 1990s and was associated with a lost decade of missed economic opportunity. Today in the United States, the economy is in the midst of a serious recession and, with the recent dip in U.S. total CPI inflation to below zero, concerns about the possibility of deflation there have increased. Recognizing the risks, the Federal Reserve is responding proactively and presciently – cutting interest rates effectively to zero and committing to using "all available tools" to maintain price stability.

With this backdrop, the question is being asked whether sustained deflation could happen here in Canada. The possibility is actually remote for three reasons.

First is the resilience of our economy. The Canadian economy has a number of advantages: labour, product, and capital markets that are flexible and open; one of the soundest banking systems in the world; and households, corporations, and a public sector that have considerable financial flexibility. So while our economy will be tested by the current global crisis, it is well positioned to respond.

Second, a floating currency means that we have an independent monetary policy. Quite simply, we are in control of our own monetary destiny.

Third, we have used that monetary independence to great advantage. As one of the pioneers of inflation targeting, Canada has deep experience with the clearest, most powerful monetary policy framework. The advantages of that framework have been demonstrated, with inflation brought down and kept low and stable since the early 1990s, and they are equally relevant in times of disinflationary pressures. To underscore this point, and before turning to the outlook for growth and inflation, let me review the Bank's monetary policy framework.

Inflation Targeting

In its simplest terms, monetary policy is concerned with how much money circulates in the economy, and what that money is worth. The single, most direct contribution that monetary policy can make to sound economic performance is to provide Canadians with confidence that their money will retain its purchasing power. That means keeping inflation low, stable and predictable. Monetary policy makers have learned over decades that it pays to be precise about this objective.

The cornerstone of the Bank's monetary policy framework, therefore, is its inflation target which since 1991 has been set jointly with the Government of Canada. The target aims to keep the annual rate of inflation, as measured by the CPI, close to 2 per cent – the midpoint in a range of between 1 and 3 per cent.

The agreement sets out one clear objective – the inflation target – and the Bank is accountable to Canadians through its open and transparent communication of success in achieving that objective. If inflation deviates from the target, the Bank will explain the reasons why, what it will do to return it to target, and how long the process is expected to take. Our Monetary Policy Report Update, released last Thursday, is an example of that communication.

Canada has been served extremely well by its inflation-targeting policy framework, which has been widely emulated. Since the targets were initiated, the rate of inflation, as measured by the CPI, has averaged very close to 2 per cent. The Bank's exemplary record of inflation control has meant that we have avoided the destructive effects of high inflation prevalent in earlier decades – effects that were disproportionately felt by poorer Canadians, and that reduced our living standards and increased our unemployment. As in other countries where inflation targeting has been adopted, inflation and interest rates have generally been lower and less volatile.

It is important to underline that the Bank approaches inflation control in a symmetric way. This means that we care as much about inflation below the target as about inflation above the target. Just as inflation targeting has proven its ability to prevent the entrenchment of high and volatile inflation, it also has the power to prevent the onset of persistent deflation.

Expectations and the 2 per cent Target

When a shock threatens to push inflation either above or below the target range, the Bank of Canada will act to bring inflation back to the 2 per cent target. This certainty – that the Bank will act – helps to keep expectations of future inflation close to the inflation target. Economists call this "anchoring inflation expectations," and it brings a number of benefits: it helps to reduce swings in interest rates, lowers the cost of borrowing for Canadians, contributes to a more stable, competitive cost of capital for our companies and, ultimately, supports more sustainable growth in output and employment.

What matters most for economic decisions is the real interest rate, which is the nominal rate less the expected inflation rate over the relevant time horizon. Importantly, provided medium term inflation expectations remain well-anchored around the 2 per cent target, the Bank can keep real interest rates low even in the face of temporarily falling prices.

One of the realities of monetary policy is that it takes time to take effect. For this reason, it must be forward looking. To do that, we use a number of indicators to determine how serious and long-lasting inflation (and disinflationary) pressures might be.

Much as we aim for low, stable, and predictable inflation, there will always be sharp movements in total or headline inflation. These are generally driven by volatile price changes in a small number of goods and services. In Canada, for example, fully 90 per cent of the monthly variations in the CPI are linked to price changes in just 8 of the 54 major goods and services categories included in the index. Further, these price changes are often quickly reversed and can add considerable "noise" to total CPI, making it difficult to discern genuine movements in trend inflation.

For this reason, the Bank uses core inflation as an operational guide. By focusing on the more stable components, the Bank can get a better fix on the underlying trend in inflation. This is important because monetary policy operates with long and variable lags, and any attempt to control short-term movements in inflation is likely to prove counterproductive, destabilizing both inflation and real economic activity.

Our experience in Canada has shown that core inflation is a better tool for discerning inflation trends than is total CPI. Indeed, when the two deviate, total CPI inflation tends to converge on core inflation rather than the reverse. When total inflation temporarily moves higher or lower than the target, households and businesses know that it will probably return to target within a relatively short time.

The present situation offers a compelling example. When there is a sudden and persistent shock, as we have seen in the past few months from outside our borders, the immediate effects may be felt before the full effect of the monetary policy response kicks in. However, these monetary actions will have an impact on economic output and will bring inflation back to the target.

Current Outlook

With this background, let me turn now to the current economic climate and its implications for inflation.

The outlook for the world economy has deteriorated significantly in recent months. The financial crisis intensified last autumn and spilled over into an already weak global economy. This, in turn, put further strains on the global financial system, increased uncertainty and sharply reduced the confidence of businesses. The major advanced economies, including Canada, are now in recession, and emerging-market countries are increasingly affected. In response to the sudden downturn in global demand, energy prices have fallen further, and global inflationary pressures have abated rapidly.

Stabilization of the global financial system is a precondition for economic recovery. To that end, governments and central banks are taking bold and concerted actions. There are signs that these extraordinary measures are starting to gain traction, although more will be required and it will take some time for financial conditions to return to normal. In addition, considerable monetary and fiscal policy stimulus is being provided worldwide.

As a result of these global developments, Canada's economic growth is expected to decline through mid-2009. Canadian exports are already falling sharply because of the downturn in external demand, especially from the United States. Here at home, demand is also declining as Canadians households experience a reduction in their net worth. This reflects lower commodity prices, as well as steep declines in consumer and business confidence.

That said, the Canadian economy is expected to begin recovering later this year and to accelerate to above-potential growth in 2010 as policy actions begin to take hold and with support from the past depreciation of the Canadian dollar. On an annual average basis, then, real GDP is projected to decline by 1.2 per cent in 2009 and to rebound by 3.8 per cent in 2010.

What does this mean for inflation? It means that we should expect a temporary divergence between headline and core inflation in the coming quarters. Reflecting the sharp year-on-year falls in energy prices (and assuming that energy prices follow recent prices in the oil futures markets), total CPI inflation should fall relatively abruptly, dipping below zero in the second and third quarters of 2009.

I want to emphasize that this projected brief period of falling prices does not signal the onset of deflation for four reasons. First, most prices will not, in fact, be falling. At present, the prices of more than half the goods in the CPI basket are actually rising at more than the 2 per cent target.

Second, while core CPI inflation in Canada should ease through 2009, its anticipated low should be 1.1 per cent in the fourth quarter of this year – still within the target range for total CPI.

Third, consistent with the past experience that I referred to earlier, and reflecting the accommodative stance of monetary policy, we expect total CPI inflation to begin to converge towards core, starting at the end of this year, reaching 2 per cent by mid 2011.

Fourth, we should again see the benefit of well-anchored inflation expectations in helping to return actual inflation to the target. While measures of near-term inflation expectations have been volatile recently, reflecting the sharp swings in energy prices, over the longer term, they remain well anchored at 2 per cent. Indeed, the Consensus Economics' forecast for total CPI inflation in 2009 fell to 0.7 per cent in January, but moves back up to 1.9 per cent for 2010. Consensus expectations farther out remain at 2 per cent.

This pattern in near- and medium-term inflation expectations is very similar to what we saw during the sharp commodity-price spike last spring. At that time, short-term expectations moved up sharply while medium term expectations remained anchored at 2 per cent. These expectations proved to be well justified as total inflation fell back into line with core inflation.

The Ongoing Effectiveness of Monetary Policy

The Bank's projection of an economic recovery reflects, in part, the monetary easing that we have already put in place – cutting the policy rate by 350 basis points since December 2007. Guided by its forward-looking framework, the Bank began cutting interest rates sooner – and has cut deeper – than most other central banks. With the usual lag, these moves will have a powerful impact on economic activity and inflation.

Nonetheless, some are questioning, with rates already so low and global credit markets strained, whether the Bank's moves can still have an effect.

We know from experience that inflation control works much more predictably when there are well-functioning financial markets operating within a sound and stable financial system. The Canadian system has been under some strain since the onset of global difficulties, but it is important to keep those strains in perspective.

It bears repeating that the Canadian banking system does not face the same challenges as those in other major economies. Canadian banks had modest exposures to the U.S. subprime market and other complex structured products. More importantly, our banks are better capitalized and substantially less leveraged than their international peers. In contrast to many international banks, which face enormous pressures to scale back their assets and liabilities to bring them into line with their capital, Canadian banks have actually been raising private capital to grow their businesses. Indeed, over the past year, they have raised over $15 billion in Tier 1 capital from the private capital markets.

Consequently, Canadian banks continue to lend. This is significant, because banks are a more important part of our financial system than in many other countries, and their relative strength means that total credit is continuing to grow in Canada. That said, we expect this credit growth to slow in the coming months as result of declining demand during the recession.

It is worth noting that our lower overnight rates have largely been passed through at shorter maturities. Since the easing cycle began in December 2007, we have lowered the overnight rate by 350 basis points. The prime rate has fallen by 325 basis points, Bankers Acceptance rates (key short-term financing instruments for corporations) have fallen by about 380 basis points, and variable rate mortgages by about 185 basis points.

At longer maturities, the declines have been more modest. In part, this reflects the typical pattern, as long-term rates tend to be less volatile than short-term rates over the business cycle. For example, five-year fixed-rate mortgages have fallen by just over one and a half percentage points. Corporate bond yields have been virtually flat, as a substantial increase in the risk premium charged by investors has offset the decline in government bond yields. While the widening of spreads at longer maturities is larger than usual, this partly reflects the fact that these spreads were unusually narrow to begin with.

The Bank has taken into consideration the higher risk premiums demanded in today's markets in setting its overnight rate. As well, it has taken into account the effect on future Canadian inflation of the lower level of foreign demand that has resulted, in part, from financial difficulties in other countries. The policy rate is lower than it otherwise would be in the absence of these difficulties.

Finally, the role of the exchange rate in monetary policy should not be overlooked. The substantial past depreciation of the Canadian dollar provides an important offset to weaker global demand and lower commodity prices.

Conclusion

To conclude, let me say that the inflation target that has served Canada so well when inflation was above the 1 to 3 per cent control range, will also serve it well when inflation falls temporarily below that range. So let me leave no doubt, no uncertainty about the Bank's commitment. Our focus is clear, our actions consistent, and our objective explicit: 2 per cent CPI inflation.

Guided by Canada's inflation-targeting framework, the Bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent target over the medium term. The Bank retains considerable policy flexibility, which we will use as required.

While the current financial crisis presents challenges for policy-makers and citizens alike, Canada faces those challenges from a position of strength. In time, the global financial crisis will end, and the global economy will recover, although the speed with which this will happen is subject to a high degree of uncertainty.

As we work through this difficult period, you can be assured that the Bank of Canada remains relentless in its focus on keeping inflation low, stable, and predictable – the most important contribution we can make to the economic and financial welfare of Canada.



Opening statement by Mark Carney, Governor of the Bank of Canada, to the House of Commons Standing Committee on Finance, 10 February 2009.

Good morning. Paul and I are pleased to appear before this committee to discuss the Bank of Canada's perspective on the current state of the domestic and global economies.

Let me state at the outset that the speed and synchronized nature of the recent global downturn has resulted in a heightened degree of uncertainty, which is evident in the diverse views on the outlook. Indeed, it is safe to say that the degree of uncertainty – the range of possible outcomes – is greater than the range of point forecasts. It is in this environment that considerable policy actions are being taken globally: the provision of liquidity to stabilize global financial markets, the write-down of assets and the re-capitalization of institutions, and macroeconomic policy measures to boost aggregate demand. A considered and coherent perspective on the likely success of these policies importantly shapes our view of the outlook for the global and Canadian economies.

Global Outlook – Sudden, Synchronized, and Deep Recession

The outlook for the global economy has deteriorated significantly in recent months. What began last autumn as a relatively controlled slowdown has become a sudden, synchronized, and deep global recession. The proximate cause was the intensification of the global financial crisis owing to both the failures of several prominent global financial institutions and the growing realization that this was a solvency crisis rather than a liquidity crisis. The recession that originated in the United States is now spreading globally through confidence, financial, and trade channels.

In the process, the inevitable correction of unsustainably large current account imbalances in several major economies is now under way. For example, we project that the U.S. current account deficit will narrow to 3 per cent of GDP in 2009, about half its size in 2006. The sustainable rebalancing of global domestic demand from deficit countries such as the United States and the United Kingdom towards surplus countries such as China and Germany will take some time and is likely to dampen the pace of global growth during that period.

In the Bank's January Monetary Policy Report Update, we projected that global economic growth will be tepid this year – just 1.1 per cent – before rebounding mildly to a below-trend rate of 3.7 per cent in 2010. As part of that projection, we expect that the eventual U.S. recovery will be much slower than usual. For example, we project that it will take two and half years from the onset of the recession for U.S. GDP to return to its pre-recession level. This sluggishness reflects the lingering effects of the crisis on the U.S. financial system and the slow recovery of domestic consumption owing to the magnitude of wealth effects and the deterioration in the labour market.

Reflecting the seriousness of the shock, the global macroeconomic policy response has been unprecedented. In the wake of the intensification of the crisis, monetary policy rates have been substantially and rapidly reduced in most major economies. Fiscal policy initiatives have also been robust, with the world well on its way to spending an average of more than 2 per cent of global GDP in discretionary fiscal measures. These measures will replace some of the lost private demand and – equally importantly – create a window for the necessary rebalancing of global growth. Simultaneous fiscal action is not only more powerful than measures taken in isolation, but also has the potential to provide some support for commodity prices. Given typical lags, the effects of these monetary and fiscal policies will be felt increasingly over the course of this year and 2010.

Canadian Outlook – Sharp Recession and Milder-Than-Usual Recovery

The global downturn and declining demand for our exports will make this a very difficult year for Canada's economy. We are now in recession with GDP projected to fall by 1.2 per cent this year. The first half of the year will be particularly challenging with sharp falls in activity and increases in unemployment. Unfortunately, last Friday's employment report is broadly consistent with our outlook. The 14 per cent drop in our terms of trade since July will translate into a significant reduction in Canadian incomes and thus in our ability to sustain real domestic spending in the economy. Losses by Canadians on their financial holdings, either directly or via their pension funds, and concerns about the employment outlook will also restrain domestic consumption this year. Uncertainty about the economic outlook and strained financial conditions should lead to declines in investment spending this year.

In our base-case projection, real GDP is expected to rebound in 2010, growing by 3.8 per cent. Though seemingly impressive when viewed from the depths of a recession, such a recovery is actually more muted than usual. The recovery should be supported by:

- the timeliness and scale of our monetary policy response;
- our relatively well-functioning financial system and the gradual improvements in financial conditions in Canada next year;
- the past depreciation of the Canadian dollar;
- stimulative fiscal policy measures;
- the rebound in external demand in 2010, particularly in emerging markets, and the associated firming of commodity prices;
- the strengths of Canadian household, business, and bank balance sheets; and
- the end of the stock adjustments in Canadian and U.S. residential housing.

A wider output gap and modest decreases in housing prices should cause core CPI inflation to ease through 2009, bottoming out at 1.1 per cent in the fourth quarter. Total CPI inflation is expected to dip below zero for two quarters in 2009, reflecting year-on-year drops in energy prices. The Bank views the possibility of deflation in Canada as remote.

Indeed, with inflation expectations well anchored, total and core inflation should return to the 2 per cent target in the first half of 2011 as the economy moves back to its production potential. Of course, global developments pose significant upside and downside risks to the inflation projection. The Bank judges that these risks are roughly balanced.

Uncertainty and the Need for Policy Action

As I noted at the outset, in the current environment the Bank's projections – and those of all forecasters – are subject to an unusually high degree of uncertainty.

As we have consistently emphasized, stabilization of the global financial system is a precondition for economic recovery globally and in Canada. To that end, throughout the world, policy-makers have acted aggressively and creatively. Central banks have provided unprecedented liquidity to keep the financial system functioning. Last October, extraordinary steps were taken by all G-7 countries to prevent systemic collapse and to promote the effective functioning of money and credit markets.

The task is far from complete. Decisions taken in the coming weeks in the United States and in other major economies to isolate toxic assets in order to create a core of "good" banks will be critical. In addition, G-20 countries need to act in concert to improve domestic and international regulatory frameworks. In this regard, measures to improve transparency and integrity, to implement a macro-prudential approach to regulation, and to adequately resource the IMF are vital.

If these national and multilateral measures are not timely, bold, and well-executed, Canada's economic recovery will be both attenuated and delayed. The reality is that the financial crisis and subsequent recession originated beyond our borders and the necessary triggers for a sustainable recovery must be found there as well. Canada has much to offer to these efforts, which is why the Bank is working closely and tirelessly with our international colleagues.

At home, the Bank has acted decisively. We have eased monetary policy by 350 basis points since December 2007, including 250 basis points since the start of October. In doing so, we cut rates deeper and sooner than most other major central banks. With the strains in our financial system considerably less than elsewhere, monetary conditions have eased significantly in Canada since the start of the crisis. In fact, we are entering this recession with negative real interest rates – an unprecedented situation. In time, this will have a powerful impact on economic activity and inflation.

Guided by Canada's inflation-targeting framework, we will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent target over the medium term. The Bank retains considerable policy flexibility, which we will use if required.

In challenging times such as these, people, rightly, look to a few constants: to institutions that they can rely upon and to certain expectations that will be met. Canadians can rely on the Bank of Canada to fulfill its mandate; they can expect inflation to be low, stable, and predictable. The relentless focus of monetary policy on inflation control is essential in this time of financial crisis and global recession and remains the best contribution that monetary policy can make to the economic and financial welfare of Canada.



U.S. Is Pressed to Add Billions to Bailouts, February 23, 2009, Edmund L. Andrews, Andrew Ross Sorkin, Mary Williams Walsh, Eric Dash, Michael J. de la Merced.

The government faced mounting pressure on Monday to put billions more in some of the nation’s biggest banks, two of the biggest automakers and the biggest insurance company, despite the billions it has already committed to rescuing them.

The government’s boldest rescue to date, its $150 billion commitment for the insurance giant American International Group, is foundering. A.I.G. indicated on Monday it was now negotiating for tens of billions of dollars in additional assistance as losses have mounted.

Separately, the Obama administration confirmed it was in discussions to aid Citigroup, the recipient of $45 billion so far, that could raise the government’s stake in the banking company to as much as 40 percent.

The Treasury Department named a special adviser to work with General Motors and Chrysler, two of Detroit’s biggest automakers, which are seeking $22 billion on top of the $17 billion already granted to them.

All these companies’ mushrooming needs reflect just how hard it is to stanch the flow of losses as the economy deteriorates. Even though the government’s finances are being stretched — and still more aid might be needed in the future — it is being forced to fill the growing holes in the finances of these companies out of fear that the demise of an important company could set off a chain reaction.

The deepening global downturn is dragging down all kinds of businesses, and, with no bottom to the recession in sight, investors sent the the Dow industrials down 250.89 points, or 3.7 percent, to 7,114.78, a 3.7 percent drop for the day and a loss of about 50 percent from their peak in the fall of 2007. Asian markets followed suit on Tuesday by flirting with the lows they hit last October, with stocks in Hong Kong dropping more than 3 percent, and Japan's Nikkei 225 index dropping more than 2 percent before rebounding slightly.

In an unexpectedly assertive joint statement after two weeks of bank stock declines, the Treasury Department, the Federal Reserve and federal bank regulatory agencies announced that the government might demand a direct ownership stake in major banks that do not have enough capital to weather a deeper downturn. The government will begin conducting a test of the banks’ financial health this week.

Administration officials emphasized that nationalizing any of the major banks was their least favorite solution to the banking crisis, but they acknowledged that some banks might be both too big to fail and too fragile to endure another round of shocks without substantial help.

Banks that fail the test will have to raise additional capital. If they are unable to raise capital in the private market, they would have to take money from the government in exchange for preferred stock that would be convertible into common shares, thus giving the government a bigger stake.

The administration is debating how big a role to play in the auto businesses, what concessions the companies should make in return for aid and whether bankruptcy should be considered, though it prefers a private sector solution.

On Monday, Steven Rattner, co-founder of a private equity firm, the Quadrangle Group, was named an adviser to the Treasury on the auto industry.

As the administration takes bigger stakes in companies, the value held by existing shareholders is being diluted, which could make it even harder to attract private money in the future.

Timothy F. Geithner, the secretary of the Treasury, recently outlined a bank recovery plan that included a program to attract a combination of public and private money to buy troubled mortgages and other assets.

A.I.G. serves as a cautionary note about the difficulty of luring private investors when the size of the losses is unknown. In the months since the government initially stepped in last fall to take an 80 percent stake in the insurer, the company has suffered deepening losses and has been forced to post more collateral with its trading partners.

The company, according to a person close to the negotiations, is discussing the prospect of converting the government’s $40 billion in preferred shares into common equity.

The prototype could turn out to be Citigroup, which is negotiating with regulators to replace the government’s nonvoting preferred shares with shares that are convertible into common stock.

“We absolutely believe that our private banking system is best off being in private hands and we are trying our best to keep it that way,” said one senior administration official, who spoke on condition of anonymity. But, he continued, the government is already deeply involved in propping up the banking system and may have no choice.

Officials said they were bracing for the possibility of new problems that might indeed require the government to take a more aggressive stance.

“Given our involvement at this particular stage, there is an element, a possibility over time, that we will end up with some ownership of these institutions,” the official said. “This is really about aggressive anticipatory action. It is an acceptance that the future is uncertain, but that we can plan on a certain basis for it.”

Acquiring common stock would give the government more control, but expose it to more risk. Armed with voting shares, government officials would have more power to replace management and change company strategy. But the Treasury would lose its claim to dividend payments, which in Citigroup’s case amount to more than $2.25 billion a year.

A.I.G. declined to provide details of its new financial problems, citing the “quiet period” just before it issues fourth-quarter results. But some people familiar with A.I.G.’s negotiations said it was on the brink of reporting one of the biggest year-end losses in American history.

Such losses lead to a bigger problem. A further credit rating downgrade would force the company to raise more capital, according to a person involved in the negotiations. The losses appeared to be across the board, unlike the insurer’s losses of last September, which were confined mostly to derivative contracts called credit-default swaps.

A.I.G. has not been writing new credit-default swap contracts, and had tried to put the swaps disaster behind it. In November the company worked out a relief package with the Federal Reserve Bank of New York, in which the most toxic of its swap contracts were put into a kind of quarantine, so they could no longer hurt its balance sheet. But A.I.G. had written several other classes of credit-default swaps, which it kept on its books.

If the latest round of losses severely weaken A.I.G.’s capital and its creditworthiness, then its swap counterparties may be entitled to demand that A.I.G. come up with a large amount of cash for collateral — precisely the problem that brought the company to its knees last September.

“They stand, unfortunately, to bring others down with them if they go down,” said Donn Vickrey of Gradient Analytics, an independent research firm.

The difficulty of shoring up A.I.G. must weigh on the administration at this moment. The administration’s banking statement amounted to a plan of action demonstrating a way to demand a major and possibly a controlling stake in systemically important banks like Citigroup and Bank of America.

“They are desperate to not nationalize the banks,” said Robert J. Barbera, chief economist at ITG. “They know what happened when they took Iraq and they would just as soon not take over the banks, because if you own it, you gotta fix it.”



Adding Up the Government’s Total Bailout Tab, Matthew Ericson, Elaine He, Amy Schoenfeld, February 4, 2009.

Beyond the $700 billion bailout known as TARP, which has been used to prop up banks and car companies, the government has created an array of other programs to provide support to the struggling financial system. Through Feb. 19, the government has made commitments of nearly $8.8 trillion and spent $2 trillion. Here is an overview, organized by the role the government has assumed in each case.

The Government as Investor: Committed: $4.6 trillion, Spent: $1.1 trillion.

Includes direct investments in financial institutions, purchases of high-grade corporate debt and purchases of mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae.

Commercial paper - The Federal Reserve has become the buyer of last resort in the $1.6 trillion commercial paper market. Committed: $1.6 trillion, Spent: $247 billion.

Public-private investment fund - This fund, which is not operational yet, will seek private investors and use a combination of private and public money to buy nonperforming assets from banks. Committed: $1.0 trillion, Spent: $0 billion.

Troubled Asset Relief Program (TARP) - In return for bailout cash, the Treasury now owns stock in hundreds of banks, General Motors, Chrysler and the insurer A.I.G. The two largest recipients are Bank of America ($45 billion) and Citigroup ($45 billion cash and $5 billion in support of a loan guarantee). Committed: $700 billion, Spent: $510 billion

TARP Details:

Amounts below are in millions. The Texas ratio is a ratio of each bank's nonperforming loans to cash on hand. The higher the number, the worse the bank's health. Date Company Type Headquarters Expected investment Funds awarded Texas ratio

Jan. 16 CitigroupCitigroup Bank New York $50,000 Yes 15.4
Jan. 16 Bank of AmericaBank of America Bank Charlotte, N.C. $45,000 Yes, three allocations 15.4
Nov. 25 A.I.G.A.I.G. Insurer New York $40,000 Yes N.A.
Oct. 28 JPMorgan ChaseJPMorgan Chase Bank New York $25,000 Yes 8.3
Oct. 28 Wells FargoWells Fargo Bank San Francisco $25,000 Yes 14.0
Feb. 17 General MotorsGeneral Motors Automaker Detroit $14,284 Yes, four allocations N.A.
Oct. 28 Goldman Sachs GroupGoldman Sachs Group Bank New York $10,000 Yes N.A.
Oct. 28 Morgan StanleyMorgan Stanley Bank New York $10,000 Yes N.A.
Dec. 31 PNC Financial Services GroupPNC Financial Services Group Bank Pittsburgh $7,579 Yes 15.1
Nov. 14 U.S. BancorpU.S. Bancorp Bank Minneapolis $6,599 Yes 9.9
Dec. 29 GMAC Financial ServicesGMAC Financial Services Specialty lender New York $5,000 Yes N.A.
Dec. 31 SunTrust BanksSunTrust Banks Bank Atlanta $4,850 Yes, two allocations 32.3
Jan. 02 ChryslerChrysler Automaker Auburn Hills, Mich. $4,000 Yes N.A.
Nov. 14 Capital One FinancialCapital One Financial Bank McLean, Va. $3,555 Yes 5.1
Nov. 14 Regions FinancialRegions Financial Bank Birmingham, Ala. $3,500 Yes 21.2
Dec. 31 Fifth Third BancorpFifth Third Bancorp Bank Cincinnati $3,408 Yes 31.5
Jan. 09 American ExpressAmerican Express Specialty lender New York $3,389 Yes N.A.
Nov. 14 BB&TBB&T Bank Winston-Salem, N.C. $3,134 Yes 19.4
Oct. 28 Bank of New York MellonBank of New York Mellon Bank New York $3,000 Yes 4.9
Nov. 14 KeyCorpKeyCorp Bank Cleveland $2,500 Yes 14.6
Dec. 31 CIT GroupCIT Group Specialty lender New York $2,330 Yes N.A.
Nov. 14 ComericaComerica Bank Dallas $2,250 Yes 15.6
Oct. 28 State StreetState Street Bank Boston $2,000 Yes 0.0
Nov. 14 Marshall & IlsleyMarshall & Ilsley Bank Milwaukee $1,715 Yes 30.6
Nov. 14 Northern TrustNorthern Trust Bank Chicago $1,576 Yes 1.4
Jan. 16 Chrysler FinancialChrysler Financial Specialty lender Farmington Hills, Mich. $1,500 Yes N.A.
Nov. 14 Zions BancorporationZions Bancorporation Bank Salt Lake City $1,400 Yes 22.9
Nov. 14 Huntington BancsharesHuntington Bancshares Bank Columbus, Ohio $1,398 Yes 28.4
Dec. 19 Synovus FinancialSynovus Financial Bank Columbus, Ga. $968 Yes 29.9
Dec. 05 PopularPopular Bank San Juan, P.R. $935 Yes 36.0
Nov. 14 First Horizon NationalFirst Horizon National Bank Memphis $867 Yes 33.9
Dec. 23 M&T BankM&T Bank Bank Buffalo, N.Y. $600 Yes 20.1
Nov. 21 Associated Banc-CorpAssociated Banc-Corp Bank Green Bay, Wis. $525 Yes 20.5
Nov. 21 City NationalCity National Bank Beverly Hills, Calif. $400 Yes 11.2
Nov. 21 Webster FinancialWebster Financial Bank Waterbury, Conn. $400 Yes 17.9
Jan. 16 First BanCorpFirst BanCorp Bank San Juan, P.R. $400 Yes N.A.
Dec. 23 Fulton FinancialFulton Financial Bank Lancaster, Pa. $377 Yes 15.1
Nov. 14 TCF FinancialTCF Financial Bank Wayzata, Minn. $361 Yes 17.9
Dec. 05 The South Financial GroupThe South Financial Group Bank Greenville, S.C. $347 Yes 23.5
Dec. 12 Wilmington TrustWilmington Trust Bank Wilmington, Del. $330 Yes 14.4
Dec. 05 East West BancorpEast West Bancorp Bank Pasadena, Calif. $307 Yes 18.5
Dec. 05 Sterling FinancialSterling Financial Bank Spokane, Wash. $303 Yes 45.4
Dec. 12 Citizens Republic BancorpCitizens Republic Bancorp Bank Flint, Mich. $300 Yes 32.0
Nov. 14 Valley National BancorpValley National Bancorp Bank Wayne, N.J. $300 Yes 5.9
Dec. 19 Whitney HoldingWhitney Holding Bank New Orleans $300 Yes 26.4
Dec. 12 Susquehanna BancsharesSusquehanna Bancshares Bank Lititz, Pa. $300 Yes 15.0
Nov. 14 UCBH HoldingsUCBH Holdings Bank San Francisco $299 Yes 31.8
Dec. 31 First BanksFirst Banks Bank Clayton, Mo. $295 Yes N.A.
Jan. 09 New York Private Bank & TrustNew York Private Bank & Trust Bank New York $267 Yes N.A.
Jan. 30 Flagstar Bancorp Flagstar Bancorp Bank Troy, Mich. $267 Yes N.A.
Dec. 05 Cathay General BancorpCathay General Bancorp Bank Los Angeles $258 Yes 19.6
Dec. 19 Wintrust FinancialWintrust Financial Bank Lake Forest, Ill. $250 Yes 19.1
Jan. 30 PrivateBancorp PrivateBancorp Bank Chicago $244 Yes N.A.
Dec. 12 SVB Financial GroupSVB Financial Group Specialty lender Santa Clara, Calif. $235 Yes 1.3
Dec. 23 International BancsharesInternational Bancshares Bank Laredo, Tex. $216 Yes 9.5
Nov. 21 TrustmarkTrustmark Bank Jackson, Miss. $215 Yes 19.0
Nov. 14 Umpqua HoldingsUmpqua Holdings Bank Portland, Ore. $214 Yes 22.7
Nov. 14 Washington FederalWashington Federal Bank Seattle $200 Yes 14.2
Dec. 05 MB Financial MB Financial Bank Chicago $196 Yes 21.3
Dec. 05 First Midwest BancorpFirst Midwest Bancorp Bank Itasca, Ill. $193 Yes 15.8
Nov. 21 First Niagara Financial GroupFirst Niagara Financial Group Bank Lockport, N.Y. $184 Yes 6.6
Nov. 21 Pacific Capital BancorpPacific Capital Bancorp Bank Santa Barbara, Calif. $181 Yes 27.2
Dec. 05 United Community BanksUnited Community Banks Bank Blairsville, Ga. $180 Yes 29.3
Nov. 21 Boston Private Financial HoldingsBoston Private Financial Holdings Bank Boston $154 Yes 29.9
Nov. 14 Provident BanksharesProvident Bankshares Bank Baltimore $152 Yes 19.5
Dec. 12 National Penn BancsharesNational Penn Bancshares Bank Boyertown, Pa. $150 Yes 5.1
Jan. 16 Dickinson FinancialDickinson Financial Bank Kansas City, Mo. $146 Yes N.A.
Nov. 21 Western Alliance BancorporationWestern Alliance Bancorporation Bank Las Vegas $140 Yes 12.6
Jan. 09 Central Pacific FinancialCentral Pacific Financial Bank Honolulu $135 Yes N.A.
Dec. 05 CVB FinancialCVB Financial Bank Ontario, Calif. $130 Yes 5.2
Jan. 09 FirstMeritFirstMerit Bank Akron, Ohio $125 Yes N.A.
Dec. 12 Sterling BancsharesSterling Bancshares Bank Houston $125 Yes 21.0
Nov. 21 BannerBanner Bank Walla Walla, Wash. $124 Yes 40.1
Dec. 12 Signature BankSignature Bank Bank New York $120 Yes 5.1
Feb. 20 First Merchants First Merchants Bank Muncie, Ind. $116 Yes N.A.
Jan. 23 1st Source1st Source Bank South Bend, Ind. $111 Yes N.A.
Jan. 30 Anchor BanCorp WisconsinAnchor BanCorp Wisconsin Bank Madison, Wis. $110 Yes N.A.
Jan. 30 W.T.B. Financial W.T.B. Financial Bank Spokane, Wash. $110 Yes N.A.
Jan. 16 S&T BancorpS&T Bancorp Bank Indiana, Pa. $109 Yes N.A.
Nov. 21 Taylor Capital GroupTaylor Capital Group Bank Rosemont, Ill. $105 Yes 63.3
Dec. 12 Old National BancorpOld National Bancorp Bank Evansville, Ind. $100 Yes N.A.
Dec. 23 Park NationalPark National Bank Newark, Ohio $100 Yes 27.7
Jan. 09 F.N.B.F.N.B. Bank Hermitage, PA $100 Yes N.A.
Dec. 12 Pinnacle Financial PartnersPinnacle Financial Partners Bank Nashville $95 Yes 10.4
Dec. 05 IberiabankIberiabank Bank Lafayette, La. $90 Yes 12.9
Jan. 09 Sun BancorpSun Bancorp Bank Vineland, NJ $89 Yes N.A.
Dec. 19 Plains Capital Plains Capital Bank Dallas $88 Yes N.A.
Dec. 05 Midwest Banc HoldingsMidwest Banc Holdings Bank Melrose Park, Ill. $85 Yes 44.9
Feb. 13 Westamerica Bancorporation Westamerica Bancorporation Bank San Rafael, Calif. $84 Yes N.A.
Dec. 19 Heartland Financial USAHeartland Financial USA Bank Dubuque, Iowa $82 Yes 24.7
Dec. 23 First Financial BancorpFirst Financial Bancorp Bank Cincinnati $80 Yes 6.7
Dec. 31 Hampton Roads BanksharesHampton Roads Bankshares Bank Norfolk, Va. $80 Yes N.A.
Jan. 09 Independent BankIndependent Bank Bank Rockland, Mass. $78 Yes N.A.
Nov. 21 Columbia Banking SystemColumbia Banking System Bank Tacoma, Wash. $77 Yes 28.9
Dec. 12 TowneBankTowneBank Bank Suffolk, Va. $76 Yes 1.0
Dec. 12 Bank of the OzarksBank of the Ozarks Bank Little Rock, Ark. $75 Yes 8.6
Jan. 16 Texas Capital BancsharesTexas Capital Bancshares Bank Dallas $75 Yes N.A.
Dec. 05 Wesbanco Bank Wesbanco Bank Bank Wheeling, W.Va. $75 Yes 10.3
Jan. 16 Old Second BancorpOld Second Bancorp Bank Aurora, Ill. $73 Yes N.A.
Dec. 23 Green BanksharesGreen Bankshares Bank Greeneville, Tenn. $72 Yes 25.7
Dec. 12 Independent BankIndependent Bank Bank Ionia, Mich. $72 Yes 66.0
Dec. 12 Virginia Commerce BancorpVirginia Commerce Bancorp Bank Arlington, Va. $71 Yes 36.8
Dec. 05 Southwest BancorpSouthwest Bancorp Bank Stillwater, Okla. $70 Yes 25.0
Dec. 19 Flushing FinancialFlushing Financial Bank Lake Success, N.Y. $70 Yes 8.6
Dec. 05 Superior BancorpSuperior Bancorp Bank Birmingham, Ala. $69 Yes 42.2
Nov. 21 Nara BancorpNara Bancorp Bank Los Angeles $67 Yes 14.5
Dec. 05 First Financial HoldingsFirst Financial Holdings Bank Charleston, S.C. $65 Yes 14.5
Jan. 09 First BancorpFirst Bancorp Bank Troy, N.C. $65 Yes N.A.
Jan. 16 SCBT FinancialSCBT Financial Bank Columbia, S.C. $65 Yes N.A.
Dec. 19 CoBiz FinancialCoBiz Financial Bank Denver $64 Yes 17.2
Dec. 12 Wilshire BancorpWilshire Bancorp Bank Los Angeles $62 Yes 8.4
Feb. 06 Lakeland Bancorp Lakeland Bancorp Bank Oak Ridge, N.J. $59 Yes N.A.
Dec. 19 Union BanksharesUnion Bankshares Bank Bowling Green, Va. $59 Yes 10.0
Dec. 05 Great Southern BancorpGreat Southern Bancorp Bank Springfield, Mo. $58 Yes 33.6
Jan. 23 Liberty BancsharesLiberty Bancshares Bank Jonesboro, Ark. $58 Yes N.A.
Jan. 16 MainSource Financial GroupMainSource Financial Group Bank Greensburg, Ind. $57 Yes N.A.
Dec. 12 Center FinancialCenter Financial Bank Los Angeles $55 Yes 3.2
Jan. 23 WSFS FinancialWSFS Financial Bank Wilmington, Del. $53 Yes N.A.
Feb. 13 FNB United FNB United Bank Asheboro, N.C. $52 Yes N.A.
Nov. 21 Ameris BancorpAmeris Bancorp Bank Moultrie, Ga. $52 Yes 26.2
Dec. 12 NewBridge BancorpNewBridge Bancorp Bank Greensboro, N.C. $52 Yes 26.3
Jan. 16 Home BancsharesHome Bancshares Bank Conway, Ark. $50 Yes N.A.
Dec. 19 BancTrust Financial GroupBancTrust Financial Group Bank Mobile, Ala. $50 Yes N.A.
Dec. 19 Seacoast Banking Corporation of FloridaSeacoast Banking Corporation of Florida Bank Stuart, Fla. $50 Yes 49.7
Jan. 16 State BanksharesState Bankshares Bank Fargo, N.D. $50 Yes N.A.
Dec. 19 Fidelity SouthernFidelity Southern Bank Atlanta $48 Yes 77.4
Feb. 20 BancPlus BancPlus Bank Ridgeland, Miss. $48 Yes N.A.
Dec. 12 The BancorpThe Bancorp Bank Wilmington, Del. $45 Yes N.A.
Jan. 16 MetroCorp BancsharesMetroCorp Bancshares Bank Houston, Tex. $45 Yes N.A.
Jan. 09 Cadence FinancialCadence Financial Bank Starkville, Miss. $44 Yes N.A.
Dec. 05 Southern Community FinancialSouthern Community Financial Bank Winston-Salem, N.C. $43 Yes 13.7
Dec. 19 Exchange BankExchange Bank Bank Santa Rosa, Calif. $43 Yes N.A.
Nov. 21 First Community BancsharesFirst Community Bancshares Bank Bluefield, Va. $42 Yes 4.3
Dec. 23 Sterling BancorpSterling Bancorp Bank New York $42 Yes 8.0
Dec. 12 Capital BankCapital Bank Bank Raleigh $41 Yes N.A.
Feb. 13 PremierWest Bancorp PremierWest Bancorp Bank Medford, Ore. $41 Yes N.A.
Nov. 21 Heritage CommerceHeritage Commerce Bank San Jose, Calif. $40 Yes 20.2
Feb. 13 Reliance Bancshares Reliance Bancshares Bank Frontenac, Mo. $40 Yes N.A.
Dec. 19 Berkshire Hills BancorpBerkshire Hills Bancorp Bank Pittsfield, Mass. $40 Yes N.A.
Nov. 21 Cascade FinancialCascade Financial Bank Everett, Wash. $39 Yes 15.8
Jan. 30 Peoples Bancorp Peoples Bancorp Bank Marietta, Ohio $39 Yes N.A.
Jan. 16 OceanFirst FinancialOceanFirst Financial Bank Toms River, N.J. $38 Yes N.A.
Feb. 13 QCR Holdings QCR Holdings Bank Moline, Ill. $38 Yes N.A.
Dec. 05 Eagle BancorpEagle Bancorp Bank Bethesda, Md. $38 Yes 20.5
Dec. 19 Bridgeview BancorpBridgeview Bancorp Bank Bridgeview, Ill. $38 Yes N.A.
Dec. 23 Financial InstitutionsFinancial Institutions Bank Warsaw, N.Y. $38 Yes 6.5
Dec. 05 First Defiance FinancialFirst Defiance Financial Bank Defiance, Ohio $37 Yes 20.5
Dec. 05 State BancorpState Bancorp Bank Jericho, N.Y. $37 Yes 11.5
Dec. 05 TIB FinancialTIB Financial Bank Naples, Fla. $37 Yes 29.4
Dec. 19 Fidelity FinancialFidelity Financial Bank Wichita, Kan. $36 Yes N.A.
Dec. 31 West BancorporationWest Bancorporation Bank West Des Moines, Iowa $36 Yes N.A.
Jan. 16 Yadkin Valley FinancialYadkin Valley Financial Bank Elkin, N.C. $36 Yes N.A.
Dec. 19 Marquette NationalMarquette National Bank Chicago $35.5 Yes N.A.
Nov. 21 Porter BancorpPorter Bancorp Bank Louisville, Ky. $35 Yes 15.5
Dec. 19 Enterprise Financial ServicesEnterprise Financial Services Bank St. Louis $35 Yes 22.5
Dec. 05 Encore BancsharesEncore Bancshares Bank Houston $34 Yes N.A.
Feb. 13 The Bank of Kentucky Financial The Bank of Kentucky Financial Bank Crestview Hills, Ky. $34 Yes N.A.
Feb. 06 First Market Bank First Market Bank Bank Richmond, Va. $34 Yes N.A.
Jan. 09 Centrue FinancialCentrue Financial Bank St. Louis $33 Yes N.A.
Jan. 09 First Security GroupFirst Security Group Bank Chattanooga, Tenn. $33 Yes N.A.
Jan. 16 Pulaski FinancialPulaski Financial Bank Creve Coeur, Mo. $33 Yes N.A.
Jan. 30 Firstbank Firstbank Bank Alma, Mich. $33 Yes N.A.
Dec. 23 MutualFirst FinancialMutualFirst Financial Bank Muncie, Ind. $32 Yes N.A.
Dec. 23 Parkvale FinancialParkvale Financial Bank Monroeville, Pa. $32 Yes N.A.
Dec. 05 Bank of North CarolinaBank of North Carolina Bank Thomasville, N.C. $31 Yes N.A.
Dec. 19 Bancorp Rhode IslandBancorp Rhode Island Bank Providence, R.I. $30 Yes N.A.
Dec. 19 Tennessee Commerce BancorpTennessee Commerce Bancorp Bank Franklin, Tenn. $30 Yes 16.9
Dec. 19 StellarOneStellarOne Bank Charlottesville, Va. $30 Yes 15.0
Dec. 19 Hawthorn BancsharesHawthorn Bancshares Bank Lee's Summit, Mo. $30 Yes N.A.
Jan. 09 Farmers Capital BankFarmers Capital Bank Bank Frankfort, Ky. $30 Yes N.A.
Jan. 30 First UnitedFirst United Bank Oakland, Calif. $30 Yes N.A.
Feb. 20 Royal Bancshares of Pennsylvania Royal Bancshares of Pennsylvania Bank Narberth, Pa. $30 Yes N.A.
Nov. 21 CenterState Banks of FloridaCenterState Banks of Florida Bank Davenport, Fla. $28 Yes 12.6
Dec. 05 Bank of Marin BancorpBank of Marin Bancorp Bank Novato, Calif. $28 Yes 0.8
Jan. 09 Colony BankcorpColony Bankcorp Bank Fitzgerald, Ga. $28 Yes N.A.
Dec. 19 Intermountain Community BancorpIntermountain Community Bancorp Bank Sandpoint, Idaho $27 Yes 25.3
Dec. 19 Alliance Financial Alliance Financial Bank Syracuse, N.Y. $27 Yes 6.0
Jan. 16 Washington BankingWashington Banking Bank Oak Harbor, Wash. $26 Yes N.A.
Dec. 19 Patriot BancsharesPatriot Bancshares Bank Houston $26 Yes N.A.
Dec. 23 HMN FinancialHMN Financial Bank Rochester, Minn. $26 Yes N.A.
Jan. 16 Citizens & NorthernCitizens & Northern Bank Wellsboro, Pa. $26 Yes N.A.
Nov. 21 HF FinancialHF Financial Bank Sioux Falls, S.D. $25 Yes 4.1
Dec. 12 LNB BancorpLNB Bancorp Bank Lorain, Ohio $25 Yes 27.9
Dec. 19 VIST FinancialVIST Financial Bank Wyomissing, Pa. $25 Yes 17.6
Dec. 19 First California Financial GroupFirst California Financial Group Bank Westlake Village, Calif. $25 Yes 10.4
Dec. 19 Horizon BancorpHorizon Bancorp Bank Michigan City, Ind. $25 Yes 10.2
Jan. 09 The First BancorpThe First Bancorp Bank Damariscotta, Me. $25 Yes 13.4
Dec. 23 Intervest Bancshares Intervest Bancshares Bank New York $25 Yes 50.9
Dec. 23 Peoples Bancorp of North CarolinaPeoples Bancorp of North Carolina Bank Newton, N.C. $25 Yes 14.5
Jan. 09 Crescent FinancialCrescent Financial Bank Cary, N.C. $25 Yes N.A.
Jan. 09 Shore BancsharesShore Bancshares Bank Easton, Md. $25 Yes N.A.
Jan. 23 Princeton National BancorpPrinceton National Bancorp Bank Princeton, Ill. $25 Yes N.A.
Jan. 30 Rogers Bancshares Rogers Bancshares Bank Little Rock, Ark. $25 Yes N.A.
Nov. 21 Heritage FinancialHeritage Financial Bank Olympia, Wash. $24 Yes 9.6
Dec. 23 Bridge Capital HoldingsBridge Capital Holdings Bank San Jose, Calif. $24 Yes 26.7
Jan. 09 Eastern Virginia BanksharesEastern Virginia Bankshares Bank Tappahannock, Va. $24 Yes N.A.
Jan. 09 Community Trust FinancialCommunity Trust Financial Bank Ruston, La. $24 Yes N.A.
Nov. 21 Severn BancorpSevern Bancorp Bank Annapolis, Md. $23 Yes 47.6
Jan. 23 First Citizens Banc CorpFirst Citizens Banc Corp Bank Sandusky, Ohio $23 Yes N.A.
Dec. 12 Indiana Community BancorpIndiana Community Bancorp Bank Columbus, Ind. $22 Yes 18.2
Dec. 19 Wainwright Bank & TrustWainwright Bank & Trust Bank Boston $22 Yes 1.2
Dec. 05 Blue Valley Ban CorpBlue Valley Ban Corp Bank Overland Park, Kan. $22 Yes 59.0
Jan. 30 Middleburg Financial Middleburg Financial Bank Middleburg, Va. $22 Yes N.A.
Feb. 13 Liberty Bancshares Liberty Bancshares Bank Springfield, Mo. $22 Yes N.A.
Feb. 20 Central Community Central Community Bank Temple, Tex. $22 Yes N.A.
Dec. 12 Citizens South BankingCitizens South Banking Bank Gastonia, N.C. $21 Yes 7.7
Dec. 05 Unity BancorpUnity Bancorp Bank Clinton, N.J. $21 Yes 18.1
Dec. 19 AmeriServ FinancialAmeriServ Financial Bank Johnstown, Pa. $21 Yes N.A.
Jan. 16 United BancorpUnited Bancorp Bank Tecumseh, Mich. $21 Yes N.A.
Jan. 16 The Baraboo BancorporationThe Baraboo Bancorporation Bank Baraboo, Wis. $21 Yes N.A.
Jan. 09 C&F FinancialC&F Financial Bank West Point, Va. $20 Yes N.A.
Jan. 09 MidSouth BancorpMidSouth Bancorp Bank Lafayette, La. $20 Yes N.A.
Jan. 16 BNCCORPBNCCORP Bank Bismarck, N.D. $20 Yes N.A.
Jan. 09 First Financial ServiceFirst Financial Service Bank Elizabethtown, Ky. $20 Yes N.A.
Nov. 21 First PacTrust BancorpFirst PacTrust Bancorp Bank Chula Vista, Calif. $19 Yes 46.6
Jan. 16 Bar Harbor BanksharesBar Harbor Bankshares Bank Bar Harbor, Me. $19 Yes N.A.
Jan. 16 Carver BancorpCarver Bancorp Bank New York $19 Yes N.A.
Dec. 12 HopFed BancorpHopFed Bancorp Bank Hopkinsville, Ky. $18 Yes N.A.
Feb. 13 Peoples Bancorp Peoples Bancorp Bank Lynden, Wash. $18 Yes N.A.
Dec. 19 Community Bankers TrustCommunity Bankers Trust Bank Glen Allen, Va. $18 Yes N.A.
Dec. 19 Security FederalSecurity Federal Bank Aiken, S.C. $18 Yes 13.3
Jan. 16 ECB BancorpECB Bancorp Bank Engelhard, N.C. $18 Yes N.A.
Nov. 14 Bank of Commerce HoldingsBank of Commerce Holdings Bank Redding, Calif. $17 Yes 30.8
Feb. 06 F & M Financial F & M Financial Bank Salisbury, N.C. $17 Yes N.A.
Dec. 23 Timberland BancorpTimberland Bancorp Bank Hoquiam, Wash. $17 Yes 16.7
Jan. 09 Codorus Valley BancorpCodorus Valley Bancorp Bank York, Pa. $17 Yes N.A.
Jan. 30 Guaranty Federal Bancshares Guaranty Federal Bancshares Bank Springfield, Mo. $17 Yes N.A.
Feb. 13 F&M Financial F&M Financial Bank Clarksville, Tenn. $17 Yes N.A.
Feb. 20 Northern States Financial Northern States Financial Bank Waukegan, Ill. $17 Yes N.A.
Feb. 20 Liberty Shares Liberty Shares Bank Hinesville, Ga. $17 Yes N.A.
Feb. 20 White River Bancshares White River Bancshares Bank Fayetteville, Ark. $17 Yes N.A.
Dec. 19 Pacific City FinancialPacific City Financial Bank Los Angeles $16.2 Yes N.A.
Nov. 14 1st Financial Services1st Financial Services Bank Hendersonville, N.C. $16 Yes 15.4
Feb. 06 Stockmens Financial Stockmens Financial Bank Rapid City, S.D. $16 Yes N.A.
Dec. 12 Valley FinancialValley Financial Bank Roanoke, Va. $16 Yes 4.5
Dec. 19 Community West BancsharesCommunity West Bancshares Bank Goleta, Calif. $16 Yes 31.0
Dec. 19 Tri-County FinancialTri-County Financial Bank Waldorf, Md. $16 Yes N.A.
Jan. 30 Parke BancorpParke Bancorp Bank Sewell, N.J. $16 Yes N.A.
Jan. 09 Carolina Bank HoldingsCarolina Bank Holdings Bank Greensboro, N.C. $16 Yes N.A.
Jan. 23 BankFirst CapitalBankFirst Capital Bank Macon, Miss. $16 Yes N.A.
Feb. 13 State Capital State Capital Bank Greenwood, Miss. $15 Yes N.A.
Dec. 12 LSBLSB Bank North Andover, Mass. $15 Yes 2.7
Dec. 19 Monarch Financial HoldingsMonarch Financial Holdings Bank Chesapeake, Va. $15 Yes 8.8
Dec. 23 Nicolet BanksharesNicolet Bankshares Bank Green Bay, Wis. $15 Yes N.A.
Jan. 16 Centra Financial HoldingsCentra Financial Holdings Bank Morgantown, W.Va. $15 Yes N.A.
Dec. 05 Oak Valley BancorpOak Valley Bancorp Bank Oakdale, Calif. $14 Yes 13.4
Dec. 19 Tidelands BancsharesTidelands Bancshares Bank Mt. Pleasant, S.C. $14 Yes N.A.
Dec. 23 Magna BankMagna Bank Bank Memphis $14 Yes N.A.
Dec. 19 Community Financial Community Financial Bank Staunton, Va. $13 Yes N.A.
Jan. 09 LCNBLCNB Bank Lebanon, Ohio $13 Yes N.A.
Jan. 16 Morrill BancsharesMorrill Bancshares Bank Merriam, Kan. $13 Yes N.A.
Jan. 30 Adbanc Adbanc Bank Ogallala, Neb. $13 Yes N.A.
Jan. 30 Bankers' Bank of the West Bancorp Bankers' Bank of the West Bancorp Bank Denver $13 Yes N.A.
Feb. 20 Security State Bancshares Security State Bancshares Bank Charleston, Mo. $13 Yes N.A.
Dec. 19 OneUnited BankOneUnited Bank Bank Boston $12 Yes N.A.
Dec. 23 Cecil BancorpCecil Bancorp Bank Elkton, Md. $12 Yes N.A.
Dec. 23 1st Constitution Bancorp1st Constitution Bancorp Bank Cranbury, N.J. $12 Yes N.A.
Dec. 23 Pacific Coast Bankers' BancsharesPacific Coast Bankers' Bancshares Bank San Francisco $12 Yes N.A.
Jan. 09 The Queensborough CompanyThe Queensborough Company Bank Louisville, Ga. $12 Yes N.A.
Jan. 16 TCB HoldingTCB Holding Bank The Woodlands, Tex. $12 Yes N.A.
Jan. 16 First Manitowoc BancorpFirst Manitowoc Bancorp Bank Manitowoc, Wis. $12 Yes N.A.
Jan. 30 Plumas Bancorp Plumas Bancorp Bank Quincy, Calif. $12 Yes N.A.
Jan. 30 DNB Financial DNB Financial Bank Downingtown, Pa. $12 Yes N.A.
Jan. 30 Central Virginia Bankshares Central Virginia Bankshares Bank Powhatan, Va. $11 Yes N.A.
Nov. 21 First CommunityFirst Community Bank Lexington, S.C. $11 Yes 6.3
Dec. 23 BCSB BancorpBCSB Bancorp Bank Baltimore $11 Yes 4.2
Dec. 23 First Community Bank Corp. of AmericaFirst Community Bank Corp. of America Bank Pinellas Park $11 Yes N.A.
Dec. 23 Central Jersey BancorpCentral Jersey Bancorp Bank Oakhurst, N.J. $11 Yes N.A.
Jan. 16 Southern BancorpSouthern Bancorp Bank Arkadelphia, Ark. $11 Yes N.A.
Jan. 23 Crosstown HoldingCrosstown Holding Bank Blaine, Minn. $11 Yes N.A.
Jan. 23 Stonebridge FinancialStonebridge Financial Bank West Chester, Pa. $11 Yes N.A.
Jan. 30 First Southern Bancorp First Southern Bancorp Bank Boca Raton, Fla. $11 Yes N.A.
Feb. 13 Northwest Bancorporation Northwest Bancorporation Bank Spokane, Wash. $11 Yes N.A.
Feb. 13 ColoEast Bankshares ColoEast Bankshares Bank Lamar, Colo. $10 Yes N.A.
Nov. 25 Greer BancsharesGreer Bancshares Bank Greer, S.C. $10 Yes N.A.
Dec. 19 Mid Penn BancorpMid Penn Bancorp Bank Millersburg, Pa. $10 Yes 12.2
Dec. 05 Central Bancorp Central Bancorp Bank Somerville, Mass. $10 Yes 33.5
Dec. 05 Coastal BankingCoastal Banking Bank Fernandina Beach, Fla. $10 Yes 29.4
Dec. 05 Southern Missouri BancorpSouthern Missouri Bancorp Bank Poplar Bluff, Mo. $10 Yes 1.6
Dec. 12 First Litchfield FinancialFirst Litchfield Financial Bank Litchfield, Conn. $10 Yes 21.1
Dec. 19 NCAL BancorpNCAL Bancorp Bank Los Angeles $10 Yes 6.3
Dec. 23 United Bancorporation of AlabamaUnited Bancorporation of Alabama Bank Atmore, Ala. $10 Yes N.A.
Dec. 23 Uwharrie Capital Uwharrie Capital Bank Albemarle, N.C. $10 Yes N.A.
Dec. 23 Citizens BancorpCitizens Bancorp Bank Nevada City, Calif. $10 Yes N.A.
Jan. 09 Center BancorpCenter Bancorp Bank Union, N.J. $10 Yes N.A.
Jan. 09 North Central BancsharesNorth Central Bancshares Bank Fort Dodge, Iowa $10 Yes N.A.
Jan. 16 New Hampshire Thrift BancsharesNew Hampshire Thrift Bancshares Bank Newport, N.H. $10 Yes N.A.
Jan. 16 First Bankers TrustsharesFirst Bankers Trustshares Bank Quincy, Ill. $10 Yes N.A.
Jan. 23 Midland States BancorpMidland States Bancorp Bank Effingham, Ill. $10 Yes N.A.
Jan. 30 Stewardship Financial Stewardship Financial Bank Midland Park, N.J. $10 Yes N.A.
Jan. 30 Katahdin Bankshares Katahdin Bankshares Bank Houlton, Me. $10 Yes N.A.
Jan. 30 Northway Financial Northway Financial Bank Berlin, N.H. $10 Yes N.A.
Feb. 20 Mid-Wisconsin Financial Services Mid-Wisconsin Financial Services Bank Medford, Wis. $10 Yes N.A.
Nov. 14 Broadway FinancialBroadway Financial Bank Los Angeles $9 Yes 12.9
Feb. 06 Georgia Commerce Bancshares Georgia Commerce Bancshares Bank Atlanta $9 Yes N.A.
Feb. 13 Carrollton Bancorp Carrollton Bancorp Bank Baltimore $9 Yes N.A.
Feb. 06 First Western Financial First Western Financial Bank Denver $9 Yes N.A.
Dec. 19 The Elmira Savings BankThe Elmira Savings Bank Bank Elmira, N.Y. $9 Yes 7.5
Dec. 19 Citizens FirstCitizens First Bank Bowling Green, Ky. $9 Yes 8.8
Dec. 19 FCB BancorpFCB Bancorp Bank Louisville, Ky. $9 Yes N.A.
Jan. 09 GrandSouth BancorporationGrandSouth Bancorporation Bank Greenville, S.C. $9 Yes N.A.
Jan. 23 Farmers BankFarmers Bank Bank Windsor, Va. $9 Yes N.A.
Jan. 30 Community Partners Bancorp Community Partners Bancorp Bank Middletown, N.J. $9 Yes N.A.
Jan. 30 UBT Bancshares UBT Bancshares Bank Marysville, Kan. $9 Yes N.A.
Jan. 30 Equity Bancshares Equity Bancshares Bank Wichita, Kan. $9 Yes N.A.
Feb. 20 Sonoma Valley Bancorp Sonoma Valley Bancorp Bank Sonoma, Calif. $9 Yes N.A.
Feb. 20 United American Bank United American Bank Bank San Mateo, Calif. $9 Yes N.A.
Feb. 20 Florida Business BancGroup Florida Business BancGroup Bank Tampa, Fla. $9 Yes N.A.
Dec. 19 Summit State BankSummit State Bank Bank Santa Rosa, Calif. $8.5 Yes N.A.
Dec. 23 Emclaire FinancialEmclaire Financial Bank Emlenton, Pa. $8 Yes N.A.
Dec. 23 The Little BankThe Little Bank Bank Kinston, N.C. $8 Yes N.A.
Jan. 16 Syringa BancorpSyringa Bancorp Bank Boise, Idaho $8 Yes N.A.
Feb. 06 Centrix Bank & Trust Centrix Bank & Trust Bank Bedford, N.H. $8 Yes N.A.
Jan. 23 Commonwealth Business BankCommonwealth Business Bank Bank Los Angeles $8 Yes N.A.
Jan. 30 Oak Ridge Financial Services Oak Ridge Financial Services Bank Oak Ridge, N.C. $8 Yes N.A.
Jan. 30 Annapolis Bancorp Annapolis Bancorp Bank Annapolis, Md. $8 Yes N.A.
Jan. 30 Valley Commerce Bancorp Valley Commerce Bancorp Bank Visalia, Calif. $8 Yes N.A.
Jan. 30 Country Bank Shares Country Bank Shares Bank Milford, Neb. $8 Yes N.A.
Jan. 30 Metro City Bank Metro City Bank Bank Doraville, Ga. $8 Yes N.A.
Dec. 05 Central FederalCentral Federal Bank Fairlawn, Ohio $7 Yes 7.1
Dec. 19 FFWFFW Bank Wabash, Ind. $7 Yes 10.6
Jan. 09 Security California BancorpSecurity California Bancorp Bank Riverside, Calif. $7 Yes N.A.
Feb. 06 Monarch Community Bancorp Monarch Community Bancorp Bank Coldwater, Mich. $7 Yes N.A.
Dec. 05 Old Line BancsharesOld Line Bancshares Bank Bowie, Md. $7 Yes 2.6
Dec. 12 Pacific International BancorpPacific International Bancorp Bank Seattle $7 Yes N.A.
Dec. 12 Fidelity BancorpFidelity Bancorp Bank Pittsburgh $7 Yes 27.8
Dec. 23 First Sound BankFirst Sound Bank Bank Seattle $7 Yes N.A.
Dec. 23 Western Illinois BancsharesWestern Illinois Bancshares Bank Monmouth, Ill. $7 Yes N.A.
Dec. 23 Western Community BancsharesWestern Community Bancshares Bank Palm Desert, Calif. $7 Yes N.A.
Jan. 16 Somerset Hills BancorpSomerset Hills Bancorp Bank Bernardsville, N.J. $7 Yes N.A.
Jan. 16 Idaho BancorpIdaho Bancorp Bank Boise, Idaho $7 Yes N.A.
Jan. 23 Alarion Financial ServicesAlarion Financial Services Bank Ocala, Fla. $7 Yes N.A.
Jan. 23 Pierce County BancorpPierce County Bancorp Bank Tacoma, Wash. $7 Yes N.A.
Jan. 30 Central Valley Community Bancorp Central Valley Community Bancorp Bank Fresno, Calif. $7 Yes N.A.
Jan. 30 WashingtonFirst Bank WashingtonFirst Bank Bank Reston, Va. $7 Yes N.A.
Feb. 20 Guaranty Bancorp Guaranty Bancorp Bank Woodsville, N.H. $7 Yes N.A.
Feb. 20 First BancTrust First BancTrust Bank Paris, Ill. $7 Yes N.A.
Feb. 20 Hamilton State Bancshares Hamilton State Bancshares Bank Hoschton, Ga. $7 Yes N.A.
Dec. 05 FPB BancorpFPB Bancorp Bank Port St. Lucie, Fla. $6 Yes 45.4
Feb. 06 Citizens Commerce Bancshares Citizens Commerce Bancshares Bank Versailles, Ky. $6 Yes N.A.
Feb. 06 Liberty Financial Services Liberty Financial Services Bank New Orleans $6 Yes N.A.
Dec. 19 Patapsco BancorpPatapsco Bancorp Bank Dundalk, Md. $6 Yes 23.6
Dec. 23 Mission Valley BancorpMission Valley Bancorp Bank Sun Valley, Calif. $6 Yes N.A.
Dec. 23 Leader BancorpLeader Bancorp Bank Arlington, Mass. $6 Yes N.A.
Jan. 09 American State BancsharesAmerican State Bancshares Bank Great Bend, Kan. $6 Yes N.A.
Jan. 09 Security Business BancorpSecurity Business Bancorp Bank San Diego $6 Yes N.A.
Jan. 09 Valley Community BankValley Community Bank Bank Pleasanton, Calif. $6 Yes N.A.
Jan. 09 Rising Sun BancorpRising Sun Bancorp Bank Rising Sun, Md. $6 Yes N.A.
Jan. 16 United Financial BankingUnited Financial Banking Bank Vienna, Va. $6 Yes N.A.
Jan. 23 Moscow BancsharesMoscow Bancshares Bank Moscow, Tenn. $6 Yes N.A.
Jan. 23 Seaside National Bank & TrustSeaside National Bank & Trust Bank Orlando, Fla. $6 Yes N.A.
Jan. 30 Peninsula Bank Holding Peninsula Bank Holding Bank Palo Alto, Calif. $6 Yes N.A.
Jan. 30 Beach Business Bank Beach Business Bank Bank Manhattan Beach, Calif. $6 Yes N.A.
Jan. 30 Central Bancshares Central Bancshares Bank Houston $6 Yes N.A.
Feb. 13 Meridian Bank Meridian Bank Bank Devon, Pa. $6 Yes N.A.
Feb. 13 First Menasha Bancshares First Menasha Bancshares Bank Neenah, Wis. $5 Yes N.A.
Feb. 13 Financial Security Financial Security Bank Basin, Wyo. $5 Yes N.A.
Feb. 06 The First Bancshares The First Bancshares Bank Hattiesburg, Miss. $5 Yes N.A.
Feb. 06 Alaska Pacific Bancshares Alaska Pacific Bancshares Bank Juneau, Alaska $5 Yes N.A.
Dec. 19 The Connecticut Bank and TrustThe Connecticut Bank and Trust Bank Hartford, Conn. $5 Yes 9.9
Jan. 09 Commerce National BankCommerce National Bank Bank Newport Beach, Calif. $5 Yes 0.9
Dec. 23 Capital BancorpCapital Bancorp Bank Rockville, Md. $5 Yes N.A.
Dec. 23 Cache Valley Banking Cache Valley Banking Bank Logan, Utah $5 Yes N.A.
Jan. 09 Mission Community BancorpMission Community Bancorp Bank San Luis Obispo, Calif. $5 Yes N.A.
Jan. 16 Puget Sound BankPuget Sound Bank Bank Bellevue, Wash. $5 Yes N.A.
Feb. 06 First Express of Nebraska First Express of Nebraska Bank Gering, Neb. $5 Yes N.A.
Jan. 23 CalWest BancorpCalWest Bancorp Bank Rancho Santa Margarita, Calif. $5 Yes N.A.
Jan. 23 First ULBFirst ULB Bank Oakland, Calif. $5 Yes N.A.
Jan. 23 Southern Illinois BancorpSouthern Illinois Bancorp Bank Carmi, Ill. $5 Yes N.A.
Jan. 30 Legacy Bancorp Legacy Bancorp Bank Milwaukee, Wisc. $5 Yes N.A.
Jan. 30 Monument Bank Monument Bank Bank Bethesda, Md. $5 Yes N.A.
Jan. 30 F & M Bancshares F & M Bancshares Bank Trezevant, Tenn. $5 Yes N.A.
Feb. 20 The Private Bank of California The Private Bank of California Bank Los Angeles $5 Yes N.A.
Feb. 20 First Priority Financial First Priority Financial Bank Malvern, Pa. $5 Yes N.A.
Dec. 23 Capital Pacific BancorpCapital Pacific Bancorp Bank Portland, Ore. $4 Yes 15.0
Feb. 06 The Bank of Currituck The Bank of Currituck Bank Moyock, N.C. $4 Yes N.A.
Feb. 06 Pascack Community Bank Pascack Community Bank Bank Westwood, N.J. $4 Yes N.A.
Feb. 06 Carolina Trust Bank Carolina Trust Bank Bank Lincolnton, N.C. $4 Yes N.A.
Feb. 06 Todd Bancshares Todd Bancshares Bank Hopkinsville, Ky. $4 Yes N.A.
Feb. 06 Mercantile Capital Mercantile Capital Bank Boston $4 Yes N.A.
Feb. 13 1st Enterprise Bank 1st Enterprise Bank Bank Los Angeles $4 Yes N.A.
Dec. 19 Santa Lucia BancorpSanta Lucia Bancorp Bank Atascadero, Calif. $4 Yes N.A.
Dec. 12 Northeast BancorpNortheast Bancorp Bank Lewiston, Me. $4 Yes 20.5
Dec. 23 Pacific Commerce BankPacific Commerce Bank Bank Los Angeles $4 Yes 0.1
Feb. 06 CedarStone Bank CedarStone Bank Bank Lebanon, Tenn. $4 Yes N.A.
Jan. 09 Texas National BancorporationTexas National Bancorporation Bank Jacksonville, Tex. $4 Yes N.A.
Jan. 16 Pacific Coast National BancorpPacific Coast National Bancorp Bank San Clemente, Calif. $4 Yes N.A.
Jan. 16 Redwood Capital BancorpRedwood Capital Bancorp Bank Eureka, Calif. $4 Yes N.A.
Jan. 23 AB&T FinancialAB&T Financial Bank Gastonia, N.C. $4 Yes N.A.
Jan. 30 AMB Financial AMB Financial Bank Munster, Ind. $4 Yes N.A.
Jan. 30 Hilltop Community Bancorp Hilltop Community Bancorp Bank Summit, N.J. $4 Yes N.A.
Feb. 20 Premier Service Bank Premier Service Bank Bank Riverside, Calif. $4 Yes N.A.
Feb. 06 Lone Star Bank Lone Star Bank Bank Houston $3 Yes N.A.
Feb. 06 PGB Holdings PGB Holdings Bank Chicago $3 Yes N.A.
Feb. 06 US Metro Bank US Metro Bank Bank Garden Grove, Calif. $3 Yes N.A.
Feb. 13 Santa Clara Valley Bank Santa Clara Valley Bank Bank Santa Paula, Calif. $3 Yes N.A.
Feb. 06 First Bank of Charleston First Bank of Charleston Bank Charleston, W.Va. $3 Yes N.A.
Dec. 23 Citizens Community BankCitizens Community Bank Bank South Hill, Va. $3 Yes N.A.
Dec. 23 Community Investors BancorpCommunity Investors Bancorp Bank Bucyrus, Ohio $3 Yes N.A.
Dec. 23 Tennessee Valley Financial HoldingsTennessee Valley Financial Holdings Bank Oak Ridge, Tenn. $3 Yes N.A.
Jan. 09 Sound BankingSound Banking Bank Morehead City, N.C. $3 Yes N.A.
Jan. 09 Redwood FinancialRedwood Financial Specialty lender Redwood Falls, Minn. $3 Yes N.A.
Jan. 09 Congaree BancsharesCongaree Bancshares Bank Cayce, S.C. $3 Yes N.A.
Jan. 16 Community 1st BankCommunity 1st Bank Bank Roseville, Calif. $3 Yes N.A.
Jan. 16 Bank of CommerceBank of Commerce Bank Charlotte, N.C. $3 Yes N.A.
Jan. 16 Treaty Oak BancorpTreaty Oak Bancorp Bank Austin, Tex. $3 Yes N.A.
Jan. 23 California Oaks State BankCalifornia Oaks State Bank Bank Thousand Oaks, Calif. $3 Yes N.A.
Jan. 23 FPB FinancialFPB Financial Bank Hammond, La. $3 Yes N.A.
Jan. 30 Goldwater Bank Goldwater Bank Bank Scottsdale, Ariz. $3 Yes N.A.
Jan. 30 First Resource Bank First Resource Bank Bank Exton, Pa. $3 Yes N.A.
Feb. 20 Crazy Woman Creek Bancorp Crazy Woman Creek Bancorp Bank Buffalo, Wyo. $3 Yes N.A.
Feb. 20 Hometown Bancorp of Alabama Hometown Bancorp of Alabama Bank Oneonta, Ala. $3 Yes N.A.
Feb. 20 CBB Bancorp CBB Bancorp Bank Cartersville, Ga. $3 Yes N.A.
Feb. 13 Regional Bankshares Regional Bankshares Bank Hartsville, S.C. $2 Yes N.A.
Dec. 23 Saigon National BankSaigon National Bank Bank Westminster, Calif. $2 Yes 5.8
Feb. 13 Security Bancshares of Pulaski County Security Bancshares of Pulaski County Bank Waynesville, Mo. $2 Yes N.A.
Feb. 06 Hyperion Bank Hyperion Bank Bank Philadelphia $2 Yes N.A.
Dec. 23 Seacoast Commerce BankSeacoast Commerce Bank Bank Chula Vista, Calif. $2 Yes N.A.
Dec. 05 Manhattan Bancorp Manhattan Bancorp Bank El Segundo, Calif. $2 Yes N.A.
Dec. 19 Monadnock BancorpMonadnock Bancorp Bank Peterborough, N.H. $2 Yes N.A.
Dec. 23 TCNB FinancialTCNB Financial Bank Dayton, Ohio $2 Yes N.A.
Jan. 09 Surrey BancorpSurrey Bancorp Bank Mount Airy, N.C. $2 Yes N.A.
Jan. 16 Community Bank of the BayCommunity Bank of the Bay Bank Oakland, Calif. $2 Yes N.A.
Jan. 23 Fresno First BankFresno First Bank Bank Fresno, Calif. $2 Yes N.A.
Jan. 30 Ojai Community Bank Ojai Community Bank Bank Ojai, Calif. $2 Yes N.A.
Feb. 13 First Choice Bank First Choice Bank Bank Cerritos, Calif. $2 Yes N.A.
Feb. 13 Hometown Bancshares Hometown Bancshares Bank Corbin, Ky. $2 Yes N.A.
Feb. 13 Northwest Commercial Bank Northwest Commercial Bank Bank Lakewood, Wash. $2 Yes N.A.
Feb. 20 Lafayette BancorpLafayette Bancorp Bank Lafayette Bancorp $2 Yes N.A.
Feb. 20 Lafayette BancorpLafayette Bancorp Bank Oxford, Miss. $2 Yes N.A.
Feb. 20 Market Bancorporation Market Bancorporation Bank New Market, Minn. $2 Yes N.A.
Feb. 06 Community Holding Company of Florida Community Holding Company of Florida Bank Miramar Beach, Fla. $1 Yes N.A.
Feb. 13 BankGreenville BankGreenville Bank Greenville, S.C. $1 Yes N.A.
Feb. 13 DeSoto County Bank DeSoto County Bank Bank Horn Lake, Miss. $1 Yes N.A.
Jan. 09 Independence BankIndependence Bank Bank East Greenwich, R.I. $1 Yes N.A.
Jan. 23 Calvert FinancialCalvert Financial Bank Ashland, Mo. $1 Yes N.A.
Feb. 13 Bern Bancshares Bern Bancshares Bank Bern, Kan. $1 Yes N.A.
Feb. 06 Banner County Bank Banner County Bank Bank Harrisburg, Neb. $0.8 Yes N.A.
Feb. 13 Gregg Bancshares Gregg Bancshares Bank Ozark, Mo. $0.8 Yes N.A.
Feb. 13 Midwest Regional Bancorp Midwest Regional Bancorp Bank Festus, Mo. $0.7 Yes N.A.
Feb. 13 Corning Savings and Loan Association Corning Savings and Loan Association Bank Corning, Ariz. $0.6 Yes N.A.
Feb. 06 The Freeport State Bank The Freeport State Bank Bank Harper, Kan. $0.3 Yes N.A.

Federal Home Loan Bank securities - The Treasury and the Federal Reserve have begun buying debt and mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. Committed: $600 billion, Spent: $259 billion.

Money market funds - The Treasury originally guaranteed these accounts up to $50 billion, but the program has been extended by the Federal Reserve, which has, in a few cases, had to step in and buy some illiquid assets of some funds to help them meet their obligations. Committed: $600 billion, Spent: $13 billion.

A.I.G. - The Federal Reserve has provided seed money to create investment vehicles to buy, hold and possibly dispose of bad securities held or insured by A.I.G. Committed: $53 billion, Spent: $43 billion.

Bear Stearns - The Federal Reserve bought distressed assets from Bear Stearns to facilitate its sale to JPMorgan Chase. Committed: $29 billion, Spent: $29 billion.

Reserve U.S. Government Fund - Despite the name, this was a private fund, not part of the government. It was the first big money market fund to experience liquidity problems, and the Treasury eventually bought some high-quality assets to help the fund unwind.


The Government as Lender: Committed $2.4 trillion, Spent: $690 billion.

A significant expansion of the government's traditional overnight lending to banks, including extending terms to as many as 90 days and allowing borrowing by other financial institutions.

Term Asset-Backed Securities Loan Facility (TALF) - This program, which is not yet operational, will provide loans and accept securities backed by consumer and small-business loans as collateral. Committed: $1.0 trillion, Spent: $0 billion.

Term auction facility - The Federal Reserve is making these low-interest loans of either 28 or 84 days to financial institutions, allowing them to pledge a variety of collateral, including asset-backed securities. Committed: $900 billion, Spent: $448 billion.

Other loans - These loans from the Federal Reserve's discount window used to be confined to commercial banks and were only overnight. Now, terms have been extended, in some cases up to 90 days, and investment banks have access to them. The total amount on loan has significantly expanded. Committed: at least $236 billion, Spent: $90 billion

Debt swaps (Term Securities Lending Facility) - The Federal Reserve is lending liquid United States Treasuries for 28 days in exchange for less liquid agency debt, debt backed by mortgage-backed securities and investment-grade corporate debt. Committed: $200 billion, Spent: $115 billion.

A.I.G. - A line of credit offered by the Federal Reserve that the insurance company has partly tapped. Committed: $60 billion, Spent: $37 billion

Bank debt (Temporary Liquidity Guarantee Program) - The Federal Deposit Insurance Corporation has begun insuring senior subordinated debt issued by banks and poorly performing assets owned by banks, Fannie Mae and Freddie Mac. The program is now slated to run through June 2009. Committed: $700 billion, Spent: $261 billion.

Non-interest-bearing deposit accounts (Temporary Liquidity Guarantee Program) - The F.D.I.C. is insuring these accounts, which are mainly used by businesses to run day-to-day operations. Committed: $500 billion, Spent: $0 billion.

Citigroup - The government is backing the bulk of $306 billion in loans and securities. This amount does not include direct investment through the TARP program. Committed: $249 billion, Spent: $0 billion.

Fannie Mae/Freddie Mac - The companies were put into conservatorship and the Treasury pledged up to $200 billion to cover their losses. Freddie Mac has now received a $14 billion infusion. Committed: $400 billion, Spent: $14 billion.

Bank of America - The government is backing loans and securities worth $98 billion. This amount does not include direct investment through the TARP program. Committed: $98 billion, Spent: $0 billion.

Morgan Stanley - The Treasury guaranteed a capital infusion by a Japanese bank. Committed: $9 billion, Spent: $0 billion.


The Government as Insurer: Committed: $2.0 trillion, Spent: $275 billion.

Includes insuring debt issued by financial institutions and guaranteeing poorly performing assets owned by banks and Fannie Mae and Freddie Mac.

Bank debt (Temporary Liquidity Guarantee Program) - The Federal Deposit Insurance Corporation has begun insuring senior subordinated debt issued by banks and poorly performing assets owned by banks, Fannie Mae and Freddie Mac. The program is now slated to run through June 2009. Committed: $700 billion, Spent: $261 billion.

Non-interest-bearing deposit accounts (Temporary Liquidity Guarantee Program) - The F.D.I.C. is insuring these accounts, which are mainly used by businesses to run day-to-day operations. Committed: $500 billion, Spent: $0 billion.

Citigroup - The government is backing the bulk of $306 billion in loans and securities. This amount does not include direct investment through the TARP program. Committed: $249 billion, Spent: $0 billion.

Fannie Mae/Freddie Mac - The companies were put into conservatorship and the Treasury pledged up to $200 billion to cover their losses. Freddie Mac has now received a $14 billion infusion. Committed: $400 billion, Spent: $14 billion.

Bank of America - The government is backing loans and securities worth $98 billion. This amount does not include direct investment through the TARP program. Committed: $98 billion, Spent: $0 billion.

Morgan Stanley - The Treasury guaranteed a capital infusion by a Japanese bank. Committed: $9 billion, Spent: $0 billion.



Sharper Downturn Clouds Obama Spending Plans, Peter S. Goodman, February 27, 2009.

The economy is spiraling down at an accelerating pace, threatening to undermine the Obama administration’s spending plans, which anticipate vigorous rates of growth in years to come.

A sense of disconnect between the projections by the White House and the grim realities of everyday American life was enhanced on Friday, as the Commerce Department gave a harsher assessment for the last three months of 2008. In place of an initial estimate that the economy contracted at an annualized rate of 3.8 percent — already abysmal — the government said that the pace of decline was actually 6.2 percent, making it the worst quarter since 1982.

The fortunes of the American economy have grown so alarming and the pace of the decline so swift that economists are now straining to describe where events are headed, dusting off a word that has not been invoked since the 1940s: depression.

Economists are not making comparisons with the Great Depression of the 1930s, when the unemployment rate reached 25 percent. Current conditions are not even as poor as during the twin recessions of the 1980s, when unemployment exceeded 10 percent, though many experts assert this downturn is on track to be significantly worse.

Rather, economists are using the word depression — a subjective term with no academic definition — to describe a condition of broad and extreme economic distress that remains stubbornly in place for much longer than a typical downturn.

This is more than a matter of semantics. As the government determines its spending plans, readying another infusion of cash for troubled banks while contemplating an additional bailout for the auto industry, the magnitude of those needs will hinge on the extent of the damage.

Mark Zandi, chief economist of Moody’s Economy.com, now places the odds of “a mild depression” at 25 percent, up from 15 percent three months ago. In that view, the unemployment rate would reach 10.5 percent by the end of 2011 — up from 7.6 percent at the end of January — average home prices would fall 20 percent on top of the 27 percent they have plunged already, and losses in the financial system would more than triple, to $3.7 trillion.

Allen Sinai, chief global economist at the research firm Decision Economics, sees a 20 percent chance of “a depressionlike possibility,” up from 15 percent a week ago.

“In the housing market, the financial system and the stock market, we’re already there,” Mr. Sinai said. “It is a depression.”

Yet, in drawing up the budget, the White House assumed the economy would expand by a robust 3.2 percent in 2010, with growth accelerating to 4 percent over the next three years.

“It’s a hope, a wing and a prayer,” Mr. Sinai said. “It’s a return to a sanguine view of the economy that is simply not justified.”

If, as is widely anticipated, the economy grows more slowly than the White House assumes, revenue will be lower, forcing the government to cut spending, raise taxes or run larger deficits.

Economists also criticized as unrealistically hopeful the assumptions by the Federal Reserve as it began so-called stress tests to gauge the health of the nation’s largest banks. In testimony, Ben S. Bernanke, the Fed chairman, said that the nation’s unemployment rate would most likely reach 8.8 percent next year.

“That forecast just doesn’t seem realistic,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington, “and I don’t think it helps the Fed’s credibility to make these sorts of forecasts right now.”

As federal regulators estimate potential losses at banks, the harshest assumptions they are testing entails the unemployment rate topping out at 10.3 percent — the highest level since 1983, but hardly the worst case.

By Mr. Baker’s reckoning, the unemployment rate may exceed 12 percent — the highest level since tracking began in 1948.

“We continue to see across-the-board numbers coming in worse than we expected,” Mr. Baker said.

By Mr. Zandi’s estimation, in the most likely case, the unemployment rate will reach 9.3 percent next year. The distress in the financial system, the job market and real estate have become inextricably intertwined.

As troubled banks remain hesitant to lend, even healthy companies are laying off workers. As more Americans lose jobs, they are cutting spending, depriving businesses of revenue, and falling behind on house, car and credit card payments, multiplying losses in the financial system. As more homes land in foreclosure and would-be buyers fail to secure mortgages, housing prices fall further, adding to the losses of the banks — a downward spiral.

Many economists expect that the labor data to be released next Friday will show that as many as 700,000 jobs disappeared in February, lifting the unemployment rate near 8 percent and pushing total job losses to more than four million since the recession began in December 2007.

Given the brutal forces at play, some experts question the administration’s decision to publicize the bank stress tests, as opposed to conducting them quietly.

“It invited the interpretation that this was the beginning of triage for the banks, that we were going to start lining them up and shooting them,” said Alan S. Blinder, a former vice chairman of the Federal Reserve and a professor at Princeton. “There are some things in the bank supervisor role that you just keep secret.”

Others argue that the tests could sow needed assurance. “The stress test could create transparency,” said Alan D. Levenson, chief economist at T. Rowe Price in Baltimore.

As the gruesome data accumulates, this much is already clear: Transparency is not for the squeamish.

Mr. Levenson noted that the weakening economy was destroying demand for goods and services even faster than the $787 billion stimulus program could replace it.



Elie Wiesel Levels Scorn at Madoff, Stephanie Strom, February 26, 2009.

What does Elie Wiesel, the Nobel Peace Prize laureate and Holocaust survivor who has dedicated his life to fighting hatred and intolerance, think about Bernard L. Madoff?

“ ‘Psychopath’ — it’s too nice a word for him,” Mr. Wiesel said in his first public comments on Mr. Madoff and the Ponzi scheme he is accused of perpetrating on thousands of individuals and charities, including the Elie Wiesel Foundation for Humanity.

“ ‘Sociopath,’ ‘psychopath,’ it means there is a sickness, a pathology. This man knew what he was doing. I would simply call him thief, scoundrel, criminal.”

Mr. Wiesel’s charity lost $15.2 million, and he and his wife, Marion, lost their life savings. “This was a personal tragedy where we discovered all of a sudden what we had done in 40 years — my books, my lectures, everything — was gone,” said Mr. Wiesel, who shared his story as part of a panel discussion on the Madoff scandal on Thursday.

He said he began investing with Mr. Madoff at the suggestion of an old friend whom he declined to name, “just a wealthy man, not in the financial business.” Mr. Wiesel said, “He too lost $50 million.”

The Wiesels met Mr. Madoff on only two occasions, he said, adding that during one encounter Mr. Madoff had tried to persuade Mr. Wiesel to abandon his post at Boston University, where he teaches the humanities, philosophy and religion, for a chair at Queens College, alma mater of Mr. Madoff’s wife, Ruth.

“We must have spoken about ethics,” Mr. Wiesel said. “Some learn, and some don’t.”

After seeing how consistently Mr. Madoff generated handsome returns buying fairly plain-vanilla securities — “He bought 100 shares of Coca-Cola and sold 500 shares of Pfizer,” Mr. Wiesel said, describing his understanding of the Madoff strategy — the Wiesels decided to invest their charity’s assets with him as well.

“We checked the people who have business with him, and they were among the best minds on Wall Street, the geniuses of finance,” Mr. Wiesel said. “I am not a genius of finance. I teach philosophy and literature — and so it happened.”

Mr. Wiesel spoke on a panel at the “21” Club moderated by Joanne Lipman, the editor in chief of Portfolio, the Condé Nast magazine devoted to business and finance.

Another panelist, James Chanos, who specializes in short-selling, or betting that certain stock prices will fall, said Mr. Madoff’s investors bore some responsibility for not heeding the warning signs.

“Every checklist of responsible behavior on behalf of fiduciaries broke down here: ‘we’re not going to tell you what we’re in,’ ‘you can’t see where we’re investing,’ the statements weren’t clear, the strip-mall accounting firm,” Mr. Chanos said.

Harvey L. Pitt, former chairman of the Securities and Exchange Commission, said that Madoff investors were not the only ones hoodwinked in the last several years, that investors in Wall Street firms also tolerated less-than-ideal transparency. “I really do believe that there was criminality at a lot of these firms,” Mr. Pitt said, citing the different valuations that financial institutions placed on the same financial instruments.

“It’s not per se fraudulent to have different values for different purposes, but someone has to look at that and figure out what was going on,” he said. “These kinds of things reflect more than happenstance or carelessness; they reflect criminality.”

Mr. Wiesel said, however, that spotting problems was not easy. “Remember, there was a myth he created around him, that everything was so special, so unique that it had to be secret,” he said, adding that his charity’s accountants had not identified potential concerns about Mr. Madoff.

He said he was amazed at the outpouring of support for his charity in the wake of the scandal. “Unsolicited, hundreds of people, literally, hundreds of people we have never known sent us money through the Internet, $5, $18, $100, one even $1,000,” he said.

The Elie Wiesel Foundation will hold a benefit concert on May 26 to raise more money, and Mr. Wiesel has a book, “A Mad Desire to Dance,” coming out soon.

Asked what punishment he would like to see for Mr. Madoff, Mr. Wiesel said: “I would like him to be in a solitary cell with only a screen, and on that screen for at least five years of his life, every day and every night, there should be pictures of his victims, one after the other after the other, all the time a voice saying, ‘Look what you have done to this old lady, look what you have done to that child, look what you have done,’ nothing else.”



Divas of doom find their fame in peddling the direst of fortunes to pessimistic masses, Ian Brown, February 27, 2009.

Bleak is chic as demand grows for dark oracles of blood-filled streets and 'zombie banks'.

The financial headlines can make your eyeballs bleed. William Burroughs, the great Beat writer, could have fashioned one of his cut-up poems out of a single day's fare:

Markets tumble as bank fears linger
Will invoking the Great Depression bring it on?
Manulife needs to confront its reality
There will be blood ...

The boom in doom reached a new peak Tuesday. That was the day Harvard financial historian Niall Ferguson declared, in this newspaper, that the global recession is about to produce blood in the streets, "civil wars" and toppled governments. By Friday it was the No. 1 all-time best-read story on globeandmail.com, and a global Internet tizzy as well.

Bad, bad news has been avalanching ever since. Nouriel Roubini, New York University's famous Dr. Doom, is predicting the collapse of Eastern Europe. "The financial system is actually imploding right now," the professor implacably informed his TV audience this week.

Meanwhile, Standard and Poor's has downgraded Ukraine's foreign currency rating to CCC-minus — that's seven levels below investment grade, ladies and gentlemen, the equivalent of your dope-smoking teenage son getting a mark of 13 in physics. The prospect of a default has European bankers sprinting for the Valium.

In Toronto, Paul Volcker, a former chairman of the U.S. Federal Reserve Bank, has admitted he has no idea how to fix the mess.

In New York, Nobel-Prize-winning economist Paul Krugman is calling for the nationalization of banks. In England, storekeepers are posting a sign in their windows; Keep Calm and Carry On, it reads, a slogan revived from the Blitz. The new bad news is so bad, even Bernie Madoff has been knocked out of the spotlight. By now he barely qualifies as a shoplifter.

This is the way we live these days, hiding under the blankets. But as frightening as the future looks, we seem to enjoy being told how much it's going to hurt. Dire news makes us feel like grown-ups, serious once more. We might consider seeing a collective psychiatrist. At the very least, we should take a close look at what we're afraid of.

Niall Ferguson wields the whip of shame the way we like it. "Niall is a self-publicist and a controversialist," one of his fellow Cassandras on the global lecture circuit says. "That's his stock in trade."

The Scottish-born, Oxford-trained, Harvard-seated professor's fourth book, The Ascent of Money, is currently No. 4 on the New York Times's business bestseller list. His website is stacked with his latest pronouncements. They range from a discussion of pre-First World War central bank incompetence, which led to the rise of fascism and Hitler (his ever-ready theme), to an imaginary economic retrospective of 2009 (predictions include an assassination attempt on Barack Obama by al-Qaeda next Thanksgiving).

He works the rhetoric of doom like a master. Is violence inevitable because of this crisis? "There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]"— but we already knew that, where's the evidence? "It will cause civil wars to break out that were dormant" — again, where, and were they about to break out anyway?

Prof. Ferguson's best stroke is to nuzzle up to the Direst Prediction of All, without touching it. "I don't see it producing anything comparable with 1914 or 1939." By then, of course, the war horse is out of the barn.

Most of all, he's a good storyteller. His prose style is as brisk as his speeches are lucrative, at $50,000 per. Don't complain: You deserve it.

Nouriel Roubini, the other dark oracle of the Collapse of '08, is known to fans as "The Professor," which is what he is at the aptly named Stern School of Business at New York University. He's also the chairman of RGE Monitor, which provides a relentless barrage of online bleakness about the global economy, assembled by teams of economists and analysts. The reports sell "to an average retired person," the RGE receptionist explained recently, "for about $5,000."

The professor in New York isn't as flashy as the historian in Boston, but he is easily as respected. It was Prof. Roubini who first predicted, back in the day (2006) that the housing collapse would produce the credit squeeze. (He underestimated the losses, though, at $1-trillion, versus a reality of as much as four times that number.) "People called us lunatics," Christian Menegatti, the managing editor and chief economist of RGE Monitor, recalls.

Lately, Prof. Roubini has been ratcheting up the fear factor with talk of "zombie banks" — liabilities greater than assets, hence worth "less than zero." His expressionless delivery —the man rarely blinks — has the same staggering effect that kryptonite had on Superman. His mantra is "the worst is yet to come." When the recovery does arrive — growth of 1 per cent or less, at the very end of 2010 — it will be so feeble "that it will feel terrible even if the recession is technically over."

Excuse me while I lie down in front of that truck.

Compared with Profs. Ferguson and Roubini, other economic alarmists are practically upbeat. At 86, Paul Volcker is the Eeyore of the woe-wringers: He doesn't threaten dire decline so much as he renders you catatonic with the incessant unfathomability of it all.

"I have never, in my lifetime, seen a financial problem of this sort," he recently told an audience in Toronto. "I'm not saying it's going to get anywhere as serious as the Great Depression, but that was not an ordinary business cycle either." Aiiiieeeeee!

Why do we hunger for their dark predictions? It's an interesting question. Maybe Tolstoy was right: Unhappiness tells us more about ourselves than optimism. Maybe the prospect of a sharp cleansing purge makes us feel better about our languid lust for pleasure: ow trumps oooh. Maybe, as Martin Wolf, the renowned chief economic pundit for the Financial Times (and no stranger to the international doom circuit) says, "This is a shock. And in periods of shock, people get real. They ask big questions about their lives."

"There is a peculiar human need to contemplate disaster," Vivian Rakoff, professor emeritus in the department of psychiatry at the University of Toronto, says. "Because there is the sense that if it gets bad enough, we can start over again."

Things are different here in Canada. When I telephoned Wendy Dobson, a former director of the C. D. Howe Institute who now teaches at the University of Toronto, she said "Calm down!" before I even said hello. Dr. Dobson takes Niall Ferguson's alarms with a grain of the old salt: "Predictions of civil war and depression?" she says. "He's right — in some small, badly governed country." And while she admires Prof. Roubini's foresight, she claims he occupies "the bleeding edge of prognostication," so far out in the future that's it's hard to be anything but cautious and non-committal about his views.

Optimism isn't common here, but it isn't unheard of. "We continue to maintain the view that a recovery will take hold by the end of the year," Douglas Porter, the chief economist at the Bank of Montreal, said yesterday, "despite the recent wave of downbeat economic releases."

Mr. Porter and Dr. Dobson are rarities: Most economists have an ingrained terror of being caught out as the Dolt of the Century — like, say, James Glassman, who published the ultimate text of optimism, Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market, in 1999, when the Dow Jones industrial average was exuberantly cresting 11,700. Today, the Dow sucks air just over 7,000.

Even worse to be Irving Fisher, the eminent Yale economist who promised Americans the stock market had reached a "permanently high plateau" in 1929, a week before its pants fell off, and 24 years before it pulled them back up to where they'd been. Promise up or down, but down is safer. "What doesn't sell," Mr. Wolf says, "is being in the reasonable middle. If you're going to hear a speaker, you either want a new point of view or a list of calamities."

Today's extreme pessimism is a lesson even the doomsayers learned the hard way. Mr. Wolf has taken of late to talking to his wife about his past economic predictions. "I find all the embarrassment today, looking back three or four years ago, is that I was clearly too optimistic." He wasn't alone. "Nobody came close to being pessimistic enough. That is the most significant feature in the past 12 months. Essentially, what has happened is way more pessimistic than anyone predicted."

Which, oddly enough, is predictable. Even Niall Ferguson and Nouriel Roubini, the most daring doom divas, hesitate to raise the spectre of the Great Depression. "I'm not making the comparison to this crisis," Mr. Wolf says. "I'm not. But without the Great Depression, Hitler would never have come to power." Europeans are especially sensitive to the destabilizing power of severe recessions, to the fact that the Depression in the United States led to fascism in Europe. Drs. Ferguson, Roubini and Wolf all are Europeans.

"The countries with pretty strong democracies withstood it," Mr. Wolf says. "Those without did not. I don't find that so implausible. Really frightened people do really frightening things."

The trick, then, is not to be frightened — to resist not just the urge to panic, but also "the puritanical dislike of the world human beings have made," as Dr. Rakoff puts it, that makes us welcome doom and bust. "This crisis does seem more serious, and I don't want to be an idiot. But I do think that for one of the first times in history, everybody is in it. No one is chortling. It's a single raft of the economy, afloat in the stormy sea."



Emissions galore: He likes us, he really likes us, February 21, 2009 By Ian Brown, (URL no longer available).

Ian Brown on going gaga for Barack Obama.

Mr. Harper said they talked about all kinds of stuff: not just major issues like the automobile industry and the recession and energy ... but also about their personal lives and their families and their 'hopes and aspirations' for both their countries. They must have been taking pretty fast.

Like, sweet, the totally weird thing is, the excitement of Barack Obama's visit to Ottawa was so thrilling. I started to feel like a 15-year-old girl! Like, omigod, we're a nation of Sally Fields: He really likes us! It just made me want to say, thank you so much.

That was how I felt. Like I was a character (the Canadian citizen) in a play (moment-to-moment coverage of the presidential visit!) within another play (an entirely ceremonial presidential visit). It was a weird sensation. It kept reminding me of that place, Plato's Cave? Where everybody's watching shadows on the wall and thinks they're real?

I watched the you-cannot-afford-to-miss-a-second coverage on Newsworld, but also on the websites of the newspapers, in the form of "moment-by-moment analysis." I would have thought "moment-by-moment analysis" was an oxymoron, but what do I know?

Someone was saying, "He looks so comfortable!" about Barack Obama as he strolled across the tarmac with Governor-General Michaëlle Jean. The Governor-General, meanwhile, looked like she wanted to make out with the new U.S. President. It's a good thing all those chaperones were around. The commentators said it was all very significant. About what I'm not sure, but I mean, it has to be, right? He loves Canada. He said so. He really likes us.

The only thing I couldn't figure out was why, if this was such a big deal, Stephen Harper and Barack Obama were meeting for only 30 minutes.

How much can you say in 30 minutes? Especially when the problems they're talking about are so huge? More troops in Afghanistan. Protectionism in an increasingly unemployed U.S., where the economy is imploding faster than a rotten tomato. The fate of tar-sands oil and Canada's lagging carbon-output standards when Mr. Obama is committed to a cleaner environment and tougher emission standards.

I mean, I imagine any one of those problems would require the entire 30 minutes to solve.

But then any doubts I had were allayed by the pictures of how much Canadians love Mr. Obama. There was even a caption on the screen: "Ottawa abuzz as U.S. President motorcade passes through the city." Abuzz? The whole city? For a motorcade? LOL. How boring is Ottawa, anyway?

And the non-stop commentary! Omigod, omigod! It was so exciting, because it was All Happening Now. The commentators were asking questions in the conditional squared tense. Example: "What would you expect would be happening right now?" They should assign that sentence to high-school students to parse in English class: It would keep them busy for the whole semester. The conditional future conditional present gerundive present!

At one point, the presidential motorcade passed Rosemary Barton, a CBC reporter who, the anchor said, was "cherishing the moment of catching her glimpse of President Barack Obama."

"Wow," Rosemary said as three cars whushed by in the slush on a grey Ottawa day - she seemed like an intelligent person - "what an impressive sight."

Then Peter Mansbridge said: "Well, you'll remember that for the rest of your life, Rosemary. And so will the rest of the country."

And you know, somehow that seemed to make it slightly more true. Isn't that the weirdest? Could it be that something totally speculative becomes truer just because Peter Mansbridge repeats it on TV? Because, omigod, that would make him so powerful!

Then there was the meeting between the Prime Minister and the President, which lasted 33 minutes, rather than 30. "That was longer than scheduled," a CBC parliamentary reporter named Don Newman said. He has this amazing ability to keep talking and talking without seeming to take a breath - I think maybe he knows hypnosis. "So, I think that means they were getting along pretty well." I guess that's the insight you have after years on Parliament Hill.

At which point, I had a bit of a gaggy Sally Field moment, but I fought it off. I'm no cynic. I'm a positive person.

There was other fascinating stuff too: what the President and Prime Minister ate for lunch (Arctic char, yuck); the three mysterious "maple leaf cookies" he bought for his two daughters (the newspapers the next day gave front-page play to whether the third was for his wife, Michelle, or for him on the plane ride home). Shots of the backsides of Mr. H and Mr. O as they walked up the stairs of the Parliament Buildings, shots repeated over and over as though they were an infomercial for weight loss.

Speaking of which, the first time Mr. Obama and Mr. Harper went down the red carpet, the PM's blue shirt kept poking out below his buttoned blazer: Did you see that? I think he may be putting on weight again.

He trundles, too. Especially next to Mr. Obama's coolio prance. Mr. Harper stumped along beside Mr. Obama like he was the President's personal northern contractor: "Yep, well, yessir, we can prob'ly hook up some 'lectricity to your grid and keep the greasy carbon-filled refinery smoke up here, sir."

Mr. Harper said later that night that they talked about all kinds of stuff: not just major issues like the automobile industry and the recession and energy, "the big picture stuff," but also about their personal lives and their families and their "hopes and aspirations" for both their countries.

They must have been taking pretty fast.

I mean, if I told my mother I had finished that much homework in half an hour, you know what she would say? She'd call me a big fat liar, and tell me to go back to my room.

Still, I'm a positive person, and I'm willing to believe the visit amounted to an interesting day. I just don't think they should make it out to be more super-special than it was. Because it makes us Canadians look like awestruck teenage girls. Or like Sally Field. And while they may want to believe that in the cave where it's Happening Right Now, it just isn't true.

Down.