bank run blog

The collapse of the US financial sector has caused another round of upheavals in the market for naming rights for professional sports venues, as some prominent stadium sponsors vanish due to bankruptcies or acquisitions, and others back out of new deals. The recent failure of Washington Mutual and takeover of Wachovia will impact several venues nationwide, most prominently Philadelphia’s Wachovia Center, home to the Flyers and the 76ers, which will get its fourth name in 12 years. Spokesmen for insurance giant AIG have said that its sponsorship deal with Manchester United will not be affected by financial troubles that necessitated an $85 billion bailout from the US Treasury.

With capital tight even among the big corporate players that compete for naming rights, franchise owners are discovering that this is a bad time to be opening a new stadium. The Dallas Cowboys control one of the most valuable brands in sports, yet in the current climate, negotiations for rights to name their new facility have reportedly stalled.

cross posted at

redstateupdate.net

With millions of Americans becoming unemployed or losing their health insurance coverage in a recessionary economy, community organizers and health care advocates have decried the increasing tendency of large not-for-profit hospital systems to withdraw from low-income metropolitan areas, even as they expand in more affluent suburbs nearby. Across the country, state and municipal authorities have initiated numerous legal actions seeking to hold health care corporations to their obligations to provide substantial services to underserved local communities in return for the generous tax exemptions they receive. At the federal level, a recent report by the Government Accountability Office found that nonprofit hospitals and the companies that operate them have too much discretion in defining the “community benefits” that they are required to offer to maintain their tax-exempt status.

The market approach of the large nonprofit hospital chains was detailed in a report last week by the Wall Street Journal focusing on the country’s largest such system, Ascension Health, which operates 67 hospitals in 20 states. Last year Ascension closed its Riverview Hospital in Detroit, the third inner-city facility shuttered by the company in ten years, and the last remaining hospital on the city’s east side. According to the Journal, in 1960 Detroit had 42 hospitals within its city limits; today there are only four. At the same time, Ascension spent $224 million to build a state-of-the-art facility in Novi, an affluent community 30 miles northwest of Detroit. The new Providence Park Hospital features private rooms with flat-screen televisions.

Nonprofit hospital operators typically expend less than 4 percent of patient revenues on charitable services in order to receive local, state, and federal tax-exempt status. Ascension spends about 2.5 percent on charity care, the highest percentage among the nation’s five largest not-for-profit hospital systems, according to the Journal report. Commenting on the GAO report on variations in community benefit criteria, Sen. Charles Grassley (R-IA) said it “makes clear that tax-exempt hospitals are free to define community benefit as they see fit.” The report notes, “Since 1969, the IRS has not specified that these hospitals have to provide charity care to meet these requirements, so long as they engage in activities that benefit the community.”

cross posted at

redstateupdate.net

An assessment of the environmental damages left in the wake of Hurricane Ike performed by the federal government found that oil extraction industries were hit hard by the storm, causing releases of hazardous chemicals and oil products into the ravaged area. According to a report released by the Minerals Management Service, more than 500,000 gallons of crude oil were released into the Gulf of Mexico and island beaches, bayous and marshes that stretch from Texas to Louisiana.

The agency said that there were 3,000 pollution reports between September 11th and 18th, and 448 incidents of the release of oil, gasoline, and other petrochemical pollutants. The area hit
by the hurricane contains a high concentration of oil related industrial production facilities. Offshore in the Gulf of Mexico there are 3800 oil drilling platforms. 86 of these were damaged, with 54 of them completely destroyed. The Coast Guard said it received a report of a hazardous gas release or toxic chemical or oil spill every five to 10 minutes in the aftermath of the storm.

The report said that researchers found the most common contaminant left in the wake of the hurricane was crude oil. Researchers found that air contaminants from chemical plants and refineries were the second most common dangerous release. While the environmental devastation of the recent storm was less than the damages left after Hurricane Katrina, MMS reported that more than1500 sites will require environmental remediation.

The most severe spill took place at an oil refining facility operated by the St. Mary Land and
Exploration Company, on a spit of uninhabited land in the gulf. The company had abandoned the oil refining plant before the hurricane hit. When employees of the company returned to the site a day after Ike made landfall, it was discovered that storage tanks holding 266,000 gallons of crude oil had been breeched. Company officials said that the oil had simply vanished into the gulf.

In spite of these examples of the kind of pollution that can be caused by natural calamities such Hurricane Ike, the candidates running for president from both parties agree that oil reserves in US waters should be exploited whatever the environmental costs may be.

cross posted at

redstateupdate.net

RealtyTrac reported that US foreclosure filings increased 71 percent in the third quarter from a year earlier. The rise was the largest increase ever reported by RealtyTrac. 765,558 US homes received a forclosure or auction notice in the last quarter of 2008.

More than 60 percent of the foreclosure filings happened in six sates. California had 210,845 foreclosure filings and there were 127, 306 foreclosure filings in Florida last quarter. Foreclosure acions in Arizona almost tripled over last year at this time, with over 40,000 homes being foreclosed upon, and filings rose by 95 percent over last year in New Jersey to 17,893 filings. The Guardian writes;

“California had six of the 10 metropolitan areas with the highest foreclosure rates in the quarter, led by Stockton, where 3.69 of the housing units received a default filing in the quarter. Riverside-San Bernardino ranked third, Bakersfield was fourth, Sacramento was seventh and Fresno and Oakland ranked ninth and 10th, respectively…

Las Vegas had the second-highest metro foreclosure rate with 3.48 of its housing units receiving a filing in the third quarter, more than double the amount from a year earlier…

Nationwide in September, one in every 475 U.S. housing units received a foreclosure filing.”

Yahoo notes that areas with high rates of unemployment tend to have high rates of foreclosure flings; “the less income people have, the less likely they can afford their mortgages.”

The Guardian reports that at the same time, fewer homes are being sold in the US and property values are plummeting;

“The worst U.S. housing slump since the 1930s is being compounded by a recession that began in the third quarter and may last a year or more, according to Jay Brinkmann, chief economist for the Mortgage Bankers Association. Home prices in 20 U.S. metropolitan areas fell in July at the fastest pace on record, and sales of previously owned homes in August were 32 percent below the peak reached in September 2005.”

see stories-
Guardian UK : Foreclosure Filings Rose 71% in Third Quarter as Prices Fell
Yahoo Finance : America’s Next Foreclosure Capitals

The Federal Deposit Insurance Corporation announced that it has closed the Alpha Bank and Trust of Alpharetta, Georgia in cooperation with the Georgia Department of Banking and Finance.

The FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume the insured deposits of Alpha Bank & Trust. Stearns Bank will also purchase approximately $38.9 million of Alpha’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC said in a release;

“The two branches of Alpha Bank & Trust will open on Monday, October 27, 2008 as Stearns Bank, N.A. Depositors of the failed bank will automatically become depositors of Stearns Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.”

Alpha Bank & Trust had total assets of $354.1 million and total deposits of $346.2 million. At the time of closing, there were approximately $3.1 million in uninsured deposits held in approximately 59 accounts that potentially exceeded the insurance limits.

The FDIC estimates that the cost to its Deposit Insurance Fund will be $158.1 million. Alpha Bank & Trust is the sixteenth FDIC-insured institution to be closed so far this year

see resources-
FDIC Failed Bank Information Page : Stearns Bank, National Association Acquires the Insured Deposits of Alpha Bank & Trust, Alpharetta, GA
Atlanta Journal Constitution : Alpharetta’s Alpha Bank and Trust shut down