BluegrassForeclosure.com

Not only does the rate itself climb, but new numbers out show that it is taking longer to find a job to replace the one you just lost.

From Cincinnati.com: “People who’ve lost their jobs are now spending seven months looking before finding new work – the longest average time between jobs on record.

The average time spent between jobs reached 29.1 weeks in December, according to the U.S. Bureau of Labor Statistics. That’s the longest span since records began being kept in 1948, and the figure has increased three straight months and 12 out of the past 13.

. . . .

The national unemployment rate hit 10.0 percent in December, while Ohio and Kentucky’s rates were 10.9 percent and 10.7 percent respectively last month. The 15-county Greater Cincinnati and Northern Kentucky region had an unadjusted rate of 9.9 percent in December.

. . . .

The increasing time between jobs is having a drastic impact on the national and regional social safety net, experts say.

Congress already has extended the length of unemployment insurance benefits three times in the past two years. But the number of people on unemployment has continued to climb, putting further stress on an already maxed-out system.

. . . .

In Kentucky, a total of 133,466 workers received Kentucky unemployment benefits in December, up 18 percent from January.

That has drained both states’ unemployment insurance funds, and Ohio and Kentucky early last year started borrowing from the federal government to keep benefits flowing.

. . . .

Ohio and Kentucky have been in the red since early last year, with Ohio borrowing more than $1.8 billion and Kentucky $634.4 million since then. The payback probably will cost each state tens of millions in interest expense.”

From the AP as posted at NYTimes.com:

“The economy’s 5.7 percent growth last quarter — the fastest pace since 2003 — was a step toward shrinking the nation’s 10 percent unemployment rate.

There’s just one problem: Growth would have to equal 5 percent for all of 2010 just to lower the average jobless rate for the year by 1 percentage point.

And economists don’t think that’s possible.

Most analysts say economic activity will slow to 2.5 percent or 3 percent growth for the current quarter as the benefits fade from government stimulus efforts and from companies drawing down less of their stockpiles.

. . . .

Another way of looking at it: A net total of about 3 million jobs would have to be created this year to lower the average unemployment rate by 1 percentage point for 2010, economists estimate. Yet even optimists think the creation of 1 million net jobs is probably out of reach this year.

High unemployment poses a risk to the unfolding recovery because it leads consumers to spend less, keeping economic growth weak. A sharp pullback in spending might even push the economy back into recession.”

If it takes us until 2015 to get unemployment levels back to normal, further recession or worse, is a distinct possibility.

I am introducing First Friday Trivia, centered mainly around the counties located here in Kentucky.  The county level is where all foreclosures occur, so knowing more about a county where you live or where you may wish to buy investment property is vital.  Here is the introductory trivia, going county by county.

Also, I’m going through the counties in a particular order, if you are the first person to leave a comment with the correct order, we’ll see if we have something to give away to make it worth your while.  And, if you have some good local trivia about your own county, drop a comment.

Thanks

“Counties are the largest administrative division in the Commonwealth of Kentucky.  Kentucky itself was once a separate county of Virginia.  In the early days, Kentucky was known as Fincastle County; it later became Kentucky County in 1776.”  (1)  There are 120 counties across Kentucky.

Starting with the first up in alphabetical order:

Adair County – Legendary Western Kentucky University Coach Ed Diddle was born in Adair County in 1895. (2)

Boyd County – The county was named for Linn Boyd, who had served as Speaker of the U.S. House of Representatives.  He was elected Lieutenant Governor in 1859, but died before his term was to begin.  (3)

Campbell County – Prohibition gave rise to syndicated crime in Covington and Newport.  [Newport] was a major headquarters for big-time gambling.  Eventually a reform movement was successful in the 1960′s. (4)

Crittenden County – was once one of the nation’s largest producers of fluorspar.* (5)

Franklin County – The early 19th century was a time for growth and prosperity in Franklin County.  The Marquis de Lafayette visited in May, 1825. (6)

Harlan County – On the southern border lies the Great Stone or Cumberland Mountain, surmounted by a stupendous rock one mile long and 600 feet high. (7)

Jessamine County – Camp Nelson, U.S. Military Cemetery was established in 1863. (8)

Leslie County – Hyden, the county seat, is home to the Frontier Nursing Service, a health service organization founded by Mary Breckinridge in 1925. (9)

Marion County – Maker’s Mark Distillery is the oldest continuously-0perated distiller in America.  (10)

Mercer County – General Hugh Mercer, of Virginia, from whom this county received its name, was native of Scotland, and graduated at an early age in the science of medicine. . . . In the Indian war of 1755, he served as a captain under Washington. (11)

Oldham County – Credited as being one of the greatest film producers of all time, D.W. Griffith was born in 1875 in Oldham County. (12)

(1) All information taken from Clark’s Kentucky Almanac and Book of Facts, The Clark Group, Pg. 143, 2005.

(2) Id., Pg. 144.

(3) Id., Pg. 153.

(4) Id., Pg. 162.

* Fluorspar is fluorite, just in case you wondered . . . .

(5) Id., Pg. 171.

(6) Id., Pg. 180.

(7) Id., Pg. 191.

(8) Id., Pg. 200.

(9) Id., Pg. 209.

(10) Id., Pg. 218.

(11) Id., Pg. 227.

(12) Id., Pg. 236.

From Cincinnati.com:  “Office vacancy grew to 20.2 percent by the end of 2009, rising most sharply in Tri-County, Northern Kentucky and on the west side of Cincinnati.”

Certainly a side-effect of unemployment.  With less people working and companies expecting the remaining workers to do more with less, companies are scaling back any way they can, including downsizing their office space.

Offices are only being hit, but retailers and industrial space as well.

“Retailers continue to file bankruptcy and flee their space in once bustling retail centers. But vacancies have given some retailers opportunities to rent cheaply or redevelop old retail centers, said Sean Wall, a Colliers broker.

Industrial vacancy may be the biggest concern for the local market. It has reached its highest point in 15 years at 10.2 percent.”

It’s a buyer’s market out there.  The same can be said about commercial space, it’s a tenant’s market.

“Landlords are willing to negotiate lower rent, operating costs or tenant improvements to keep tenants for longer terms, bring stability to their properties and prevent foreclosure.

Still, foreclosure rates are expected to rise again in 2010 as banks remain stringent, property values decrease and loan terms come due.”

I don’t foresee banks being willing to untighten their already tight restrictions on business lending in the first 6 months of 2010.  Even if restrictions are relaxed, banks are not loaning anything unless a business has some liquid cash.  I don’t know very many businesses with any liquid cash for expansion or anything.  Most that I have heard from are simply trying to keep their heads above water.

How is your business or industry doing?  Leave a comment.

The Louisville Metro area foreclosure rate soared in 2009.  From the Courier-Journal:

“There were 6,302 foreclosure filings in the 13-county Louisville-Southern Indiana metro area last year, up about 47 percent from 2008 and 97 percent from 2007, according to report by research firm RealtyTrac.

That worked out to 1.15 percent of housing units in the metro area receiving a foreclosure filing, below the national average of 2.21 percent, according to the firm.

. . . .

Kentucky has fared better than the nation as a whole through the current housing troubles, said Ken Troske, director of the Center for Business and Economic Research at the University of Kentucky.That’s because the state didn’t see much of a price bubble, and Kentucky homeowners were mostly able to resist borrowing against their equity and speculative house flipping — practices that got others in trouble.”

With unemployment rates still high though, Kentucky is far from the crisis remaining.

“I am pleased to report solid fourth quarter earnings, given the current credit cycle, and pleased to convey a number of very positive trends in our performance,” said Chairman and Chief Executive Officer Kelly S. King.

. . . .

”

Growth rate in nonperforming assets slows to 7%; early stage credit indicators remain stable

The linked-quarter growth rate in nonperforming assets slowed to 7% in the fourth quarter of 2009 compared to 23% in the third quarter of 2009. Nonperforming assets as a percentage of total assets increased to 2.65% at Dec. 31, 2009, compared with 2.48% at Sept. 30, 2009. Annualized net charge-offs were 1.83% of average loans and leases for the fourth quarter of 2009, an increase from 1.71% in the third quarter. Early indicators of problem loans continue to be relatively stable compared with the third quarter of 2009 and have improved significantly compared to year-end 2008 levels.

The provision for credit losses totaled $725 million in the fourth quarter of 2009, an increase of $197 million compared with the fourth quarter of 2008, and exceeded net charge-offs by $237 million, or $.21 per diluted share. The higher provision increased the allowance for loan and lease losses as a percentage of loans held for investment to 2.51% at Dec. 31, 2009, compared with 2.29% at Sept. 30, 2009. The increases in nonperforming assets and the provision for credit losses were driven by continued deterioration in housing-related credits.”

Read more here.

The statewide unemployment numbers show unemployment still rising for December.  Not a good way to close out the year, especially when seasonally hiring should have been at its peak.

“Unemployment rates rose in 119 Kentucky counties between December 2008 and December 2009, according to the Kentucky Office of Employment and Training, an agency of the Kentucky Education and Workforce Development Cabinet.”  Click here for the full press release.

Magoffin County was the worst at 21.4%; 1 in 5 workers were unemployed, and since the official count doesn’t account for everyone, this percentage is really closer to probably 1 in 4 workers . . . and with no prospects in sight to creating jobs, and the legislature too afraid to take bold action, the foreclosure rate will most assuredly remain steady, if not continue to grow.

Other counties with high unemployment numbers: Powell 16.9%; Jackson 17.8%; Menifee 17.5%; Grayson 16.0%; and Trigg 16.5%.  These counties are located throughout Kentucky without much rhyme or reason, except a lack of infrastructure to assist in creating jobs.  Once manufacturing moves out, and there is no tobacco or other agricultural support, these counties do not have many options.  Foreclosure rates will go up, crime will rise, drug use will rise and it is a potential endless cycle.

The national unemployment rate is 9.7%, much too high to the say the least, but gives a good comparison to what is going on here in Kentucky.

Click here for all of the rates in each county for December 2009.

How is your county doing right now?  Leave a comment.

“Fifth Third Bancorp (Nasdaq: FITB) . . . reported full year 2009 net income of $737 million compared with a net loss of $2.1 billion in 2008. 2009 net income available to common shareholders was $511 million or $0.67 per diluted share compared with a 2008 net loss of $2.2 billion or $3.91 per diluted share.

Fourth quarter 2009 results were a net loss of $98 million compared with a net loss of $97 million in the third quarter of 2009 and a net loss of $2.1 billion in the fourth quarter of 2008. After preferred dividends, the fourth quarter 2009 net loss available to common shareholders was $160 million or $0.20 per diluted share, compared with a third quarter net loss of $159 million or $0.20 per diluted share, and a net loss of $2.2 billion or $3.78 per diluted share in the fourth quarter of 2008.

. . . .

“Fourth quarter credit trends were better than expected and showed encouraging signs of improvement,” said Kevin T. Kabat, Chairman, CEO and President of Fifth Third Bancorp. “Net charge-offs were $708 million, down $48 million from the third quarter, with improvement in both commercial and consumer loan losses. We expect net charge-offs to decline again in the first quarter, reflecting relatively stable consumer trends and lower C&I and commercial real estate losses, and our current expectation is for full-year 2010 net charge-offs to decline from those realized in 2009 as we experience lower loss content in problem assets at this stage of the cycle.

. . . .

Average commercial loan and lease balances decreased 4 percent sequentially and declined 14 percent from the fourth quarter of the previous year. The sequential and year-over-year decline in average commercial loan and lease balances was largely driven by lower customer line usage, which was down $1.0 billion from the previous quarter and $3.9 billion from the same quarter the previous year. During the fourth quarter of 2009, commercial and industrial (C&I) average loans decreased by 6 percent sequentially and 15 percent from the previous year primarily due to lower customer line usage. Average commercial mortgage and commercial construction loan balances declined by a combined 4 percent sequentially and 17 percent from the same period the previous year, reflecting low customer demand and tighter underwriting standards.

Average consumer loan and lease balances decreased 1 percent sequentially and declined 3 percent from the fourth quarter of 2008. Both sequential and year-over-year comparisons reflect lower home equity and residential mortgage loan balances partially offset by growth in credit card and auto balances.

. . . .

Commercial net charge-offs were $468 million, or 408 bps, in the fourth quarter of 2009, a decrease of $32 million from the third quarter of 2009, which included $95 million of losses on shared national credits. Within the commercial portfolio, C&I losses were $183 million, a decrease of $73 million from the previous quarter. Losses on loans to companies in real estate-related industries were $71 million, an increase of $31 million from the previous quarter. Commercial mortgage net losses totaled $142 million, an increase of $24 million from the previous quarter. Michigan and Florida accounted for 56 percent of commercial mortgage losses. . . . Originations of homebuilder/developer loans were suspended in 2007 and the remaining portfolio balance totals $1.6 billion.

Consumer net charge-offs of $240 million, or 297 bps, declined $16 million from the third quarter of 2009. Michigan and Florida represented 47 percent of third quarter home equity losses and 29 percent of total home equity loans. Net charge-offs within the residential mortgage portfolio were $78 million, a decrease of $14 million from the previous quarter, with losses in Michigan and Florida representing 73 percent of losses in the fourth quarter and approximately 42 percent of total residential mortgage loans.

From Ky.gov:

“Kentucky consumers considering a mortgage now have a new online resource to make sure their lender is licensed.

The Kentucky Department of Financial Institutions (DFI) today announced the launch of “NMLS Consumer Access.” Available at www.nmlsconsumeraccess.org, NMLS Consumer Access is a searchable Web site that allows the public to view information concerning state-licensed mortgage companies, branches and individuals currently licensed through the Nationwide Mortgage Licensing System & Registry (NMLS). DFI was one of the first seven state regulators to join the NMLS in 2008.

. . . .

The goal of NMLS Consumer Access is to provide homebuyers and the general public with greater information regarding state-licensed companies and professionals in the mortgage industry. NMLS Consumer Access benefits consumers by providing a single location to access standardized information regarding mortgage providers, regardless of the state in which they operate.”

More information about mortgage lenders is a good thing.  Considering the unscrupulous actions of many different entities that led to the subprime meltdown, a little more sunshine and transparency for companies is beneficial for all consumers.

RealtyTimes.com has an interesting report on the commercial property bubble as well.  As many of you are aware, the commercial market lags behind the residential market.  At the height of the residential lending bubble, commercial properties saw a bubble begin.

“Towards the end of the residential real estate boom, the commercial real estate market also saw a boom itself. Fueled by easy credit and new investors entering the market the commercial real estate market exploded.

Thousands of these properties were purchased at the height of the market and were highly leveraged. These properties may have performed well enough to cover debt service and operating costs when occupancy rates were at historic highs, but now that businesses are tightening their belts, unemployment is rising, consumers are not spending money on goods and services or traveling the pressure is mounting on commercial property owners. This scenario has left these commercial owners in an extremely precarious situation. If the poor economy doesn’t push these owners to a breaking point, the lender that holds the mortgage on the property will.”

We’ll have to sit and watch what happens.  Since the recovery, what little we’ve had so far, has been without many new jobs, it is unlikely that the commercial property economy is going to bounce back any time soon.  I doubt businesses loosen the purse strings any more than they have til now.  Banks are not going to be lending much money either.  This certainly makes for a perfect storm for the commercial market as well.

What are your thoughts?