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** Q2 loan loss provisions consumed nearly one third of
operating income for the banking industry, the highest proportion of income
transferred to loss reserves since 1989. Loss rates increased 30% from Q1 and
the shape of the loss curve suggests we are still relatively early in the
adjustment cycle. We are sticking with our estimate of Q1 or Q2 2009 as the peak
for bank loss rates.

** Q2 charge off rates at 132bp for the industry are at highest
rates since Q4 1991. The industry continues to put aside $2 in provisions for
future loss for every $1 in current defaults, suggesting that the credit outlook
remains negative. Part of the reason: industry loan loss reserve coverage for
NPLs at 88.5% is the lowest in 15 years. The banking industry may need to
continue diverting significant portions of income to reserves for several more
quarters/years.

** The number of problem banks reported by the FDIC increased from 90 to 117 during
the quarter. Our list of institutions under stress in terms of lending was over
800 institutions in Q1 2008 and is now considerably higher. Users of The IRA
Bank Monitor will get a look at the Q2 results from our credit conditions index
next week.

By allowing the Treasury to make loans to, or invest in, the companies, Congress made explicit what had always been tacitly understood: that it stood four-square behind the two agencies, even though they have private shareholders and managers paid like Wall Street barons. That is capitalism at its worst: it means shareholders and executives reap the profits, but the taxpayer bears the losses. It is also risky. Between them, the firms have more than $200 billion of debt to roll over in the next month, and the markets are queasy. The collapse of just one bond auction could send shock waves around the world.

VIP的奥运门票大概和天价月饼一样，是中国现阶段市场经济的特殊现象，反映了社会资源的分配现状