3 banks fail - 20 so far this year

The FDIC estimates that the cost of the three failures will run in excess of $200 million. One bank was not able to find a buyer, two others were



FDIC estimates that the combined cost of the bank failures to its deposit insurance fund will be approximately $207 million.



The announcements mark the ninth week in the past ten that bank failures have been reported.
FirstCity Bank, based in Stockbridge, Ga., with $297 million of assets and $278 million of deposits as of March 18, was closed by state regulators, according to the Federal Deposit Insurance Corp., which was named the receiver.



The FDIC, unable to find a bank to take the assets of FirstCity, said on Monday it will mail the bank's former customers checks to cover insured funds.



A message on First City's Web site said that "an assuming bank could not be located."



According to an FDIC representative, the assets of the failed bank in Georgia were not attractive to buyers. "There was no franchise value," wrote David Barr, spokesperson for the FDIC, in an email. "More than half the deposits were out of area and the assets were highly concentrated in development loans. We had interest until they saw the deposit and asset makeup."

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Stocks: Crossroads ahead

NEW YORK (CNNMoney.com) -- The next week -- the last full week in the quarter -- promises to be a critical one for investors looking for reasons to either resurrect the stalled rally or retreat even further.

"As we approach the end of the quarter the big question is if we can push the S&P 500 above the 800 level," said Michael Sheldon, chief market strategist at RDM Financial Group

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He said that if the market can make that move, it would add weight to bets that the much longed for bear market bottom was put in place earlier in March. Twice late last week, the S&P 500 topped the 800 level, only to turn tail and run.

"We need another leg up on decent [trading] volume before more buyers will come in off the sidelines," Sheldon said. "Unless something changes, you have to consider the current advance a rally in the bear market, but you never know."

Key economic reports are due this week on home sales and income and spending, while in Washington, Congress talks AIG and regulatory reform. But more notable will be if Wall Street is able to recharge the advance after it lost steam at the end of last week.

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Bank losses revised up to $32B

WASHINGTON (Reuters) -- The U.S. bank industry posted a net loss of $32.1 billion in the fourth quarter of 2008, according to revised statistics released by the Federal Deposit Insurance Corp. Friday.

The FDIC had previously reported that the industry had posted a net loss of $26.2 billion - its first quarterly loss since 1990 - but significant amendments showing substantially higher charges for goodwill impairment prompted the agency to update the figures.

The decline in total equity capital was revised to $10.1 billion from a previously reported figure of $3.7 billion. The additional goodwill write-downs had no effect on the industry's regulatory capital, because goodwill is not included in regulatory capital.

The FDIC did not provide the names of the institutions which accounted for the largest losses.

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Emergency biz loans: What qualifies

NEW YORK (CNNMoney.com) -- The Small Business Administration is still drawing up guidelines for its forthcoming emergency loans program, a stopgap measure intended to shore up small businesses struggling to keep up with payments on existing debt. But the agency this week confirmed an unexpected twist: Businesses with current loans backed by the SBA won't be able to use the new loans to cover payments on their existing SBA debt.

The upcoming program, tentatively dubbed the "America's Recovery Capital" (ARC) loan program, is a measure mandated by last month's stimulus bill. The bill requires the SBA to create a new "business stabilization" program to back loans of up to $35,000 to small businesses "experiencing immediate financial hardship." The loans are intended to be used to make interest and principal payments on a "qualifying small business loan" for up to six months.

In several announcements this week, SBA officials said that SBA-backed loans made before the stimulus bill's passage on Feb. 17 won't be eligible for ARC loan relief. The reason: The American Recovery and Reinvestment Act, the stimulus bill, forbids it. A provision Congress wrote into the bill explicitly prevents the new stabilization loans from being used to pay down SBA-backed loans made before the bill's enactment.

A staffer with the House Small Business Committee said that restriction was mandated by the Congressional Budget Office to comply with pay-as-you-go prohibitions against increasing the federal deficit through new direct-spending measures.

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California unemployment jumps to 10.5%

SAN FRANCISCO (Reuters) -- California's unemployment rate increased to 10.5% in February from 10.1% in January as the most populous state's economy worsened, official data showed Friday.

California's February jobless rate far exceeded both the state's 6.2% rate a year earlier and the national unemployment average for February of 8.1%, according to the report by the state's Employment Development Department.

California lost 116,000 non-farm payroll jobs in February from January and 605,900 non-farm jobs from a year earlier, marking a 4% decrease in nonfarm payrolls, the report said.

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Profits up at luxury group Hermes

French luxury goods firm Hermes has said profits rose in 2008, shrugging off concerns about the impact of the global economic downturn.

Shares gained 3.1% in Paris as its profit of 290m euros ($395m; £273m) was higher than analysts had forecast and the company increased its dividend.

Hermes generated revenues of 1.76bn euros last year, up 8.6% from 2007.

It said sales so far in 2009 were "slightly" higher thanks to the stronger dollar and yen.

Asian boost

Hermes, famous for its handbags and silk ties, proposed a dividend of 1.03 euros, up from 1 euro the previous year.

It said all regions had registered growth except for Japan, which is traditionally one of the largest markets for luxury goods. Same-store sales in Japan fell 3% last year.

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Iceland interest rates cut to 17%

The central bank of crisis-hit Iceland has cut its interest rate to 17%.

The rate cut is the first since Iceland agreed a $10bn financial aid package with the International Monetary Fund.

The Sedlabanki cut rates by one percentage point from 18%, where they had remained since October on the recommendation of the IMF.

Iceland's financial system collapsed in October under the weight of debt, leading to a currency crisis, rising unemployment and public protests.

Iceland's economy is forecast to shrink by almost 10% this year.

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World Bank lowers China forecast

The World Bank has cut its prediction for China's economic growth in 2009 from 7.5% to 6.5%, saying it could not "escape the impact of global weakness".

Falling demand for Chinese goods abroad is seen as the main reason for the cut.
But the bank added that China's economy was still holding up well compared to other countries, and remained a bright spot amid all the financial gloom.

Analysts are particularly worried about a slowdown in China, due to the threat of social unrest if the economy stalls.

Exports exposure

China is heavily dependent on the global economy that buys its imports. But as recession grips the US and Europe - which are among its largest customers - demand has fallen, resulting in factories closing and millions of people losing their jobs.

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Economic woes hit Dubai ratings

Standard & Poor's has cut the credit ratings of six Dubai government-backed entities and a leading property firm.

It comes weeks after Dubai's finance ministry sold $10bn (£6.9bn) in bonds to the United Arab Emirates (UAE), to ease the emirate's liquidity problems.


Dubai is one of seven members of the UAE federation.
S&P said that the worsening world economy could hit sectors vital to the Dubai economy such as trade, tourism and commerce.


S&P analyst Farouk Soussa said the downgrades followed a cut to the in-house sovereign rating S&P has for Dubai, a rating which remains confidential.

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