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BANKING AND FINANCE INDUSTRY ANALYSIS
Industry: Banking and Finance Number of Companies on the Index: Twenty-Two By: Michael C. Ross, JD Publication Date: 1/7/08 Period Covered: December 2007
I) BACKGROUND 1) Focus: This report focuses on the jointly related Banking & Finance Industries. 2) Period: The tracking period was 20 days. The Index, like the markets, was closed one day – Christmas. The markets also had one half day (Christmas Eve day). The market was open all day on New Year’s Eve. The period began December 3, 2007 and ended December 31, 2007. Here is what the Index has to report: a) The Banking and Finance category opened December at $544.15 and dropped in trading to $511.69. That equates to a $32.46 loss for the month and a combined $54.95 loss for both November and December 2007. b) Even with the heavy hits the banking industry, home loans and the economy took in November and December 2007, four (out of 22) California companies posted increases. The companies whose stock increased in value are: Company Fremont General PFF Bancorp Redwood Trust SCPIE Holdings 12/07 opening $2.51 $9.40 $30.53 $27.17 12/31/07 close $3.50 $12.04 $34.24 $27.47 increase $0.73 $1.39 $7.89 $0.32
c) The largest loser in December was Downey Financial (NYSE:DSL). Their shares fell from $41.61 to $31.11. This equates to a $10.50 loss. When combined with the November 2007 statistics, their overall loss during the two month period was $9.92. II) FORECAST With legislatures opening up around the nation, including congress, the Banking and Finance Industry will be under close scrutiny. Regulators and elected officials are watching lending practices, investment purchasing and consumer repayment of both long term and short term debt (home mortgages and credit cards). Playing an interesting role in this area are the following questions: a) How do public policy officials “fix” (or stimulate) the economy during an election year?
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“The Web Portal That’s Creating Unique California Statistics & Economic Indicators” b) What is the final solution going to be with respect to a Congressional bailout of the industry with respect to sub prime mortgages? c) How will political bodies stop the increasing foreclosure rates, as well as credit card defaults?
III) HISTORY December 10, 2007 a) The Banking and Finance Index segment of the California Index started the month at $566.64 and closed at $544.15. This equates to a loss between the 22 companies over that period of $22.49 or about $1 per company. b) The combined industries that make up this segment of the Index were the second largest losers overall after the Healthcare Industry. c) The company with the largest movement during that period was IMPAC Mortgage. IMPAC Mortgage went from $1.12 to $.61. On December 4, they were notified by the NYSE of non compliance of stock prices (URL: www.thecaliforniaindex.org/2december2007/article). d) The company with the smallest movement during that period was SCPIE. Their stock value increased in value from $27.15 to $27.17, a 2 cent increase. e) Four companies increased stock value during that period. They were: a. First American Open : $30.10 Closed: $34.18 + $4.08 b. Redwood Trust Open : $26.35 Closed: $30.53 + $4.18 c. Imperial Capitol and Open : $21.59 Closed: $22.80 + $1.21 d. SCPIE Open : $27.15 Closed: $27.17 + $ 0.2 cents f) Union Bank of California was off 2 cents per share during this reporting period.
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