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DECOmOLIED AFTER SIX MOUTHS L.5.8 Confidential (F.R.) PITAL MARKET DEVELOPMENTS September 20, 1971 INDEX Developments in the Corporate and Municipal Bond Markets Capital Market Yields Capital Market Volume Stock Market Mortgage Market SYMBOLS: Estimate Preliminary Revised Not available TABLE 1: Yields, Volume and Reception WEEK ENDING: NEW ISSUE Aug. 6 13 20, 27 Sept. 3 10 17 24 .! WEEK ENDING: • * i1971 - Aug. f 1 1 6 13 20 21 Sept., 3 10 17 24 8.02 7.97 7.33 7.48 7.38 7.21 7.56 n.a. MOODY'S SEASONED Aaa -CORPORATE BOND MARKET VOLUME2 PER CENT GROSS SOLD BY END OF WEEK OFFERINGS 8.69 7.71 7.51 7.50 w 7.45 YIELDS BOND BUYER MOODY'S SEASONED SEASONED 20 Aaa BOND INDEX 247 194 239 383 100 100 76 79 413 54 77 93 n. a. 673e 775e MUNICIPAL BOND MARKET VOLUME2 PER CENT GROSS SOLD BY END OF WEEK OFFERINGS 5.88 5.80 5.15 5.45 6.07 6.03 5.49 5.71 203 570 232 415 72 80 90 78 5.30 5.00 . 5.10/ n.a. 5.39 5.36 5.38 n.a. 474 371 350 218e 91 34 77 n.a. BONDS SCHEDULED WITHIN 28 DAYS n» a. n e a. n.a. BONDS SCHEDULED WITHIN 28 DAYS 1,076 588 750 970 805 848 910 n.a. Derived by adjusting to a Aaa basis, new issues of publicly-offered corporate bonds with call protection, rated A, Aa, or Aaa by Moody's Investors Service (except serial and convertible issues, offerings of natural gas pipeline and foreign companies, and bonds guaranteed by the Federal Government.) Millions of dollars unless otherwise indicated. Note:- See footnotes to Table 3 TABLE 2: Details on Inventories D A T II OFFERED AMOUNT (MIL. •<>) 9/15 9/15 9/15 9/14 9/14 9/14 9/13 9/7 OFFERED CORPORATE BONDS IN SYNDICATE END OF LATEST WEEK ORIGINAL RATING AND " ISSUER YIELD CALL PROTECTION COUPON 30.0 200,0 50.0 15.0 75.0 125.0 23.0 35.0 1 RELEASED 9/8 8/17 8/31 9/13 9/13 9/13 Central 111. Lt. Mobile Oil Essex Int 1 1 Iowa P.S. S.W. Bell Tel S.W. Bell Tel Cent 1 1 111. P.S. Kentucky Utils 7-7/8 7-3/8 5-3/8 8.00 7.00 7.75 7-7/8 7-5/8 Sept. Aa Aaa/AA. Baa A/AA Aaa Aaa Aa Aa ESTIMATED PROPORTION SOLD 5 yrs 10 yrs 85% 98% 75% 98% 98% 90% 50% 25% -- 5 7 5 5 5 yrs yrs yrs yrs yrs CORPORATE BONDS RELEASED FROM SYNDICATE DURING LATEST WEEK ORIGINAL INCREASE RATING AND ESTIMATED PROISSUER COUPON IN YIELD CALL PROT. PORTION RELEASED YIELD VEFCO Cinn Bell Con Ed 7.50 7-3/8 7.90 INVENTORIES 1 MUNICIPALS BLUE LIST | IN SYNDICATE 20 27 7.85 7.375 5.375 8.05 6.95 7.75 7.75 7.45 T AMOUNT 50.0 50.0 150.0 DATE 1971 - August [ 495 586 32 105 7.47 7.40 7.90 +25 +35 +36 Aa Aaa A 5 yrsi 5 yrs 5 yrs 75% 80% 40% CORPORATES IN SYNDICATE 58 82 3 569 r 67 240 10 565 243 164 648 17 112 73 N.C. - No call protection. All figures in millions of dollars. Blue List is daily average for week ended Friday,except fof latest week which is daily average of three days ended Wednesday. All other figures are as of Friday. f TABLE 3: High Grade Bond Yields DATE NEW CORPORATE Aaa 1 MOODY'S SEASONED CORPORATE Aaa 2 U.S. GOVERNMENT 20-YEAR CONSTANT MATURITIES 3 BOND BUYER'S SEASONED MUNICIPALS 4 1969 - High Low 8.85 (12/5) 6.90 (2/21) 7.84 (12/26) 6.55 (1/12) 6.97 (12/26) 5.96 (1/24) 6.90 (12/18) 4.82 (1/28) 1970 - High Low 9.30 (6/19) 7.68 (12/18) 8.60 (7/3) 7.48 (12/31) 7.55 (5/29) 6.17(12/18) 7.12 (5/29) 5.33 (12/11) 1971 - High Low 8.23 (5/12) 6.76 (1/29) 7.71 (8/13) 7.06 (2/12) 6.51 (6/18) 5.69 (3/23) 6.23 (6/24) 5.00 (3/18) 1971 - Aug. 20 27 7.33 7.48 7.51 7.50 6.12 6.19 5.49 5.71 5.39 6.06 7.38 7.45 Sept. 3 5.36 7.21 7.42 5.99 10 5.38 6.08 7.56 7.44 17 1 New corporate issues, with call protection, adjusted (as described in footnote 1 of Table 1) to a Aaa basis. 2 Meekly average of daily figures. Average term of bonds included is 22-24 years. 3 Weekly average of daily figures. 4 Thursday figures. The average rating of the 20 bonds used in this index falls midway between the four top groups as classified by Moody's Investors Service. Note--Highs and lows are for individual series and may be on different dates for different scries. 6 TABLE 4: Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) ' I GROSS PROCEEDS CORPORATE1 PERIOD 1971 1970 STATE AND LOCAL 2 1969 __ 1971 1970 ' 1969 January February March 3,115 3,000 6,075 2,636 1,802 3,539 2,075 2,045 2,098 2,705 1,839 2,144 1,340 1,214 1,555 1,262 987 538 April May June 4,007 3,271 r 4,375 3,170 3,909 3,389 2,748 2,076 2,530 1,907 2,135 2,008 1,647 996 1,085 1,801 1,110 737 July August September 4,OOOe 2,850e 2,768 2,274 2,518 2,478 1,427 2,427 1,928 l,828e 1,348 1,359 1,758 1,097 808 : 559 i 3,777 4,182 3,980 1,933 2,375 2,532 1,924 1,748 2,190 1,280 886 ' 816 f 12,190 11,654 7,977 10,468 8,560 11,939 6,218 7,354 6,332 6,840 6,688 6,050 4,109 3,728 4,465 5,862 2,787 3,648 2,464 ;• 2,982 t 23,844 18,445 27,005 38,944 13,572 19,904 26,744 12,738 7,837 12,302 18,164 6,435 : 8,899 ; 11,881 * October November December 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 1st half Three quarters Year Excluding finance companies 3 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 6,170 7,037 Year 1 2 3 Securities and Exchange Commission estimates of gross proceeds. Investment Bankers Association of America estimates of principal amounts. Total gross proceeds excluding offerings of sales and consumer finance companies. ; : 7 TABLE 5: New Corporate Security Issues, Type of Issue and Issuer (In millions of dollars) QUARTER OR MONTH , TOTAL GROSS PROCEEDS BY TYPE OF ISSUE COMMON AND MEMO: BONDS PUBLICLY PRIVATELY PFD. ISSUES INCLUDED MFG. STOCK FOREIGN | CONVERTIBLE OFFERED PLACED GROSS PROCEEDS BY TYPE OF ISSUER PUBLIC UTILITY COMMUNICATIONS OTHER ISSUERS1 2,162 868 1,346 1,606 896 3,048 2,663 4,020 3,594 4,753 353 144 279 445 371 693 282 994 1,143 682 838 1,300 1,033 1,687 10,468 8,560 11,938 12,190 11,688 6,994 5,987 7,827 8,369 6,546 1 ,282 914 1 ,421 1 ,516 1 ,758 2,190 1,659 2,690 2,306 3,384 135 83 226 84 215 710 287 737 724 1,351 2,,445 2,,314 3,,169 3,,794 3= ,130 2,,812 2,,714 3,,406 3,,197 2,,910 1970 - June July Aug. Sept. Oct. Nov. Dec. 3,389 2,768 2,274 3,518 3,777 4,181 3,979 1,931 1,831 1,731 2,425 2,390 3,001 2,436 436 320 205 389 304 283 834 1,021 617 338 704 1,083 898 709 26 68 11 4 56 11 159 82 107 59 121 388 184 165 939 638 682 994 1 ,006 1 ,107 1 ,056 1,,103 843 630 ,241 1: 1:,101 1 ,350 955 1971 - Jan. Feb. Mar. 3,115 3,000 6,075 2,033 2,201 4,135 594 275 647 489 524 1,293 43 3 38 99 168 557 716 661 2 ,4,17 676 1 ,069 1 ,452 391 683 532 1,332 587 1,675 1,419 4,042 2,116 507 116 384 Apr. 1 ,135 1 ,267 633 3,271 2,148 255 588 491 47 588 May 1,332 2,282 52 760 712 1 ,055 4,375 June 1 ,206 2,196 537 64 197 529 721 4,064 1,331 July 500 n.a. 300 . 950 800 485 __.fi/Aug.— 1 . 2 , 8 5 . 0 . . 1*400Other issuers are extractive, railroad and other transportation, real estate and finance, and commercial and other. Source: Securities and Exchange Commission. Quarterly supplements are avail- 273 405 218 1,622 350 1,367 1,489 1,897 1,192 1.215 1970 - II III IV IV 1971 - I II 1 • TABLE 6: Large Long-term Public Security Issues for N e w Capital x (Other than U.S. Treasury)1 ISSUER TYPE 2 Corporate Vepco Kentucky Utilities Co Chrysler Finance Corp Joseph E. Seagram & Son Vepco Tidewater Marine Service Colwell Mtg Trst. Public Serv Co. of N. Mexico Median Mortgage Investors San Diego Gas & Elec Co. Cincinnati Gas & Elec Co Southwestern Bell Tel Southwestern Bell7 Tel Central Illinois Pub Service Co Hall Craft Homes Inc. Central Tel Co. Iowa Pub Service Co Tucson Gas & Elec Central Illinois Light Co. Mobil Oil Corp Essex International Inc. 1st mtg 1st mtg debs debs Com stk debs debs 1st mtg debs ^ bonds com stk debs notes 1st mtg conv debs 1st mtg 1st mtg 1st mtg 1st mtg debs debs AMOUNT (MILLIONS OF DOLLARS) 50.0 35.0 60.0 50.0 80.0 15.0 15.0 20.0 20.0 45.0 36.5 125.0 75.0 22.5 15.0 25.0 15.0 25.0 30.0 200.0 50.0 COUPON RATH OR NET INTEREST COST MATURITY 2001 2001 1991 1996 7.50 7.62 8.35 7.75 1991 1991 2001 1981 2001 5.1(5 8.13 7.00 8.00 — < 2009 1978 2001 1996 1996 2001 2001 2001 2001 1996 7.47 7.45 8.35 7.75 5.75 6.50 8.15 7.00 7.96 —- —— 7.75 7.06 7.88 5.75 8.00 7,82 6.95 7.75 5.75 8.00 8.05 8.13 7.85 7.38 5.38 — •" i V OFFER- MOODY'S • RATING ING YIELD 8.13 7.88 7.38 5.38 Aa A Ba A —— Aa M* Aaa Aaa Aa •» — Aa A A Aa Aaa Ba TABLE 6: Large Long-term Public Security Issues for New Capital (continued) (Other than U.S. Treasury)1 AMOUNT (MILLIONS OF DOLLARS) ISSUER MATURITY COUPON RATE OR NET INTEREST COST Sept 1 thru Sept .17. 1971 OFFERIVX. YIELD MOODY'S RATING State and Local Puerto Rico Aqueducts & Swr Auth Rev bonds 11.0 Puerto Rico Aqueducts & Swr Auth Bonds 16.0 Middlesex Co. N.J. Bonds 12.3 Onondaga Co., N.Y. G.O. 12.9 New Jersey, State of G.O. 75.0 California, State of G.O. 100.0 Arlington Co., Va GXO. 20.0 Mississippi, State of G.O. 20.0 Chatam Co., Dev Auth., Ga G.O. 11.0 Brookline, Mass., Co. G.O. \ 10.2 Norfolk Port & Industrial Auth Rev. 26.5 New York State Pwr Auth Rev. 98.0 New York State Pwr Auth Rev. 22.0 Massachusetts Health & Ed Fac. Rev. 1.8 Massachusetts Health & Ed Fac. Rev.. . 5.4 Massachusetts Health & Ed Fac. Rev. 3.8 1973-1997 2004 1972-1988 1972-2001 1975-2001 1972-1991 1973-1992 1977-1991 1972-1985 1977-1998 2010 1986-1995 1993 1975-1988 2004 . 6,.01 6 .01 4,.66 4,.46 4,.61 4. 89 3,,40-5,.90 6,.10 3,,00-5,.00 2,,75-5,.00 3.,40-5,,40 2,,85-5,.10 3.,30-5,.60 3. 75-5. 04 A A Aa Aaa Aaa Aa A-l 6, 80 5.,88 5.,88 6, 13 6.,19 6. 38 3. 10-4.,70 5i 20-7. 20 5. 88 5. 10-5. 60 6. 13 4.,10-5.,75 6. 38 Aaa Baa --- 1 --- | 1 Other Farmers Home Admin Notes 300.0 1986 7.,50 7. 50 Farmers Home Admin Notes 149.9 1976 6.,63 6. 63 F.N.M.A. 250.0 1996 4,,38 4, 38 Hights oftoring. 1 Includes corporate and other security offerings of $15 million and ovv State and local security offerings of $10 million and over. In case of State and local government securities, G.O. denotes generaI oh 1 i •<ev.-Ut., revenue obligations secured only by income from public uti'li ties; Rev.-Q.-Ut., revenue bonds secured only by income from quasi-utilit.ivs ; Rev . - S . T . , revenue bonds secured by revenue frofm specific taxes only; Rev.-Rent., bonds secured solely by lease payments. Includes foreign government and International Bank for Reconstruction Development issues and non-qu^ranteed issues by Federal Agencies. 10 TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury)1 (continued) As o f S e p t 17y ISSUER TYPE AMOUNT (MILLIONS OF DOLLARS) APPROXIMATE DATE OF OFFERING Corporate Southern Calif Edison Gen'l Tel & Elec. • Columbia Gas System Inc Gen'l Motors Accept Corp Union Elec Co Quebec Hydro-Elec Comm Vermont Yankee Nuclear Bar Corp Consolidated Natural Gas Cenco Instrument Corp Bank of California Instrument Systems Corp Continental Can Co Genstar Ltd Valu Vend Credit Corp Cleveland Elec 111 Monumental Corp Beneficial Corp Beneficial Corp Microdot Inc. Central Tel & Util Corp General Tel Co of the S.E. Equimark Corp C & P Tel Co of Md General American Trans Corp Westinghouse Credit Corp Tenneco Inc Ohio Bell Tel Co Gen'l Tel Co of the S.W. Florida Pwr Co Pacific Pwr & Light Co Carolina Tel & Tel EMC Corporation Combustion Engr Inc. 1st ref mtg Conv debs Debs Debs Bonds Debs Bonds Debs Debs Conv debs Debs Notes Debs Debs Com stk Notes Bonds Bonds Notes 1st mtg Bonds Debs Debs Equip Trst Ctfs S.F. debs 1st mtg pipeline Debs Bonds 1st mtg 1st mtg Debs Debs S.F. debs __ 1 9 7 1 100.0 25.0 60.0 200.0 60.0 75.0 15.0 25.0 30.0 20.0 25.0 60.0 25.0 25.0 50.0 20.0 25.0 50.0 20.0 20.0 40.0 15.0 100.0 50.0 40.0 September September September September September September September September September September September September September September September September September September September September September September September September September 20 22 22 22 22 22 23 30 100.0 150.0 40.0 50.0 35.0 20.0 75.0 50.0 October October October October October October October October 5 5 6 12 12 TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury)1 (continued) AA<S s Of S e n t 17. 1971 AMOUNT (MILLIONS APPROXIMATE DATE OF ISSUER TYPE OF OFFERING DOLLARS) State and Local Baltimore Co Honolulu, Hawaii Pittsburgh S/D, Pa^ Georgia Education Auth Port of Tacoma, Wash Atlanta, Ga. Tennessee, State of Penna, State of New York, N. Y» Birmingham, Ala Beaumont, Texas Westchester Co., N.Y. 'Durham Co., N.C. Suffolk Co., N.Y. ;Chicago Pub Bldg Comm., 111 :Kentucky Turnpike, Auth |Buffalo, N.Y. ; Montgomery Co., Md 'Sacramento MUD, Calif ;Guilford Co., N.C. 1 G.O'. G.O. G.O. Rev. Rev. Rev. G.O. G.O. G.O. G.O. G.O. G.O. G.O. G.O. Rev. Rev. G.O. G.O. Rev. G.O. 30.0 30.0 15.0 15.7 15.7 32.0 45.0 50.0 344.9 18.3 11.0 35.9 10.7 19.0 25.0 85.0 19.5 30.0 50.0 10.0 September 21 September 21 September 21 September 21 September 23 September 28 September 28 September 28 September 28 September 28 September 28 September 28 September 28 September 30 October 5 October 6 October 7 October 14 October 27 November 9 Debs Bonds 21.0 258.2 September September Other iMunicipal Finance Auth of ; British Col. HDD * 1 2 20 29 Included in table for first time. . ~ . ~ Includes corporate and other issues of $15 million and over; State and local Government issues of $10 million and over. Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues of Federal Agencies. 12 Table 8 STOCK PRICES AND VOLUME STOCK P R I C E S 1 - TRADING V O L U M E 2 ' DATE NYSE INDEX 3 " D J . INDUSTRIALS AMEX * NYSE AMEX 1969 - High , Low 50.32 (5/14) 49.31 (7/29) 968.85 (5/14) 32.91 (1/3) 769.93 (12/17 ,25.02 (7/29) 16.5 (3/29) 8.6 (8/29) 8.0 3.6 (1/31) (11/21] 1970 - High Low 52.36 (1/5) 37.69 (5/26) 842.00 (12/29 27.02 (1/8) 631.16 (5/26) 19.36 (5/27) 18.5 (12/4) 7.8 (8/14) 7.1 1.8 (1/2) (8/14) 1971 - High Low 57.76 (4/28) 48.73 (1/4) 950.82 (4/28) 26.68 (4/28) 830.57 (1/4) 22.72 (1/4) 22.1 (2/12) 11.0 (8/13) 6.7 2.7 (2/12) (8/13) 52.07 52.88 54.38 55.52 850.61 856.02 880.91 908.15 24.37 24.59 25.13 25.27 12.5 11.0 21.1 15.3 3.0 2.7 5.1 3.5 3 55.66 10 55.56 17 55.24 912.75 911.00 908.22 25.61 25.66 25.59 11.4 14.6 10.8 3.1 3.3 3.2 1971 - Aug. Sept 6 13 20 27 1. Figures other than highs and lows are Fridays only. Highs and lows are for the year and are not necessarily for Fridays. 2. NYSE is the New York Stock Exchange; AMEX is the American Stock Exchange. Volume figures are daily averaged for the entire week, (millions of shares). Trading is normally conducted for 5-1/2 hours per day and 5 days per week, or In recent years, however abbreviated trading to the extent, and over the time Hours/ Days/ From Through; Day Week January 3, 1969 July 7, 1969 January 2, 1970 July 3, 1969 December 31, 1969 May 1, 1970 3. 12/31/65 = 5 0 4. Average dollar value of shares listed. 4 4-1/2 5 / 5 5 5 27-1/2 hours per week. periods, shown below: Hours/ Week 20 22-1/2 25 13 TABLE 9: Security Credit ' END OF PERIOE CREDIT EXTENDED TO MARGIN CUSTOMERS BY: BROKERS 1 J BANKS 2 | TOTAL •NET CREDIT 1 ,CUSTOMERS 1 ! CUSTOMERS' NET|EXTENDED BY ! NET DEBIT I FREE CREDIT 1 BROKERS^AND BALANCES 1 i DEALERS 3 BALANCES Outstanding: 1970 3,800 July 3,810 Aug. Sept. .3,920 Oct. .4,010 Nov. 4,010 Dec. .4,030 .1971 - Jan. Feb. Mar. Apr. •May June July Change- in Outstanding 1970 July Aug. Sept. Oct. Nov. Dec. 1971 - Jan. Feb. Mar. Apr. May June July 1 2 3 4 5 2,290 2,300 2,330 2,270 2,320 2,330 6,090 6,110 6,250 6,280 6,330 6,360 (4) (4) (4) (4) (4) (4) (5)2,180 2,083 2,236 2,163 2,197 2,286 (4) (4) (4) (4) (4) (4) 4,000 4,090 4,300 4,530 4,620 4,720 4,790 2,300 2,330 2,360 2,340 2,340 2,390 2,420 6,300 6,420 6,660 6,870 6,960 7,110 7,210 (4) (4) (4) (4) (4) (4) (4) 2,452 2,743 2,798 2,660 2,550 2,440 2,210 (4) (4) (4) (4) (4) (4) (4) - 60 10 110 90 20 - 10 30 - 60 50 10 - 60 20 140 30 50 30 - 30 90 210 230 90 100 70 - 30 30 30 - 20 - 50 30 - 60; 120 240 210 90 150 100 - - -r . - - — - — — - - - - • — — — — — — 171 97 153 - 73 34 89 166 291 55 -138 -110 110 230 - V ' - - - - - - - - - - - — •. - - • Margin debt, as reported by the-New York Stock Exchange. Although margin debt until March 1968 included loans secured by U.S. governments, the amount of such loans included is thought to have been small. "Bank loans to others than brokers and dealers for purchasing or carrying securities other than U.S. governments." The difference between customers' net debit balances and customers' net free credit balances, this figure represents the net credit extended by brokers and dealers to the nonfinancial public. NOTE: With the exception of bank loan data, figures are supplied by the New York Stock Exchange and are end of month data. Bank loans are for weekly reporting large commercial banks. Broker data includes loans for regulated securities; bank data includes loans for the purpose of purchasing or carrying any security, whether regulated or not. Series discontinued. Changes in series. TABLE 10: Savings Flows at Nonbank Depositary Intermediaries ($ millions) DATE '• V 1968 1969 1970 1970 - June July August 1971 - June r/ July £/ August ]>/ MUTUAL SAVINGS BANKS REGULAR DEPOSITS 3 NET ANNUAL NEW MONEY 2 GROWTH NET 1 FLOW RATE SAVINGS & LOAN ASSOCIATIONS SHARE CAPITAL NET ANNUAL NEW NET GROWTH MONEY 2 1 FLOW RATE 4,203 2,549 4,466 7.0 4.0 6.7 1,143 -763 936 7,432 4,200 11,173 504 297 176 —-- -133 174 \ 81 1,801 543 550 TOTAL DEPOSITS ANNUAL NET GROWTH RATE 1 FLOW NET NEW MONEY 2 Not Seasonally Adjusted 935 416 . 300 — — — -- / 1 2 7 7 276 200 3,092 1,531 1,100 6.0 3.2 8.2 2,738 -1,003 5,295 11,635 6,749 15,639 280 485 511 2,305 840 726 — 1,275 1,438 4,027 1,981 1,400 -- —— -— —«. -— 6.3 3.4 7.7 — — 3,881 -1,766 6,231 147 659 592 1,552 1,714 n.a. Seasonally Adjusted —m __ —— 1971 - January 916 15.5 29.8 3,619 4,535 25.1 — February 946 —— -15.8 2,472 19.8 3,418 18.5 —— 21.2 March 1,287 26.7 3,376 4,663 24.9 --— April 1,176 19.0 23.1 2,997 21.8 4,173 w — —— 12.6 May 795 1,996 15.1 2,791 14.3 —— —— —— June r/ 818 12.9 2,152 16.1 2,970 15.1 --—— 566 8.8 2,578 19.0 July 2/ 3,144 15.8 — —m 6.6 9.3 Aueust d/ 1 425 1.276 8.4 1.701 1 Annual growth rate for monthly data is the annualized monthly percentage increase in deposits. 2 Net New Money is new deposits net of both withdrawals and interest. Data for S&Ls are for insured associations only, which represent 96% of industry total resources. 3 Regular deposits at mutual savings banks exclude items such as Christmas club and certain escrow accounts, which represent a very small part of total deposits. SOURCE: National Association of Mutual Savings Banks and Federal Home Loan Bank Board. * /. 15 TABLE 11: Mortgage Commitments at Selected Thrift Institutions DATE TOTAL OUTSTANDING COMMITMENTS ALL MUTUAL SAVINGS SAVINGS & BANKS LOAN (N.Y. STATE) ASSOCIATIONS TOTAL NET CHANGE ALL SAVINGS & LOAN ASSOCIATIONS MUTUAL SAVINGS BANKS (N.Y. STATE) (Billions of Dollars, Seasonally Adjusted) 1./ 1970 - Aug. Sept. Oct. Nov. Dec. 1971 - Jan. Feb. Mar. Apr. May r/ June July 9.8 8.9 9.3 9.6 6.8 10.4 8.3 8.9 10.1 7.1 7.5 7.8 8.1 11.2 12.6 10.1 16.3 13.0 13.2 S:W 16.1 2.0 1.8 1.8 1.8 2.0 .21 .25 .30 .35 .51 .29 .36 .37 .34 .28 -.08 -.11 -.07 .01 .23 2.1 2.3 2.5 2.8 3.1 3.1 3.1 .25 .80 1.36 1.30 1.56 .77 .24 .20 .60 1.16 1.01 1.21 .72 .05 .20 .20 .29 .34 .05 .02 •2!2 Based on data from Federal Home Loan Bank Board and Savings Banks Associations of New York State. Data for savings banks and S&L's include a minor amount of nonresidential commitments. S&L commitments include loans in process. Net changes are derived directly from unrounded outstandings levels as reported and after seasonal adjustment by Federal Reserve. Subtotals may not add to totals because of rounding. 16 TABLE 12: Net Change in Mortgage Holdings DATE TOTAL INCLUDING FNMA-GNMA FINANCIAL INSTITUTIONS MUTUAL SAVINGS & SAVINGS COMMERCIAL LOAN BANKS BANKS ASSOC. TOTAL LIFE INSURANCE COMPANIES FNMA-GNMA Not Seasonally Adiusted 20,016 23,781 24,189 21,822 18,219 21,273 19,814 16,913 4,639 6,677 5,404 2,462 3,153 2,787 2,682 1,845 7,520 9,350 9,676 10,288 2,907 2,459 2,052 2,31a 1,797 2,508 4,375 4,909 July 1,548 2,136 2,089 1,170 1,739 1,626 125 187 200 144 209 160 723 1,140 1,079 178 203 187 378 397 463 1971 - May J une July 3,154 4,444 n.a. 3,204 4,311 n.a. 700 1,200 900 303 435 389 2,185 2,693 2,479 16 -17 -50 133 n.a. 789 1,055 983 1,104 1,175 1,289 1,710 1,311 1,425 1,774 2,044 2,095 2,339 2,452 222 213 83 151 200 131 232 24 97 154 38 25 23 468 508 408 364 320 229 100 -33 -87 -8 -79 7 1967 1968 1969 1970 E./ 1970 - May Seasonally Adiusted June July Aug. Sept. Oct. Nov. Dec. 1971 - Jan. Feb. Mar. Apr. May 1,749 2,083 1,917 2,192 2,128 2,049 2,604 1,860 1,997 2,888 2,739 3,080 4,077 July 1,281 1,575 1,509 1,828 1,808 1,820 2,504 1,893 2,084 2,896 2,818 3,073 3,872 81 165 268 328 295 224 312 383 345 588 453 640 1,097 869 189 142 175 245 138 176 250 175 217 380 283 313 413 373 n.a. J 205 to Call Report data on real estate loans outstanding as available. Other data derived from mortgage debt outstanding as reported separately by National Assn. of Mutual Savings Banks, Federal Home Loan Bank Board, Institute of Life Insurance and, through August 1968, the Federal National Mortgage Association, and thereafter by FNMA and the Government National Mortgage Association. Data for mutual savings banks and for Life Insurance companies may differ somewhat from those derived from regular quarterly series because of minor conceptual differences for ; which adjustments are not made in the monthly series. Altogether, these groups accounted for 84 per cent of the net increase estimated for all holders in 1970. : 17 TABLE 13: Net Increases in Mortgage Debt Outstanding Billions of dollars, SAAR QUARTER TOTAL RESIDENTIAL3 l-^ to 4FAMILY MULTIFAMILY COMMERCIAL MULTI-AND COMMERCIAL FARM 1966 - II IV 18.6 15.1 10.9 9.1 8.3 7.0 2.6 2.1 5.5 4.1 8.2 6.0 2.2 1.8 1967 - I II III IV 15.9 20.7 26.6 27.3 10.3 13.9 19.2 19.8 7.0 10.5 15.3 16.0 3.3 3.4 3.9 3.8 3.9 5.0 4.9 4.8 7.3 8.4 8.8 8.4 1.8 1.8 2.5 2.8 1968 - I II III IV 27.7 26.2 26.0 29.6 19.0 18.2 17.7 20.2 15.8 15.0 14.1 16.4 3.1 3.2 3.4 3.8 6.4 5.9 6.5 7.5 9.4 9.2 10.2 11.1 2.3 2.2 1.8 1.8 1969 - I II III IV 31.3 28.9 26.5 25.1 25.0 21.5 19.3 18.3 18.6 16.8 14.6 13.0 4.4 4.7 4.7 5.3 6.2 5.2 5-3 5.4 10.4 10.1 10.0 10.7 2.2 2.2 1970 - I II III IV 20.2 22.7 28.5 30.5 13.8 16.9 21.2 21.6 8.8 11.5 14.9 15.1 5.0 5.4 6.3 6.4 4.9 4.3 5.2 6.9 9.9 9.7 11.5 13.3 1.5 1.5 2.1 2.1 1971 - Ip 32.9 22.6 15.6 7.0 8.3 15.3 2.0 H 1.4 1 Derived from data on mortgage debt outstanding from Federal Deposit Insurance Corporation, Federal Home Loan Bank Board, Institute of Life Insurance, National Association of Mutual Savings Banks, Departments of Commerce and Agriculture, Federal National Mortgage Association, Federal Housing Administration, Veterans Administration and Comptroller of the Currency. Separation of nonfarm mortgage debt by type of property, where not available, and interpolation® and extrapolations, where required, estimated mainly by Federal Reserve. 2 May differ somewhat from related flow of funds series mainly because of more aggregative type of seasonal adjustment. 3 Residential mortgage debt includes nonfarm only and is sum of 1-to 4- family and multifamily mortgage debt combined. TABLE 14: FNMA "Auction" Results WEEK ENDED Apr. 12 26 COMMITMENTS IN $ MILLIONS IMPLICIT YIELD2(per cent) ACCEPTED 1-YEARll 901-YEAR 1 TOTAL 90TOTAL 66OFFERED & OVER MONTH & OVER DAY DAY M0NTH 126.9 687.2 54.5 313.9 39.8 154.0 9.4 126.6 5.4 33.4 7.32 7.43 7.45 7.54 7.53 7.57 May 10 24 1,168.0 785.7 236.8 151.6 145.8 44. 6 71.3 84.4 19.7 22.6 7.57 7.95 7.68 7.97 7.74 8.03 June 1 14 28 322.4 664.4 539.3 146.6 191.2 262.2 77.1 133.7 191.8i 57.8 47.3 60.3 11.6 10.2 10.4 8.05 7.91 7.92 8.18 8.15 8.22 8.16 8.22 8.28 July 12 26 606.0 686.2 241.1 183.4 161.8 183.4 58.2 21.1 7.98 8.07 8.23 8 : 31 Aug. 25 634.6 153.5 153.5 Sept. 7 445.2 188.6 188.6 — 7.97 -- — 7.88 -- — Note: Under the FNMA auction system, approved sellers of Governmentunderwritten mortgages bid for FNMA forward purchase commitments. Bids accepted by FNMA are for delivery at the seller's option, and at any time within ^he specified period. Bids on proposed homes relate to construction^ not yet started on which mortgages may be delivered only after completion and occupanc/. 1 For "proposed construction" of new homes only. 2 Average secondary market yield after allowance for commitment fee and required purchase and holding of FNMA stock, assuming prepayment of 15 years for 30-year Government-underwritten mortgages. Yields shown are gross, before deduction of 38 basis points fee paid by investors to servicers. 19 TABLE 15: Private Housing Starts and Permits STARTS SEASONALLY ADJUSTED ANNUAL RATE TOTAL 1-FAMILY 1970 - June July Aug. Sept. Oct. Nov. Dec. 1,393 1,603 1,425 1,509 1^583 1,693 2,054 835 82f 838 881 890 934 1,240 558 776 587 627 693 759 814 TOTAL 135.2 140.8 128.7 130.9 140.9 126.9 121.4 UNADJUSTED TYPE OF FINANCING FHA VA OTHER 40.7 43.3 34.1 34.3 40.4 33.7 63.2 5.1 5.3 5.6 5.3 5.8 5.5 5.7 89.4 92.1 87.7 91.3 94.7 87.2 52.5 BUILDING PERMITS (SEASONALLY ADJUSTED ANNUAL RATE) 2 1,285 1,309 1,378 1,388 1,523 1,487 1,768 1,635 32.2 4.6 72.8 110.6 779 946 1,725 1971 - Jan. 1,563 102.2 27.3 4.7 68.4 769 985 1,754 Feb. 1,627 127.6 33.4 6.9 167.9 911 1,959 1,048 Mar. 1,638 814 201.1 44.6 8.5 148.0 1,912 1,098 Apr. 1,927 ~ 975 1,124 851 198.5 40.7 8.4 149.4 May823 193.8 46.1 9.3 137.8 1,849 |2,000 1.177 June 142.6 42.0 9.3 1,037 2,052 193.2 July £/ ,215 1.178 2,008 201.4 1,007 ,228 1,221 May g/ Total starts are Census estimates including farm for both permit-issuing and nou-issuing areas. A dwelling unit is started when excavation begins; all units in an apartment structure are considered started at that time. FHA and VA starts are units started under commitments by these agencies to insure or guarantee the mortgages. As reported by FHA and VA, a unit is started when a field office receives the first compliance inspection report, which is made before footings are poured in some cases but normally after the foundations have been completed. Other starts are derived as a residual, although total and FHA and VA starts are not strictly comparable in concept or timing; other starts include both units financed by conventional mortgages and units without mortgages. Building permits are for 13,000, or all known permit-issuing places. Unlike starts, seasonally adjusted building permits reflect direct adjustment for differences in the number of working days per month, as well as other differences^in timing and coverage. 2o TABLE 16: Mortgage and Bond Yields FHA MORTGAGES DATE ! I 30-year 2 CONVENTIONAL MORTGAGES 3 SPREAD BETWEEN YIELDS ON CONV. & FHA MORTGAGES 5 1 NEW Aaa CORPORATE BONDS 4 SPREAD BETWEEN YIELDS ON NEW CORPORATE BONDS AND FHA MORTGAGES 6 1968 - High Low 1969 - High Low 7.52 6.78 8.62 7.99 7.40 6.75 8.35 7.55 .02 -.27 -.13 -.40 6.79 6.15 8.75 6.91 1.20 .26 1.08 -.13 1970 - High Low 9.29 8.40 8.60 8.30 -.10 -.74 9.11 7.80 .99 .01 1971 - Jan. Feb. Mar. Apr. May June July —— 7.95 7. 75 7.60 7.55 7.65 7.70 7.80 7.24 7.28 7.46 7.57 8.01 7.90 7.96 n.a. 1 2 3 4 5 6 —— 7.32 7.37 7.75 7.89 7.97 n. a. .28 .18 -.10 -.19 -17 -.14 -.20 -.26 -.01 .01 Neither mortgage nor bond yields include allowance for servicing costs which are much higher for mortgages than for bonds. Generally, bonds pay interest semiannually; mortgages, monthly. Mortgage yields, if computed as equivalent to -a semi-annual interest investment, would be slightly higher than given in the table. Based on FHA-field-office opinions about average bid prices in the private secondary market for new-home mortgages for immediate delivery. Data shown are for 30-year mortgages with minimum downpayments, and weighted by probable volume of transactions. Yields computed by FHA, assuming prepayment period of 15 years for 30-year mortgages. Based on FHA-field-office opinion on typical interest rates (rounded) on conventional first mortgages prevailing in the market areas of insuring office cities See note for Table 1. ' # Yield spread equals conventional mortgage rate less FHA secondary market yield. Yield spread equals FHA secondary market yield less new Aaa corporate bond yield. TABLE 17: Conventional Mortgage Terms DATE_ NEW HOMES CON- FEES & TRACT CHARGES EFFEC- MATURITY ' (YEARS) (PER TIVE RATE CENT) RATE (PER 3 CENT) 2 LOAN/ PRICE LOAN RATIO AMT. (PER ($000) CENT) 4 1 EXISTING HOMES LOAN/ CON- FEES & EFFECMATU- PRICE TRACT CHARGES RITY RATIO RATE , (PER TIVE CENT) RATE (YEARS) (PER (PER CENT) CENT) 2 3 LOAN AMT. ($000) 4 1970 July Aug. Sept. Oct. Nov. Dec. 1971 Jan. Feb. Mar. Apr. MayJuly 8,. 3 2 8,.35 8.. 3 1 8,.33 8,.26 8.. 2 0 1.01 0.98 1.03 1.05 0.99 1.07 8.49 8.52 8.48 8.51 8.43 8.38 25. . 1 24.8 25. .2 25. . 1 25. .3 25. .8 71,.5 71..6 72,.7 72.. 4 72..1 73. .8 24. .9 25. .5 25. .3 24.8 25. .2 25. .8 8.21 8.25 8.27 8.20 8.18 8.12 0.95 0.89 0.88 0.88 0.85 0.85 8, .37 8.. 4 1 8, .42 8..35 8..32 8. .26 23.1 23 1 22.8 22.8 22.7 23.3 71..5 71..5 ,71..7 71. .5 71. .5 71, .9 21.7 21.4 21.0 20.5 21.1 21.7 8.,03 7.. 7 4 7..52 7, ,37 7.36 7..38 7,. 5 1 0.92 1.00 0.83 0.73 0.71 0.74 0.88 8.18 7.91 7.66 7.49 7.47 7.50 7.65 25. .8 26. ,2 25. ,9 26. .3 26. 1 26. 3 26. .2 73. .3 73. .9 73. .7 73. .6 74. ,0 73. • 7 74.3 26. , 4 26. ,2 26. 0 26. 2 26. 7 27. 2 27. .1 7.94 7.67 7.47 7.34 7.33 7.38 7.50 0.82 0.79 0.77 0.75 0.71 0.74 0.73 8. .08 7.,80 7.60 7..47 7. 45 7. 50 7.,62 23.5 24.0 24.1 24.2 24.0 24.3 24.2 72..5 73..1 73. .5 73. .6 73. ,2 73. 9 74. . 4 22.0 22.5 23.0 23.1 23.3 28.9 23.3 __ '1 Compiled by Federal Home Loan Bank Board in cooperation with Federal Deposit Insurance Corporation. Data are'weighted averages based on probability sample survey of characteristics of conventional first mortgages originated by major institutional lender groups (including mortgage companies) for purchase of single family homes. Data exclude loans for refinancing, reconditioning or modernization; construction loans to home-builders; and permanent loans which are coupled with construction loans to ownerbuilders. Related series on conventional mortgage rates only,ibased on unweighted opinions of field-office directors of the Federal Housing Administration, are available somewhat sooner than the results of the FHLBB-FDIC survey, and are included-in the case of new home mortgage rates--in Table 16. .2 Fees and charges-expressed as a percentage of the principal mortgage amount-include loan commissions, fees, discounts, and other charges which provide added income to the lender and are paid by the borrower. They exclude any closing costs related solely to transfer of property ownership. 3 Includes fees & charges amortized over a 10 year period in addition to the contract interest rate. 4 Derived by FRB.
@FedFRASER