Charting The Banking Crisis – A Boomerang Demo

| March 12, 2008

Money Burning In The Fires Of Deflation

Anyone who has been following the financial news knows that banks and other large financial institutions are under a growing amount of strain given the misguided investments in speculative ventures over the past 5 years, including mortgages and exotic credit / investment packages.

While chasing down what state a company like Merrill-Lynch might be tough, banks are required to report data to the FDIC. The bad news is you end up with a massive pile of tabular text data that makes for potent nap fuel. Readers will recall that my team has been working on new techniques for finding and presenting massive information sets, a technology based on mashups and the semantic web we call Boomerang.

We decided to apply the Boomerang approach to this mass of data, adding in some ideas from the groundbreaking gapmider.org effort to create a dynamic overview of just how tough it’s getting for banks and their mortgage portfolios.

Charts and data after the jump.

[Update – Henderson: Fixed some problems with the Flash charts and Internet Explorer]

First lets look at the top 8 banks and their mortgages that are 90+ days late. Below is a flash charting system, feel free to use the controls and experiment. We chart the total assets of the bank along the horizontal axis, the value of loans that go 90+ days late on the vertical, and the size of the circles represent the total loan portfolio for that bank. You can set the charts in motion by hitting the “Play” button and stop them at any time. Hovering over a circle will show you the value for that data point.

Our charts step forward in time for Q1-2002 one quarter at a time, reading directly from the bank’s own FDIC reports.

Bank Portfolios – 90+ Days Late

Some fascinating detail here, most notably Wells Fargo (my bank) seems to be the leader in holding onto 90+ Day late mortgages. Bank of America seems to be keeping things under control, while Washington Mutual seems to be having problems creeping up as well. Citibank takes a healthy jump in Q4 2005 and then keeps increasing slowly.

The take away from this chart is that most of the banks that we are showing are keeping their 90+ Day lates under control, at least up until the end of Q4 2007 (The last date we have data for thus far).

The picture is quite different if we take a look at loans that are charged off by these banks (recently referred to as “Write Downs”). Some notes to look out for: JPMorgan goes through several steep increase / decrease cycles as they buy smaller, weaker banks and clean up their balance sheets.

Again, feel free to use the controls and experiment. We chart the total assets of the bank along the horizontal axis, the number of loans that are written off as non-performing on the vertical, and the size of the circles represent the total loan portfolio for that bank. You can set the charts in motion by hitting the “Play” button and stop them at any time. Hovering over a circle will show you the value for that data point.

Bank Portfolios – Total Charged Off Mortgages


With the exception of JPMorgan’s action buying out weaker banks, everything stays calm until Q2 2007, when everything starts decaying in a hurry. Over the last half of 2007 Citibank, JPMorgan (Chase) and WaMu start exploding with non-performing mortgages. Bank of America seems to be keeping things reasonably under control, but you can clearly see the strain on the balance sheets for all the banks we are tracking.

The Bottom Line

The banks are under a growing amount of stress, but unless you are a hard core accountant or analyst, it can be tough to wade through the public data to figure it out. Tools like the trend animator provide a means to convey complex data sets in a manner that lets anyone recognize what is happening.

What is clear is the strain becomes quite serious in 2007, and is increasing rapidly towards the end of the year. Being a big bank does not seem to isolate you from crisis right now, as even some of the largest are facing increasing trouble.

Just where this ends is anyone’s guess. We are facing problems on multiple economic fronts at the same time, and our banks are likely to be the ones to show pain first. To be fair this chart does not show companies that are strict mortgage lenders, as they have no accountability to FDIC. Countrywide is an exception because they have their own bank.

Keep watching this space, we will work to bring you an update once the Q1 data is published.

Special thanks to Nathan Redding of the Boomerang team who coded the Flash charts

[Update – Henderson] If you really like these charts, you can work with a more robust version over at the Boomerang mothership – we have data for more banks, more kinds of trends we can show and lots of variations on the theme.

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Category: Credit Backlash, Economics, Information Technology, Main, Mashups, Visualizations

About the Author ()

Bruce Henderson is a former Marine who focuses custom data mining and visualization technologies on the economy and other disasters.

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