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Old 07-18-2009, 04:33 AM
 
Location: Backwoods of Maine
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Last night, Friday July 17, 4 more banks were closed by the FDIC:

Temecula Valley Bank (CA)
Vineyard Bank (CA)
BankFirst (SD)
First Piedmont Bank (GA)

FDIC's Sheila Bair has been quoted as saying that up to 500 more banks could fail:

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200907161103dowjonesdjonline000 753$title=us-sen-bunning-fdics-bair-said-up-to-500-more-banks-could-fail (broken link)

At this rate, we may not have any more banks left. Now, if we could just find a way to get rid of the banksters...
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Old 07-18-2009, 05:53 AM
 
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the FDIC response has been this:
FDIC last week approved a one-time “emergency” fee and other assessment increases on the industry to rebuild a fund to repay customers for deposits of as much as $250,000 when a bank fails. The fees, opposed by the industry, may generate $27 billion this year after the fund fell to $18.9 billion in the fourth quarter from $34.6 billion in the previous period, the FDIC said.

The fund, which lost $33.5 billion in 2008, was drained by 25 bank failures last year. Sixteen banks have failed so far this year, further straining the fund.

Smaller banks are outraged over the one-time fee, which could wipe out 50 percent to 100 percent of a bank’s 2009 earnings, Camden Fine, president of the Independent Community Bankers of America, said yesterday in a telephone interview.

Last edited by floridasandy; 07-18-2009 at 06:02 AM..
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Old 07-18-2009, 06:08 AM
 
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bank failures so far this year:

Temecula Valley Bank Temecula CA
Vineyard Bank Rancho Cucamonga CA
BankFirst Sioux Falls SD
First Piedmont Bank Winder GA
Bank of Wyoming Thermopolis WY
Founders Bank Worth IL
Millennium State Bank of Texas Dallas TX
First National Bank of Danville Danville IL
Elizabeth State Bank Elizabeth IL
Rock River Bank Oregon IL
First State Bank of Winchester Winchester IL
John Warner Bank Clinton IL
Mirae Bank Los Angeles CA
MetroPacific Bank Irvine CA
Horizon Bank Pine City MN
Neighborhood Community Bank Newnan GA
Community Bank of West Georgia Villa Rica GA
First National Bank of Anthony Anthony KS
Cooperative Bank Wilmington NC
Southern Community Bank Fayetteville GA
Bank of Lincolnwood Lincolnwood IL
Citizens National Bank Macomb IL
Strategic Capital Bank Champaign IL
BankUnited, FSB Coral Gables FL
Westsound Bank Bremerton WA
America West Bank Layton UT
Citizens Community Bank Ridgewood NJ
Silverton Bank, NA Atlanta GA
First Bank of Idaho Ketchum ID
First Bank of Beverly Hills Calabasas CA
Michigan Heritage Bank Farmington Hills MI
American Southern Bank Kennesaw GA
Great Basin Bank of Nevada Elko NV
American Sterling Bank Sugar Creek MO
New Frontier Bank Greeley CO
Cape Fear Bank Wilmington NC
Omni National Bank Atlanta GA
TeamBank, NA Paola KS
Colorado National Bank Colorado Springs CO
FirstCity Bank Stockbridge GA
Freedom Bank of Georgia Commerce GA
Security Savings Bank Henderson NV
Heritage Community Bank Glenwood IL
Silver Falls Bank Silverton OR
Pinnacle Bank of Oregon Beaverton OR
Corn Belt Bank & Trust Co. Pittsfield IL
Riverside Bank of the Gulf Coast Cape Coral FL
Sherman County Bank Loup City NE
County Bank Merced CA
Alliance Bank Culver City CA
FirstBank Financial Services McDonough GA
Ocala National Bank Ocala FL
Suburban FSB Crofton MD
MagnetBank Salt Lake City UT
1st Centennial Bank Redlands CA
Bank of Clark County Vancouver WA
National Bank of Commerce Berkeley CA

it is interesting to note that bank failures have gone up in the last 2 months compared to the prior months this year (except february with 9 failures), and this month has had the highest bank failure rate - with 12 banks failing so far this month.

Last edited by floridasandy; 07-18-2009 at 07:23 AM..
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Old 07-18-2009, 09:26 AM
 
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57 banks failing isn't that big of a deal especially since all have been tiny. Even 500 isn't that big. During the 80's more than 100 banks failed every year and several years in a row saw 300-500+ failures.

FDICFailures.jpg (image)

The truth is the banking system is flush with cash and the least of out problems at this point.

Btw, there are close to 10,000 banks in the country so it appears 95% of all banks will survive. Some of you are so dramatic
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Old 07-18-2009, 11:34 AM
 
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i think it would be a big deal if the FDIC ran out of money, unless that you are suggesting that isn't really true and the government is just not letting a good crisis go to waste again.
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Old 07-18-2009, 12:08 PM
 
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Quote:
Originally Posted by floridasandy View Post
i think it would be a big deal if the FDIC ran out of money, unless that you are suggesting that isn't really true and the government is just not letting a good crisis go to waste again.
I think it would be a big deal if the sun imploded or an astroid smashed into the earth and since both of those things are more likely to happen than the FDIC being allowed to go broke, perhaps this is no big deal in the overall scheme of things.
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Old 07-18-2009, 12:26 PM
 
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either bank failures are a big deal or sheila bair is lying:

Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative," Bair wrote in the letter to the chief executives of the nation's 8,305 federally insured banks and thrifts.
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Old 07-18-2009, 12:55 PM
 
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All she's saying is the banks have to cough up the money to cover the FDIC fund liabilities thats why she was addressing CEO of banks.

If they don't raise enough then they'll need more, doh! Do you really believe they are going to let depositors lose money? Because after all thats happened, and the clear message from Washington that they will not let the banking system fail, there's really not much I can say that would alter your "the world is coming to an end" viewpoint.

Personally, I'm just happy they're letting these guys fail. I just wish they would have adopted this attitude back when AIG, WaMU, etc were on the block.

There are a lot of problems right now to be sure, but you're consistently a day late and a dollar short in your observations. Forclosures, for example, are good not bad. As are bankruptcies. The more the better right now. Because with each one there is a family whose balance sheet is fixed instantly. A family who is no longer in debt and can start rebuilding. Thats why trying to save the housing market is stupid. The faster it crashes out the better we'll all be.

As for banks. with each bank that goes down we as a whole are better off too as those assets get moved into stronger hands. With each failure there is one less weak link in the chain and the other links are made stronger.

With everyone leaning so hard to one side of the boat right now the smartest place to be is on the other side. Have you noticed that since "everyone" has become a financial expert and now clearly see's all the things that are wrong the market has rallied 50%, the dollar has stabalized, credit spreads have narrowed, etc? The time to be overly pessimistic and worried has passed.
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Old 07-18-2009, 02:13 PM
 
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sheila bair said the FDIC was going to fail without help and i would think she is in a better position to evaluate that than i am. it is interesting to note that the little banks are being allowed to fail, while the big banks are to be subsidized by the taxpayers with government picking the winners and losers.

you are looking at this from a wall street perspective and missing the bigger picture. the biggest value for most americans is not in wall street, but in their houses. as they come to appreciate that their homes have lost true substantial value, they will not feel as eager to go spending with the illusion of the housing cushion for retirement. since our economy is driven by the spending cycle, this will not mean good news to the overall health of the economy. i have to say that i am totally perplexed how you could see foreclosures and bankruptcies as a good thing. more foreclosures stall the building industry since there is a larger pool of housing and the housing prices stay down. bankruptcies may discharge debt but they also ruin credit and restrict lending, not to mention that they burn the merchants who are getting the short end of the bankruptcy.
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Old 07-18-2009, 03:02 PM
 
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Quote:
Originally Posted by floridasandy View Post
sheila bair said the FDIC was going to fail without help and i would think she is in a better position to evaluate that than i am. it is interesting to note that the little banks are being allowed to fail, while the big banks are to be subsidized by the taxpayers with government picking the winners and losers.

Bair never said the FDIC was going to fail. She said without rasing fee's on banks the FDIC would run out of money. When your a gov't backed agency running out of money and failing are not the same thing. There is no way the FDIC will be allowed to fail and anyone who thinks that is looney.

you are looking at this from a wall street perspective and missing the bigger picture. the biggest value for most americans is not in wall street, but in their houses. as they come to appreciate that their homes have lost true substantial value, they will not feel as eager to go spending with the illusion of the housing cushion for retirement. since our economy is driven by the spending cycle, this will not mean good news to the overall health of the economy.

No, I'm looking at this from the veiewpoint of how economies function. So people came to rely on their homes, so what? Now they get to learn a valuable lesson as do the generations just coming up(hopefully).

If you want the spending cycle to return then first you have to clean out the crap in the system; debt. Anyone in a house they can't afford needs to go. Period! Homes prices need to be allowed to fall to a realistic sustainable level. Which, btw, will be great for everyone who didn't screw up which is, what, 85% of the population? At that point buyers will come in and your spending cycle will start.

See the fact is the overwhelming majority of all homeowners are fine. They make their payments and their homes are worth more than they owe or even paid to begin with. Those who planned on gaming the system and cashing out for a big payday lose but most people don't fall into that catagory.


i have to say that i am totally perplexed how you could see foreclosures and bankruptcies as a good thing. more foreclosures stall the building industry since there is a larger pool of housing and the housing prices stay down. bankruptcies may discharge debt but they also ruin credit and restrict lending, not to mention that they burn the merchants who are getting the short end of the bankruptcy.
Your perplexed because you don't understand the basics of the economic cycle. As I explained already, once a person goes bankrupt they are free of the debt holding them down. They become consumers again. Why do you think we have bankruptcy laws to begin with?

As for foreclosures, again, this is just the cycle playing out. The foreclosures must happen and there is no way to avoid them. Anyone with an understanding of how markets work knows you cannot stop the unstoppable, but you can prolong the ineviatable which is exactly what we're doing.

As for the banks, well they get burned for making bad business decisions as do the merchants. Thats how it works in a capitalistic economy. Make good decision and get rewarded, make bad one's and get screwed.

In any event the time to have been worried was 3 years ago. Everyone see's the problems now, and quite frankly, most people are stupid about anything financial. What people should be doing now is looking for the opportunities that economic downturns create instead of trying to prevent or worry or complain about the natural cleansing process we need.

But, in same way people were headfaked into thinking housing prices could only go up and they could never see a day where homes lost value, the masses(inclusing the economists) are once again on the wrong side believing that since things are bad they will stay bad or get worse.

I'll bet the ranch things are better 2 years from now than they are today. I'm just upset we've wasted so much time trying to prop up a failed market.





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