Banking Crisis II

Stuff that’s happening in the world that may pertain to our survival. Please keep political debates off the forum.

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Re: Banking Crisis II

Post by flyingredgoat » Fri Dec 18, 2009 6:13 am

TheGunslinger wrote:Doom Dooooom!

Times are tough, sure - but it's not even close to the end of the world as we know it. The US will cut services massively before it will allow itself to default on loans.

Defaulting on its obligations is one of the last things that it will do - there will be enormous pain before it corrects, but the federal government would probably not pay its public servants rather than allow the debt to go unrepaid.

Repaying debt has become paramount in the US government consciousness. It wasn't sexy or hip to think about it - now its all that ever gets talked about.

Pretty sure that it will start to get paid down as a priority.
I disagree. Debt has been discussed during election years. The masses forget soon enough. As for cutting services, our government will never shoot their chances at reelection like that. What usually happens is that the government just becomes less effective until it crumbles. :(

I suspect that it will be a really good idea to become a survivalist in the near future. That way you will be prepared for the slightly farther future of uncertain times. Then again, I'm preaching to the choir here.

Yes, I know that we are going through bad times with unemployment and the economy. It would have been really good to start prepping five years ago (for those that didn't). I'm just saying that it looks a little stormy in the future, and that as soon as the economy starts to recover it's time to prep.

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Re: Banking Crisis II

Post by Rock2Fox » Fri Dec 18, 2009 8:57 pm

5 more bite the dust:

http://finance.yahoo.com/news/Califs-Im ... et=&ccode=" onclick="window.open(this.href);return false;
WASHINGTON (AP) -- Regulators have shut down Imperial Capital Bank in La Jolla, Calif., bringing to 138 the number of U.S. banks brought down this year by the weak economy and mounting loan defaults.

The Federal Deposit Insurance Corp. has been appointed receiver of Imperial Capital, which has about $4 billion in total assets and $2.8 billion in deposits.

Los Angeles-based City National Bank has agreed to acquire all of the deposits of Imperial Capital, as well as $3.3 billion of the failed bank's assets.

Earlier Friday, regulators shut down banks in Alabama, Florida, Georgia, Michigan and Illinois.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) -- Regulators on Friday shut down banks in Alabama, Florida, Georgia, Illinois and Michigan, bringing to 138 the number of U.S. banks brought down this year by the weak economy and mounting loan defaults.

The Federal Deposit Insurance Corp. took over the five. Atlanta-based RockBridge Commercial Bank, with $294 million in assets and $291.7 million in deposits was shuttered, as was New South Federal Savings Bank, based in Irondale, Ala., with $1.5 billion in assets and $1.2 billion in deposits.

Also closing their doors were Citizens State Bank of New Baltimore, Mich., with $168.6 million in assets and $157.1 million in deposits; Peoples First Community Bank of Panama City, Fla., with $1.8 billion in assets and $1.7 billion in deposits; and Independent Bankers' Bank, based in Springfield, Ill. -- a sort of wholesale bank that provided services to 450 client banks in four states -- with $585.5 million in assets and $511.5 million in deposits.

Beal Bank, based in Plano, Texas, agreed to assume the assets and deposits of New South Federal Savings Bank, which only had one branch. Hancock Bank, based in Gulfport, Miss., agreed to assume the deposits and about $1.6 billion of the loans and other assets of Peoples First Community Bank. The FDIC will retain the rest for eventual sale.

The FDIC was unable to find a buyer for RockBridge Commercial Bank, so checks covering insured accounts will be mailed to retail depositors, the agency said.

For Independent Bankers' Bank, the FDIC set up a temporary "bridge bank," which the agency will operate as it continues to seek a buyer. The FDIC also set up a "bridge bank" for Citizens State Bank, which will continue to operate for about 45 days to allow customers access to their deposits and open accounts at other banks. It will be operated by Huntington National Bank of Columbus, Ohio, under a contract with the FDIC.

The FDIC estimates the failure of Citizens State Bank will cost the deposit insurance fund $76.6 million; the failure of New South Federal Savings Bank is expected to cost $212.3 million; that of Peoples First Community Bank $556.7 million; Independent Bankers' Bank, $68.4 million; and RockBridge Commercial Bank, $124.2 million.

RockBridge Commercial had about $2.1 million in deposits that exceeded the $250,000 per-account insured limit, an estimate likely to change after more information is gathered from customers, the agency said.

Depositors with funds that exceed the insured limits become essentially creditors of the failed bank. They will eventually recover some of their money, but the amount can range from 40 cents on the dollar up to the full amount. Recovery can take months.

RockBridge Commercial is the 25th Georgia-based bank to fail this year, more than in any other state. Independent Bankers' Bank was the 21st bank in Illinois to fail, and Peoples First Community Bank was the 14th bank in Florida.

As the economy has slumped, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have accelerated around the country.

The 138 bank failures are the most in a year since 1992 at the height of the savings-and-loan crisis. They have cost the government-backed deposit insurance fund -- which has fallen into the red -- more than $30 billion so far this year. The failures compare with 25 last year and three in 2007.

The FDIC expects the cost of bank failures to grow to about $100 billion over the next four years.

Banks have been hammered by failed real estate loans, both residential and commercial.

If the economic recovery falters, defaults on the high-risk loans could spike. Nearly $500 billion in commercial real estate loans are expected to come due annually over the next few years.

Last week, the Obama administration extended until next October the $700 billion financial bailout program, saying the fund was still needed to prevent further turmoil in the banking system. Treasury Secretary Timothy Geithner said extending the rescue program also will help homeowners struggling to avoid losing homes to foreclosure and small businesses having trouble getting loans.
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Re: Banking Crisis II

Post by raptor » Fri Dec 18, 2009 9:09 pm

Seven banks were closed today bringing the total to 140 banks closed YTD in 2009.

http://www.marketwatch.com/story/seven- ... _news_stmp" onclick="window.open(this.href);return false;

1) First Federal Bank of California
2) Imperial Capital Bank
3) Independent Bankers' Bank
4) New South Federal Savings Bank
5) Citizens State Bank
6) Peoples First Community Bank
7) RockBridge Commercial Bank

http://www.fdic.gov/bank/individual/fai ... klist.html" onclick="window.open(this.href);return false;

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Re: Banking Crisis II

Post by Heartless51 » Fri Dec 18, 2009 9:23 pm

TheGunslinger wrote:Doom Dooooom!

Times are tough, sure - but it's not even close to the end of the world as we know it. The US will cut services massively before it will allow itself to default on loans.

Defaulting on its obligations is one of the last things that it will do - there will be enormous pain before it corrects, but the federal government would probably not pay its public servants rather than allow the debt to go unrepaid.

Repaying debt has become paramount in the US government consciousness. It wasn't sexy or hip to think about it - now its all that ever gets talked about.

Pretty sure that it will start to get paid down as a priority.
Are we talking about the U.S. Federal government? Our current U.S. federal government?

Repaying debt has become so important that we are taking every opportunity to increase said debt.
Don't ask me for examples, you can find them easily enough. I would however love to see some examples of debt being paid back, or reduced even.

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Re: Banking Crisis II

Post by raptor » Sat Dec 19, 2009 12:43 pm

Heartless51 wrote: Are we talking about the U.S. Federal government? Our current U.S. federal government?

Repaying debt has become so important that we are taking every opportunity to increase said debt.
Don't ask me for examples, you can find them easily enough. I would however love to see some examples of debt being paid back, or reduced even.

This can get political very quickly so I am going the limit the discussion to news articles. The US government is starting to pay more lip service to reducing debt.

Here is an example:
http://phoenix.bizjournals.com/phoenix/ ... ily28.html" onclick="window.open(this.href);return false;

The ugly truth is that while saying the deficit and resulting debt should be reduced (lip service) the actions of the US governments tells another story.

http://www.upi.com/Top_News/US/2009/12/ ... 261004404/" onclick="window.open(this.href);return false;

However at some point in the near future I suspect that the debt will have to be reduced and rather quickly.

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Re: Banking Crisis II

Post by Chef » Sat Dec 19, 2009 3:19 pm

However at some point in the near future I suspect that the debt will have to be reduced and rather quickly.
Let us hope this will not be linked to the population being reduced and rather quickly.
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Re: Banking Crisis II

Post by Moana Drifter » Sat Dec 19, 2009 4:54 pm

Actually, the ability to repay the debt is moot, it's the ability to cover the interest payments that is the issue.
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Re: Banking Crisis II

Post by nyiangelo » Thu Dec 24, 2009 5:28 pm

Treasury removes cap for Fannie and Freddie aid
Fannie Mae and Freddie Mac receive unlimited future funds from taxpayers to stay afloat
Whatever it takes.... Well me being in the construction industry, I was talking to one of my builders who specializes in new high end homes. We were talking about banks lending to start new homes being almost non existant. He states his bank, which happens to be my bank , is being told by gov regulators to stay away from new home loans despite what the public is being told in news and on t.v. Personally I see it happening as now 75% of homes being built are all pre-sold.

http://finance.yahoo.com/news/Treasury- ... 8.html?x=0
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Re: Banking Crisis II

Post by TheSnoo » Sun Dec 27, 2009 10:20 pm

I've read this entire thread, and I keep seeing a common theme.

"USG going to default! DOOM!!!!"

"USG would never default! Don't be silly!"

"Default! DOOM!!!"

"No! No default! It's mostly ok!"

"DOOM!!!"

etc, etc.

I find it interesting that almost no one has really thought about the dynamics of the situation. That being, we're screwed regardless of what happens. Like this:

USG defaults. We're screwed.

USG chooses not to default. We're screwed.

Here's a link to an article by someone who explains it in a fashion a bit more verbose than my own.

http://www.kitco.com/ind/stansberry/dec022009.html
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Re: Banking Crisis II

Post by raptor » Wed Dec 30, 2009 11:58 pm

While it is not officially the end of 2009 I am going to predict that the number of banks closed in 2009 will be 140 and that the FDIC will not close any banks this week and thus the count will be a nice even 140 banks.

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Re: Banking Crisis II

Post by WhoShotJR » Thu Dec 31, 2009 12:02 am

raptor wrote:While it is not officially the end of 2009 I am going to predict that the number of banks closed in 2009 will be 140 and that the FDIC will not close any banks this week and thus the count will be a nice even 140 banks.

Got any bets on 2010?

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Re: Banking Crisis II

Post by TheSnoo » Thu Dec 31, 2009 1:53 am

WhoShotJR wrote:
raptor wrote:While it is not officially the end of 2009 I am going to predict that the number of banks closed in 2009 will be 140 and that the FDIC will not close any banks this week and thus the count will be a nice even 140 banks.

Got any bets on 2010?
I theorize 300+
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Re: Banking Crisis II

Post by flyingredgoat » Thu Dec 31, 2009 3:08 am

WhoShotJR wrote:
raptor wrote:While it is not officially the end of 2009 I am going to predict that the number of banks closed in 2009 will be 140 and that the FDIC will not close any banks this week and thus the count will be a nice even 140 banks.

Got any bets on 2010?
How many do we have left? Do we have any left? :twisted:

Honestly it depends on whether we have a double dip or not. I'm not sure we are out of the woods. I'm also not sure we are in the dark middle of said woods either.

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Re: Banking Crisis II

Post by raptor » Thu Dec 31, 2009 11:13 am

WhoShotJR wrote:
raptor wrote:While it is not officially the end of 2009 I am going to predict that the number of banks closed in 2009 will be 140 and that the FDIC will not close any banks this week and thus the count will be a nice even 140 banks.

Got any bets on 2010?

That is a difficult prediction:

1) The economy has not started to recover though it has IMO stopped getting worse.

2) There are record federal deficits that boggle my mind and interest rates are already effectively at zero. This means less latitude by the Fed to add stimulus to the economy. Thus a double dip recession becomes very possible.

3) The FDIC is effectively insolvent and has already borrowed against future premium revenue to make up for the current deficiency. Thus they will not be in a hurry to close banks if they can avoid it.

4) There are over 500 banks on the FDIC watch list though in normal times only a small % of these banks are closed. Still 5% of 500 is 25 and 140 is 28%.

5) Real estate is not really recovering just stabilizing. Loans on real estate was a key component in many bank failures.

6) Commercial real estate will see more loans coming up for renewal in 2010 thus ditto #5.

7) Most of the banks closed in the last few months have found buyers unlike earlier in 2009 when the FDIC was closing banks and writing checks to depositors. I suspect more troubled banks will have shotgun weddings instead of closures. There is now a market for these troubled banks albeit with the FDIC providing a dowery at the shotgun wedding. This means fewer closures and more mergers.

8 ) The US dollar has strengthened in the last few weeks which to me is very surprising. This IMO indicates anxiety in other countries financial condition and people escaping to the "security" of the US dollar. This could indicate that other economies are not recovering as current stats indicate. It could also indicate that money is flowing into the US to buy "cheap" US goods while the exchange rate is favorable. I am not sure on this one, but it is odd.

9) The FDIC just hired a large number of employees so they are clearly gearing up for continued closures and oversight. I have no doubt that we will see the number of banks closed keep up a steady pace in the first quarter of 2010.


With all of the above in mind I am going to predict that the maximum number of banks closed in 2010 will not exceed 2009's level of 140 but that a minimum number of banks closed will not be less than 60 banks. I think a more probable range is between 80 and 110 closures (excluding mergers).


Edited to add:
Dogbane provided this link and it is a good supplement to the http://www.thestreet.com" onclick="window.open(this.href);return false; and http://www.bankrate.com's" onclick="window.open(this.href);return false; bank review data.

http://moveyourmoney.info/" onclick="window.open(this.href);return false;

This site allows you to put in a zip and a healthy local (read small) bank in your area. If you are thinking of moving your money this site provides suggestions. I do suggest that you use one of the two sites above to verify that data.

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Re: Banking Crisis II

Post by raptor » Fri Jan 01, 2010 11:11 pm

It is official, 140 banks were put out of their misery in 2009.

A summary courtesy of the FDIC.
http://www.fdic.gov/bank/historical/bank/index.html" onclick="window.open(this.href);return false;

EDITED TO ADD:
I think this thread has gotten too big and unwieldy to be useful into 2010. Therefore I am locking this thread and will start a new 2010 bank thread.

Locked

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