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 raptor » Wed Aug 12, 2009 9:27 pm

Ok now this is an weird one.

http://finance.yahoo.com/news/Paulson-f ... et=&ccode=" onclick="window.open(this.href);return false;

Paulson clearly thinks there is a huge value play in B of A, but this is one weird and ballsy bet. I am glad he is not using my money.

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Re: Banking Crisis II

Post by Kathy in FL » Thu Aug 13, 2009 7:45 am

raptor wrote:Ok now this is an weird one.

http://finance.yahoo.com/news/Paulson-f ... et=&ccode=" onclick="window.open(this.href);return false;

Paulson clearly thinks there is a huge value play in B of A, but this is one weird and ballsy bet. I am glad he is not using my money.

Well, considering the stock went as low as $2.93 and now regularly bounces up to the $16 mark there is some pretty good evidence that BofA is going to continue to recover. It will definitely be a while before they see $40 per share again but BofA is known for being pretty ruthless and cuthroat. When it comes right down to it they are doing the necessary to stay afloat.

I don't know about all BofAs but here in Tampa they are actively encouraging customers to use their new ATM system that allows for larger deposits (as in the stack is bigger) and you get a picture of what you put in because you feed checks and such in manually. That also allows for fewer delays in being able to access the money. Transactions that go through the tellers are also being done using the ATM card swipe system which makes everything faster. And every time I'm in the branch someone is opening a new account and I'm in there frequently on business.

I'm told that less efficient branches are being told speed the customer service time up or get replaced or closed down.

Now some of this is a result of their pandemic planning. There was a bank exercise over a year ago where the banks (most of them, not just BofA) participated in a pandemic drill of sorts and they found lots of holes and problems that I've watched BofA actively work through. But this is also a labor saving and cost cutting measure for them as well as an investment in more tech stuff like upgraded online banking and the super-ATMs.

Paulson is a risk taker but the shares won't have to make gigantic gains for him to make money at this price. Of course the opposite of that is true as well. But that's the name of the game for these big guys. And as the fourth largest share holder they might get some perks.

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Re: Banking Crisis II

Post by Kathy in FL » Thu Aug 13, 2009 9:37 am

Foreclosures rise 7 percent in July from June
http://news.yahoo.com/s/ap/20090813/ap_ ... sure_rates" onclick="window.open(this.href);return false;

The number of U.S. households on the verge of losing their homes rose 7 percent from June to July, as the escalating foreclosure crisis continued to outpace government efforts to limit the damage.

Foreclosure filings were up 32 percent from the same month last year, RealtyTrac Inc. said Thursday. More than 360,000 households, or one in every 355 homes, received a foreclosure-related notice, such as a notice of default or trustee's sale. That's the highest monthly level since the foreclosure-listing firm began publishing the data more than four years ago.

Banks repossessed more than 87,000 homes in July, up from about 79,000 homes a month earlier.

Nevada had the nation's highest foreclosure rate for the 31st-straight month, followed by California, Arizona, Florida and Utah. Rounding out the top 10 were Idaho, Georgia, Illinois, Colorado and Oregon. Among cities, Las Vegas had the highest rate, followed by the California cities of Stockton and Modesto.

While there have been numerous recent signs that the ailing U.S. housing market is finally stabilizing after three years of plunging prices, foreclosures remain a big concern. Foreclosures are typically sold at a deep discount, hurting neighbors' home values.

(snip)

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Re: Banking Crisis II

Post by raptor » Thu Aug 13, 2009 9:50 am

Kathy in FL wrote: Paulson is a risk taker but the shares won't have to make gigantic gains for him to make money at this price. Of course the opposite of that is true as well. But that's the name of the game for these big guys. And as the fourth largest share holder they might get some perks.
This is very true. It is the size of the position in a single asset that raised my eyebrows. Normally you would spread such an investment around in the sector,unless by concentrating the investment you achieved some other goal as well.
Being the 4th largest shareholder should get you some special consideration. The question in my mind is what special consideration does Paulson need/want.

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Re: Banking Crisis II

Post by Kathy in FL » Fri Aug 14, 2009 9:26 am

Toxic Loans Topping 5% May Push 150 Banks to Point of No Return

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

(snip)

http://bloomberg.com/apps/news?pid=2060 ... TT9jivRIWE#" onclick="window.open(this.href);return false;

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Re: Banking Crisis II

Post by raptor » Fri Aug 14, 2009 7:54 pm

Four banks failed today:

Colonial Bank, Montgomery, Alabama, was closed today by the Alabama State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking and Trust (BB&T), Winston-Salem, North Carolina, to assume all of the deposits of Colonial Bank.

Dwelling House Savings and Loan Association, Pittsburgh, Pennsylvania, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with PNC Bank, National Association, Pittsburgh, Pennsylvania, to assume all of the deposits of Dwelling House Savings and Loan Association.

Community Bank of Arizona, Phoenix, Arizona, was closed today by the Arizona Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with MidFirst Bank, Oklahoma City, Oklahoma, to assume all of the deposits of Community Bank of Arizona.

Community Bank of Nevada, Las Vegas, Nevada, was closed today by the State Commissioner, by Order of the Nevada Financial Institutions Division, which then appointed Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC created the Deposit Insurance National Bank of Las Vegas (DINB), which will remain open for approximately 30 days to allow depositors access to their insured deposits and time to open accounts at other insured institutions. At the time of closing, the receiver immediately transferred to the DINB all insured deposits of Community Bank of Nevada, except for brokered deposits, certificates of deposit (CDs) and individual retirement accounts (IRAs). The receiver also transferred to the DINB all secured public unit deposits.

Colonial Bank is the largest bank failure in 2009 and will cost the FDIC and ultimately us $2.8 billion.

Dwelling House on the other hand will cost a "paltry" $6 million.

Community Bank of Nevada could not find a buyer so the FDIC will run the bank for 30 days instead of simply sending all depositors a check. This is a departure form previous closures.

I wonder if the 150 banks listed above in kathy's post include these two failed banks?

http://www.marketwatch.com/story/coloni ... 2009-08-14" onclick="window.open(this.href);return false;

Edited to add 2 additonal banks.

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Re: Banking Crisis II

Post by raptor » Sun Aug 16, 2009 7:40 pm

The plot thickens with regard to Colonial BancGroup closure. The Feds are conducting a criminal investigation into the bank and a group of it investors. The other interesting thing is while the FDIC thinks this bank failure will cost $2 billion other estimate that $5 to $7 billion may be the correct loss amount.

http://money.cnn.com/2009/08/14/news/co ... 2009081500" onclick="window.open(this.href);return false;

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Re: Banking Crisis II

Post by phil_in_cs » Sun Aug 16, 2009 8:22 pm

raptor wrote:The plot thickens with regard to Colonial BancGroup closure. The Feds are conducting a criminal investigation into the bank and a group of it investors. The other interesting thing is while the FDIC thinks this bank failure will cost $2 billion other estimate that $5 to $7 billion may be the correct loss amount.

http://money.cnn.com/2009/08/14/news/co ... 2009081500" onclick="window.open(this.href);return false;
One estimate might include things that were actually FDIC insured, and the other might include things that were sold as if they were FDIC insured. That's not an uncommon scam.
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Re: Banking Crisis II

Post by raptor » Tue Aug 18, 2009 10:32 am

Well talk about the nick of time. CIT was able to restructure and buy back debt that matures today to avoid a default and certain bankruptcy.

CIT said 59.81 percent of the $1 billion floating rate notes eligible for the tender were offered, at a purchase price of $875 per $1000 in debt. CIT will repay notes that weren't tendered in the offer at their full value, the company said.

http://www.reuters.com/article/smallBus ... GD20090817" onclick="window.open(this.href);return false;

They now have bought a reprieve until October 1, 2009. By this date the creditors have to approve a restructuring plan or CIT will be in default of that loan agreement. I am sure glad I am not CIT's CFO right now, talk about stress and sweating bullets.

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Re: Banking Crisis II

Post by flyingredgoat » Tue Aug 18, 2009 2:28 pm

raptor wrote:I am sure glad I am not CIT's CFO right now, talk about stress and sweating bullets.
Don't tell me this might affect his golden parachute. :shock:

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Re: Banking Crisis II

Post by raptor » Tue Aug 18, 2009 2:45 pm

flyingredgoat wrote:
raptor wrote:I am sure glad I am not CIT's CFO right now, talk about stress and sweating bullets.
Don't tell me this might affect his golden parachute. :shock:

K
Honestly whoever is in charge of this restructure, IF it is successful, will have earned his bonus and then some.

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Re: Banking Crisis II

Post by Valarius » Thu Aug 20, 2009 6:48 pm

Damn.

According to Daily Kos reports, the FDIC may have officially run out of money to cover all the closed banks.

http://www.dailykos.com/storyonly/2009/ ... C-is-Broke" onclick="window.open(this.href);return false;

Here's a tally of the amounts they cited:

http://www.tradingfloor.com/EN/Document ... ilures.xls" onclick="window.open(this.href);return false;

Well. I'm lacking in shotgun stock, but my investments in canned goods are looking to turn a neat profit.
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Re: Banking Crisis II

Post by Heartless51 » Thu Aug 20, 2009 7:58 pm

Wife works at a local bank. The FDIC is requiring each employee to sit through a 2+ hr phone seminar (seperatly) in order for the bank to keep its FDIC insurance.

That may weed out the banks that the FDIC is required to insure.

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Re: Banking Crisis II

Post by drunkensurvivor » Fri Aug 21, 2009 12:36 am

Valarius wrote:Damn.

According to Daily Kos reports, the FDIC may have officially run out of money to cover all the closed banks.

http://www.dailykos.com/storyonly/2009/ ... C-is-Broke" onclick="window.open(this.href);return false;

Here's a tally of the amounts they cited:

http://www.tradingfloor.com/EN/Document ... ilures.xls" onclick="window.open(this.href);return false;

Well. I'm lacking in shotgun stock, but my investments in canned goods are looking to turn a neat profit.
That is the most informative thing I have ever read on the Daily Kos. Don't get me wrong though, I actually mean that as a compliment. The FDIC fund running out of money isn't a big deal though in the grand scheme of things. The required money is a drop in the bucket compared to overall federal spending. I still maintain we are going to have business as usual for a year or two at least, even though our current business as usual is pretty crazy from an objective standpoint. There shouldn't be a dollar collapse or hyperinflation, and even if there was the real value of your canned goods probably wouldn't go up much, just the dollar value(with massively devalued dollars).

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Re: Banking Crisis II

Post by drunkensurvivor » Fri Aug 21, 2009 12:38 am

Heartless51 wrote:Wife works at a local bank. The FDIC is requiring each employee to sit through a 2+ hr phone seminar (seperatly) in order for the bank to keep its FDIC insurance.

That may weed out the banks that the FDIC is required to insure.
Doubtful, since no one with any brains is going to deposit money into a bank without FDIC insurance unless there is some compelling reason for them to do so. All it will do is put additional strains on banks by forcing them to commit resources toward pursuits that aren't productive for them.

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Re: Banking Crisis II

Post by Kathy in FL » Fri Aug 21, 2009 7:57 am

To those of us in Florida some of these statistics will come as no surprise. Not only has Florida's population shrunk for the first time since 1957 or so, but we rank the highest foreclosure state in the US. A lot of the foreclosures have been in second homes and residential investment property but it will have a domino effect on primary residences before all is said and done.

Mounting joblessness fuels US housing crisis
By Saskia Scholtes in New York

Published: August 20 2009 17:59 | Last updated: August 20 2009 17:59

More than one in every eight homeowners with a mortgage was behind on home loan payments or in some stage of foreclosure at the end of the second quarter, as mounting unemployment aggravated the housing crisis, the Mortgage Bankers Association said on Thursday.

The percentage of loans that were in foreclosure or at least one payment past due rose to 13.16 per cent, the highest increase since the MBA began keeping records in 1972 and a jump of more than a percentage point since the first quarter.


Jay Brinkmann, chief economist at the MBA, said signs were growing that mortgage performance is being affected more by unemployment than by the structure of risky home loans, indicating a new stage in the foreclosure crisis that may not be easily addressed by government loan modification programmes.

While the proportion of foreclosures started on borrowers with subprime adjustable-rate mortgages fell dramatically in the second quarter, foreclosure starts on traditional prime fixed-rate loans saw a dramatic increase. Prime fixed-rate loans accounted for one in three foreclosure starts at the end of the second quarter. A year ago they accounted for one in five.

“There has been a shift in the problem from one driven by the types of loans to one driven by macro problems in the economy and drops in house prices,” said Mr Brinkmann.

Florida continued to be the worst state in the union for mortgage performance, closely followed by Nevada. Florida has 12 per cent of its mortgages in some stage of foreclosure – the highest in the country – while 23 per cent of the Florida mortgage market is at least one payment overdue. This is almost twice the national average if Florida’s performance is excluded.

The next highest states were Nevada at 21.3 per cent of loans at least one payment past due, Arizona at 16.3 per cent and Michigan at 15.3 per cent.

The new figures come as mortgage lenders and servicers, which collect home loan payments, begin implementing President Barack Obama’s housing market rescue plan. The second quarter saw 38 mortgage servicers modifying home loan terms under the programme, sending out more than 400,000 modification offers and beginning 230,000 trial modifications.

While these programmes have had an impact on holding foreclosure rates below where they would otherwise be, Mr Brinkmann said many of the foreclosures involved homes that were vacant, borrowers who no longer had jobs, or loans where there was fraud involved.

As a result, said Mr Brinkmann, “it is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves.” Mr Brinkmann expects the peak in foreclosures to lag the peak in unemployment by around 6 months.

http://www.ft.com/cms/s/0/4f8283a8-8da3 ... abdc0.html" onclick="window.open(this.href);return false;

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Re: Banking Crisis II

Post by raptor » Fri Aug 21, 2009 9:59 pm

Four banks were closed today bringing the total of banks closed in 2009 to 81.

One interesting twist this week is that Guaranty Bank finally failed and was acquired by Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest bank. This failure will cost the FDIC $3 billion dollars. If you recall this bank was reported to be in trouble for quite some time. Well now it is gone.

Guaranty Bank, Austin, TX was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with BBVA Compass, Birmingham, Alabama, to assume all of the deposits of Guaranty Bank, excluding those from brokers.

CapitalSouth Bank, Birmingham, Alabama, was closed today by the Alabama State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with IBERIABANK, Lafayette, Louisiana, to assume all of the deposits of CapitalSouth Bank, excluding those from brokers.

First Coweta, Newnan, Georgia was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with United Bank, Zebulon, Georgia, to assume all of the deposits of First Coweta, excluding those from brokers.

ebank, Atlanta, Georgia, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume all of the deposits of ebank.


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

http://money.cnn.com/2009/08/21/news/ec ... 2009082119" onclick="window.open(this.href);return false;

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Re: Banking Crisis II

Post by phil_in_cs » Mon Aug 24, 2009 6:58 am

There will be a lot of local layoffs as a result of Compass Bank assuming Guaranty Bank. There's no reason for a single bank to have as many locations as the two of those do.
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Re: Banking Crisis II

Post by Kathy in FL » Mon Aug 24, 2009 7:00 am

There are also very specific banking rules against it. They will have to close branches or sell them off piecemeal to other banks to get down to the market share they are allowed to have in any given area.

phil_in_cs wrote:There will be a lot of local layoffs as a result of Compass Bank assuming Guaranty Bank. There's no reason for a single bank to have as many locations as the two of those do.

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Re: Banking Crisis II

Post by Kathy in FL » Mon Aug 24, 2009 7:01 am

Nouriel Roubini says the risk of a double dip recession is increasing.

http://www.ft.com/cms/s/0/90227fdc-900d ... abdc0.html" onclick="window.open(this.href);return false;

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Re: Banking Crisis II

Post by raptor » Mon Aug 24, 2009 10:21 am

Kathy in FL wrote:Nouriel Roubini says the risk of a double dip recession is increasing.

http://www.ft.com/cms/s/0/90227fdc-900d ... abdc0.html" onclick="window.open(this.href);return false;
This is total opinion with no facts to support this opinion, so take that for what it is worth...not much.

I agree with Roubini on this one.

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Re: Banking Crisis II

Post by Kathy in FL » Mon Aug 24, 2009 10:29 am

raptor wrote:
Kathy in FL wrote:Nouriel Roubini says the risk of a double dip recession is increasing.

http://www.ft.com/cms/s/0/90227fdc-900d ... abdc0.html" onclick="window.open(this.href);return false;
This is total opinion with no facts to support this opinion, so take that for what it is worth...not much.

I agree with Roubini on this one.
After an "L-shaped" recovery this is the one I worried about the most. If we do have a double dip, the second "dip" make be even deeper than the first one because the .gov agencies have already shot their wad as far as what they can do to force a correction. We just still have a lot of downward pressure and right now the only thing holding up the market is people's wishes. Numbers aren't good, unemployment is still worsening in many locations though getting better in just a few (but that is primarily a result of stimulus money creating government jobs and not any real long term healthy growth), consumer confidence still slipping, home values still going down desite the "surge" in home sales (primarily by investors or first time home buyers taking advantage of the tax rebate), etc.

The market manipulation - in my opinion - is going to fall apart over the next couple of months and then I hope to see some natural corrections that point towards healthier markets even if they are operating on a slimmer margin.

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Re: Banking Crisis II

Post by Heartless51 » Mon Aug 24, 2009 8:36 pm

Looking for the bright side:

Anyone know a "forced corrections" that worked out well?

There has to be at least 1 example.

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Re: Banking Crisis II

Post by KeeblerNinjaClan » Mon Aug 24, 2009 9:07 pm

Heartless51 wrote:Looking for the bright side:

Anyone know a "forced corrections" that worked out well?

There has to be at least 1 example.
Our prison system? :?


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