FDIC Girds For Bank Failures

[ozymandius]

Source: TheStreet.com

Shaky loan portfolios continue to darken the landscape for the nation's banks, as federal regulators prepare for the possibility of an uptick in failures of financial institutions, according to recent government reports.

A record-high $31.3 billion set aside by banks for loan losses, record trading losses and goodwill expenses dragged down fourth-quarter net incomes of insured banks to a 16-year low, according to the Federal Deposit Insurance Corp.'s quarterly banking profile released Tuesday. The cumulative increase to loan-loss provisions was the largest increase in 20 years.

The FDIC report comes on the heels of study from the Government Accountability Office made public last week, which found the FDIC recorded an estimated liability of $124 million at the end of 2007 for the anticipated failure of some insured institutions and also identified potential losses of $1.7 billion should vulnerable insured institutions also fail.

All of this is happening as the FDIC, established during the Great Depression to provide a backstop to depositors during a rash of bank failures, solicits banks' input on ways to accomplish as orderly a wind-down as possible in the event of a major bank's demise. The FDIC sent a notice out to banks requesting their ideas last month.

Read more: http://www.thestreet.com/s/fdic-girds-for-bank-failures/newsanalysis/banking/10405078.html?puc=googlefi

[David Zephyr]

1. One fucking family (that would be the Bush cabal) has destroyed the United States of America.

What an evil bloodline this family has.

[aquart]

3. "How much harm can he do? He'll have good advisers."

That's what they said in 2000. "How much harm can he do?"

[defendandprotect]

23. Bush Family don't consider this "harm" ...they consider it PROGRESS . . .!!!

[Yavin4]

31. I Got Into Red Faced Arguments with People Over That Very Point

That bullshit came from one asshole Naderite that I worked with.

[Barrett808]

36. Him being a Bush, I knew it would be a disaster, but...

...even I didn't foresee the sheer, appalling immensity of the catastrophe.

[Karenina]

8. The visual...

[my2sense]

2. Is it time to get our money

out of the banks? This is scary.

[Hydra]

4. You have money to get out of the bank?

Seriously, though, this is the wrong time to be asking. Dollar value is nil- gold or euros would have been a good idea a few years ago before the chaos started.

All you can do is hang on and pray- All I have to do is pray. I don't ever have any money left in my bank account come my next payday, so if the banks go under, the FDIC will owe me less than $200, assuming they feel like paying me.

[ayeshahaqqiqa]

6. If you do, convert it to something other than dollars n/t

[Vanje]

I've been converting my savings....

...to groceries, and gasoline, and now its all gone.

I'm so glad I dont have anything in the bank.

[ayeshahaqqiqa]

42. If you get more money, invest in groceries

I've got a lot of canned goods stockpiled, plus seeds for my garden this spring.

[ayeshahaqqiqa]

5. This is the first time since the Great Depression

that we've had so much strain on banks, isn't it? Do we know if the FDIC will hold up?

[defendandprotect]

24. Don't forget the S&L Theft & Embezzlements which we paid for ---

What was that . . . between $500 million and $700 million????

Or more . . .

Bush family also deep in that one . . .

[lonestarnot]

25. McCain in neck deep too.

[girl gone mad]

29. 500 Billion with a 'B'.

Neil Bush's contribution to the disaster alone was more than 1 Billion.

[defendandprotect]

46. Sorry . . . thank you!! That's $500 to $700 BILLION for S&L Theft & Embezzlements --- !!!

Which Americans repaid . . .

Thank you, again ---

Difficult to believe when you're dealing with billions!!!
But true . . !

[flashl]

7. Another American paradox... Shawdow banking threatens regulated banking. nt

[Karenina]

9. The secret stock market...

http://www.marketwatch.com/news/story/secret-stock-market-upstart-systems/story.aspx?guid=%7B11EB6EC9-6D71-43C9-ADD2-59C6B9E3C5D1%7D&print=true&dist=printTop

[flashl]

10. Seen your posts you have been dead on...

[lonestarnot]

34. Your link isn't working.

[lonestarnot]

35. Finally loaded.

Thanks! :toast:

[lonestarnot]

38. eeee gads

"...dark pool advocates point out, big institutions actually are running funds -- through retirement and pension accounts -- that often make trades on behalf of ordinary people."

[UpInArms]

11. Well, I can't say that I'm surprised, actually the opposite is true

have I said how much I despise this mal-administration lately?

[cliss]

12. The FDIC....

I've been discussing the subprime mortgage meltdown with friends. I've warned them that the mortgage meltdown is going to affect the banks, which are dangerously close to insolvency.

They're broke.

My friends seem to understand that fact, but they still seem very calm, feeling reassured. They say, "Well, the FDIC will cover any and all bank accounts up to $100,000".

Really? I wonder.

I've read that the FDIC has no funds to speak of. Also, think about what would happen if several banks were to fold.

[CGowen]

13. Congress can shift from other funds into FDIC when the s*** hits the fan,

and than it's the taxpayer again....that's what I've heard.

[lurky]

16. I wonder about that too.

Some of these big banks are huge. Bank of America has over $500 billion in deposits. Citi and Chase are in the same neighborhood. If one of the big boys were to come crashing down, or several of the mid-sized banks, I can't imagine where the money would come from to bail them out.

[MadMaddie]

19. The truth is the banks are too big right? With deregulation

and megamergers this was inevitable. Banks with too many business paths, too few banks and you have the titanic with rusty screws.

These banks have become greedy and bloated and Americans will pay.

[defendandprotect]

26. Right --- FDIC was intended to cover what might actually arise in ONE bank or a few ---

in the nature of some business difficulty --- or even theft in the bank ---

but they moved the insurance coverage from $10,000 per account to $100,000 BEFORE the S& L

theft and embezzlements for one thing which also changed the scheme of things ---

Then the play went into effect --- boom, problems in a wide number of banks --- and another

bailout for the American taxpayer to contend with.

Profits for whom . . . ???

Corrupt people!!

[Amonester]

21. Easy to imagine: from the same place where all the "off the budget"

monies for the Iraq sham come from.

The federal printer.

No wonder everything is on the way up: Hyper-inflation.

Too much paper-money based on nothing else that thin air!

[katty]

14. inevitable-slippery slope

[FirstLight]

15. How long will it be?

We know things are shaky, insolvent, etc... but how long do we really have before this crashes? Is it waiting for the grain prices to hit the roof? Is it relative to gas? food? what will tip the scales and when...

seriously, who has a timeline to bring to the discussion? I know nothing about finance, nor do i have any money...so I am crewed anyhow, but how long do we have before it all comes crashing to a halt?

I'd be interested in your theories ...

[cliss]

18. Here's my (humble) take on it:

1. Watch the banks. Follow them closely, because if they are getting ready to tip over, we should get some kind of clues or hints about it. Look for big headline stuff like, "Bank of America CEO decides to quit, or U.S. Bank reorganizes board of directors" that kind of thing. Check the newspapers, hopefully we'll get some warnings (if ever so small) that they are in serious trouble.

When?
I've read that as early as March of this year. That's next month.

Suggestion
It's always a good idea to hoard a little money. Even a few bucks in a cigar box will do. Try to build up around $100.00. Small denominations, plus small change. It will definitely help to have "just in case". Plus, it's always nice to have a little stash and you'll be able to sleep soundly at night.

[defendandprotect]

17. You also have long-standing/original FEMA laws which impact on

personal savings accounts ---

and I don't know if there have been any new FEMA/Homeland security laws passed in the latest
round of corruption ---

But. . . the original ones . . . as I recall it say that they can hold your accounts in check ---
and not let you withdraw --- except a very small percentage at a time????

Anyone here familiar with this???

[marmar]

20. It's all gone wrong, hasn't it?

:scared:

[HuskiesHowls]

22. And this was predicted....in 1995!!

Move over, Charles Keating - causes of the savings and loan scandal
Washington Monthly, May, 1995 by Amy Waldman
http://findarticles.com/p/articles/mi_m1316/is_n5_v27/ai_16947718/pg_8

<snip>
"Now, a Congress infected with a missionary zeal for deregulation is preparing to repeal the Depression-era Glass-Steagall law, which erected walls beween commercial and investment banks to contain the risks that federally insured institutions could take. At minimum, the legislation before Congress will allow any bank to underwrite securities; at most, it will allow any commercial institution to own a bank.

We all ought to be a little nervous. The government still guarantees $100,000 in federal deposit insurance per person, per institution. If a bank should play the market, and the market crash, as it did in 1987, you could be left holding the bag. "As long as any institution can offer insured accounts and pursue risky activities," the National Commission on Financial Reform, Recovery, and Enforcement warned in 1993, "taxpayers could be vulnerable to some future set of 'unique' circumstances and events that could grow into another debacle."

Tell that to the banks. "We think we ought to be able to offer all financial services ... and to do so in a manner that isn't loaded up with a bunch of regulatory restrictions," says Edward Yingling of the American Bankers Association. Flushed with record profits, banks are pushing for "regulatory relief" and expanded powers. "

[defendandprotect]

27. Bush is predicting a GOP win . . . evidently, they think there's still more to steal---!!!

[defendandprotect]

28. And why would any Democrat want to try to deal with all this economic chaos --- ???

Can they work fast enough to shore it up or put Humpty Dumpty back to gether again?

And, has anyone heard a question like this on the debates?

[Corgigal]

30. I'm not familiar with this website

but if this information is correct shouldn't we be getting out of Iraq by this weekend? When are banks are failing we shouldn't be spending 12 billion a month on an unwindable war.

[defendandprotect]

32. The entire Gulf War I cost $45 billion and other countries helped up pay the bill--!!!

Imagine what we could have done domestically with this money!!!

Imagine 2 million Iraqi lives lost --- for oil ---

and almost 4,000 American GIs . . . !!!

THIS IS THE WORK OF INSANE, SUICIDAL MEN ---

[lonestarnot]

39. Or a fucking war based on lies at any time.

[Yavin4]

33. This Will All Be President Obama's Fault

The right wing propaganda machine will go into over-drive on this.

[Mojorabbit]

41. Yes and that breaks my heart

There is so much ready to hit the fan that no one is going to come out unscathed.

[Barrett808]

37. Nouriel Roubini: "Losses could be in the $1 to $2 trillion range"

Testimony on the Economy, Fed Policy and Financial Markets at a Hearing in the House Committee on Financial Services
Nouriel Roubini | Feb 26, 2008

Today I was one of the five speakers at a Congressional Hearing in the House of Representatives’ Committee on Financial Services. The hearing was on Monetary Policy and the State of the Economy. Fed Chairman Bernanke will appear tomorrow Wednesday in front of this committee to present the Fed’s semi-annual Humphrey-Hawkins testimony on the state of the economy.

...

I pointed out that, with millions of households going into negative equity, the risk of massive defaults on mortgages is very serious. Thus, the unappealing options may range between a direct effective nationalization of mortgages (if the government were to buy in auctions a large part of currently distressed mortgages and/or RMBS) or a nationalization of parts of the banking system if the government does not intervene directly to avoid foreclosures: millions of home owners walking away from their mortgages would saddle banks with additional losses that could be in the $1 to $2 trillion range and that would thus wipe out altogether the capital of most of the banking system forcing a government bailout of such a financial system (as deposits are mostly guaranteed). So in an extreme scenario you may end up with either a nationalization of mortgage or a nationalization of the banking system.

The committee Chairman Barney Frank was strongly supportive of proposals to tighten the regulation of mortgages and of financial services; I share that view. There was a broad consensus in the hearing – with the partial exception of Taylor – that serious regulatory failures were at the source of this subprime disaster and severe credit crunch in financial markets.

(more)

http://www.rgemonitor.com/blog/roubini/246276

[defendandprotect]

45. Remember the SURPLUS? Bush should be headed to jail ---

bankrupting the Treasury should be TREASON --- !!!

[lonestarnot]

40. kick

[Snazzy]

43. No worries, China got it covered

Just make sure you smile a lot during the Olympics and buy lots of toxic crap.

[DemReadingDU]

44. 76 troubled lenders in U.S. under scrutiny by FDIC

2/27/08 76 troubled lenders in U.S. under scrutiny by FDIC

The housing crisis that has claimed many victims among Ohio homeowners could be taking aim next at some of the state's banks.

Nationally, 76 banks are under scrutiny by the Federal Deposit Insurance Corp. and categorized as "problem institutions" based on their financial health.

The FDIC, which doesn't identify the troubled banks, is adding staff members in anticipation of an increase in bank failures.

Ohio, which has some of the worst foreclosure rates in the nation, is among those states that come to the forefront of the discussion, one banking expert said.

"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida and Georgia," Jaret Seiberg, a Washington policy analyst for the financial-services firm Stanford Group, told The Wall Street Journal.A new report by the FDIC showed that 9.4 percent of federally insured commercial banks in Ohio were unprofitable during the fourth quarter, nearly triple the number for the same period a year ago.

Banking officials emphasize, however, that deposits in FDIC-insured banks are safe and are insured up to $100,000.

more...
http://www.columbusdispatch.com/live/content/business/stories/2008/02/27/Bank_Failure.ART_ART_02-27-08_C8_UM9FKF7.html?sid=101

[roamer65]

47. Your money is safe in the banks.

It just won't buy you squat when Bernanke and Bush Crime Family are done. They'll roll trillions off the printing presses to keep the banks "solvent".