ANOTHER BANK MELTDOWN LOOMING-UPDATE 50-5 NEW FAILURES NEW TOTAL FOR 2010 TO 145
UPDATE ANOTHER HOUSING MELTDOWN
THE BEAT GOES ON UPDATE 2
BANKS BACK AT HIGH RISK-UPDATE 3
THREE MORE BANKS FAIL UPDATE 4
UPDATE 5 FHA CASH STRAPPED
UPDATE 6-2 MORE BANKS FAIL TOTAL 94
UPDATE 7-FDIC MAY ASK BANKS FOR BAILOUT
UPDATE 8-LARGE LOAN LOSSES LOOM AT $53 BILLION
UPDATE 9-FDIC LIKELY TO REQUIRE PREPAID FEES
One other bank failure brings 2009 total to 95 banks
UPDATE 10-BANK FAILURES NOW TOTAL 98
UPDATE 11-MORTGAGE MODIFICATION&FHA IN TROUBLE
UPDATE 12-UP MARKET FORECLOSURES ESCULATE
UPDATE 13-3RD QUARTER FORECLOSURES HIT NEW RECORD
UPDATE 14-VOLKER BREAK UP TOO BIG TO FAIL
Former Federal Reserve Chairman Paul Volker proposes beaking big banks up into functional entities. Separate investestment entity from savings and housing loan entities.
UPDATE 15-BANK FAILURES HIT 100-FDIC IN THE RED
UPDATE 16-BANK FAILURES HIT 106
UPDATE 17 CIT GROUP FILES CHAPTER 11
This will cost the American taxpayers $2.3billion in TARP funds since the TARP fund were spent on common stock. If a student or graduate files bankruptcy their student loan that debt is not discharged by the bankrupty court. They still owe the money.
UPDATE 18-5 MORE BANK FAILURES-TOTAL NOW 120
UPDATE 19-4 MORE FAILURES BRING TOTAL TO 124
UPDATE20-6 MORE FAILURES BRING TOTAL TO 130
Not a normal bank failure as 2009 hits 130
UPDATE 21-3 MORE FAILURES BRING TOTAL TO 133
UPDATE 22-7 MORE FAILURES BRING TOTAL TO 140
UPDATE 23-FHA INDICATES FORECLOSERS TO RISE IN 2010
UPDATE 24-S&P SEES 1.8MILLION FORECLOSURES LOOMING
UPDATE 25-FDIC LIST OF TROUBLED BANKS GROWS TO 702 INCREASE OF 27%
UPDATE 26-FDIC CLOSES 4 MORE BANKS TOTAL 26 IN 2010
UPDATE 27-FORECLOSURES STILL 15% ABOVE 2009 LEVELS
UPDATE 28-FOUR MORE BANK CLOSURES AND ONE CREDIT UNION BANKS 26,27,28,29 FOR 2010
UPDATE 29-Foreclosure easing in big cities but still spreading
UPDATE 30-FDIC CLOSES 7 MORE BANKS 2010 TOTAL NOW 64
UPDATE 31-BANK FAILURES FOR 2010 TOTAL NOW 72
UPDATE 32-BANK FAILURES FOR 2010 TOTAL NOW 78
UPDATE 33-BANK FAILURES FOR 2010 TOTAL NOW 81
UPDATE 34-BANK FAILURES FOR 2010 TOTAL NOW 82
UPDATE 35-FALURES NEW TOTAL FOR 2010 TO 86
UPDATE 36-FALURES NEW TOTAL FOR 2010 TO 90
UPDATE 37-6 NEW FALURES NEW TOTAL FOR 2010 TO 96
UPDATE 38-7 NEW FALURES NEW TOTAL FOR 2010 TO 103
UPDATE 39-5 NEW FALURES NEW TOTAL FOR 2010 TO 108
UPDATE 40-1 NEW FAILURE NEW TOTAL FOR 2010 TO 109
UPDATE 41-1 NEW FAILURE NEW TOTAL FOR 2010 TO 110
UPDATE 42- 8 NEW FAILURES NEW TOTAL FOR 2010 TO 118
UPDATE 43- 1 NEW FAILURES NEW TOTAL FOR 2010 TO 119
UPDATE 44-NOW NEW FAILURES AVERAGE 14 PER MONTH FOR 2010-TOTAL 125
UPDATE 45-2 NEW FAILURES NEW TOTAL FOR 2010 TO 127
UPDATE 46-2 NEW FAILURES NEW TOTAL FOR 2010 TO 129
UPDATE 47-2 NEW FAILURES NEW TOTAL FOR 2010 TO 131
UPDATE 48-4 NEW FAILURES NEW TOTAL FOR 2010 TO 135
UPDATE 49-5 NEW FAILURES NEW TOTAL FOR 2010 TO 140
UPDATE 50-5 NEW FAILURES NEW TOTAL FOR 2010 TO 145
RECENT REPORTS FDIC RESERVES VERY LOW
According to the most recent reports the FDIC reserves are very low $10.4 billion compared to last year at this time $40 billion. The officials at FDIC seem to be implying that they are likely to go to the Treasury to replenish FDIC reserves. This would be accomplished by the FDIC borrowing $500 billion from the Treasury.
COMMERCIAL AND SMALL BUSINESS LOANS IN TROUBLE
While the housing sector is on rehab it has stabilized to a point. Housing is still in critical condition, but the commercial and small business sectors are now driving additional bank failures.
To date (9/1/2009) in this year 84 banks have failed and and additional 400 are on the FDIC critcal list. Thus the FDIC is looking to borrow from the Treasury to secure the depositors funds in future failed banks. Many of the brick and morter businesses holding loans from these troubled banks have abandoned the very buildings which secure the troubled loans. The businesses have filed bankruptcy and there is no market for the brick and morter buildings which they inhabited.
WILL THE FED MONITIZE MORE DEBT
If the FDIC borrows $500 billion from the Treasury the Treasury will have to generate the funds to lend the FDIC by selling long term Treasury bonds in the amount of that $500 billion. In mid August of 2009 the last time $500 billion in long term Treasury bonds were sold. They were initially sold to primary buyers on the private market with the implicit understanding that the Federal Reserve Bank would soon buy these bonds on the secondary market (Wink, wink, nod, nod).
Exactly two weeks after the sale to primary buyers the Fed bought these $500 billion worth of bonds on the secondary market. The Fed printed the money to make this purchase and thus another $500 billion of debt was monitized which devalues all long term T-bonds, and the US currency the value of which is based on the value of the T-bonds.
The reason for the implicit agreement of the FED buying the T-bond was that at present time is is no private market for additional US T-bonds. Our past practice of relying on foreign sources for financing our public debt is becomming less and less probable as a source of future financing.
Thus the almost certain result of the FDIC borrowing money from theTreasury will result in an additional monitazation of another $500 billion of debt, and further resulting devaluation of the US currency.
I WISH I HAD THE ANSWERS
I do wish I had the answers to this current situation. I don't enjoy spreading gloom and doom but I am reporting this situation as I see it, and is is a huge problem to the American people. I do note that current insured accounts of the FDIC to about $3.4 trillion. I will note that this is the precise situation of public debt and debt monitazion that caused Warren Buffit to warn that the USA was in danger of becoming a "Banana Republic".
I welcome all comments and suggestions or even corrections that any reader may have.