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ANOTHER BANK MELTDOWN LOOMING-UPDATE 50-5 NEW FAILURES NEW TOTAL FOR 2010 TO 145

Updated on January 7, 2011

BANKS BACK AT HIGH RISK-UPDATE 3

BROKEN LINK

THREE MORE BANKS FAIL UPDATE 4

BROKEN LINK

UPDATE 9-FDIC LIKELY TO REQUIRE PREPAID FEES

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.

http://247wallst.com/2009/10/21/the-idea-of-breaking-up-the-largest-banks-gains-ground/#

UPDATE 15-BANK FAILURES HIT 100-FDIC IN THE RED

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.

http://t.love.com/266510932

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 25-FDIC LIST OF TROUBLED BANKS GROWS TO 702 INCREASE OF 27%

UPDATE 26-FDIC CLOSES 4 MORE BANKS TOTAL 26 IN 2010

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 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 39-5 NEW FALURES NEW TOTAL FOR 2010 TO 108

UPDATE 41-1 NEW FAILURE NEW TOTAL FOR 2010 TO 110

UPDATE 42- 8 NEW FAILURES NEW TOTAL FOR 2010 TO 118

UPDATE 45-2 NEW FAILURES NEW TOTAL FOR 2010 TO 127

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.

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