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Posts Tagged ‘FDIC

New Desperation from the FDIC

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(c/0 The Daily Digest)

ZeroHedge has a good find today: The FIDC is getting so desperate that it’s literally begging Americans to open savings accounts. Here’s the press release:

FOR IMMEDIATE RELEASE
February 22, 2010     Media Contact:
Greg Hernandez (202) 898-6984
Cell: (202) 340-4922
Email: ghernandez@fdic.gov

The Federal Deposit Insurance Corporation (FDIC) is calling upon consumers across the nation during America Saves Week to  consider establishing a basic savings account or boosting existing savings. FDIC Chairman Sheila Bair said, “One fundamental lesson of the financial crisis is that savings can help families withstand sudden changes in their economic well being. Establishing a savings account in a federally insured institution is a great first step to build wealth and begin a savings habit that will last a lifetime.”

The personal savings rate rose to 4.6 percent in 2009 from 2.7 percent in 2008, according to the U.S. Department of Commerce. “I am pleased to see that people are saving more of their hard-earned money and building wealth. Having personal savings for an emergency fund or saving for a future expenditure, such as a college education, can make a big difference in avoiding other costly alternatives. I’ve always been a big advocate of a back-to-basics approach to financial services; it’s my hope that Americans’ increase in savings is the beginning of a long-term trend,” Bair said.

“Money saved by consumers also provides a stable source of funding for investments in the economy that benefit all Americans,” said Bair. “In fact, a country with robust savings generally has more capital to fund investments and support economic growth over the long-term. As demonstrated recently, it is harmful to an economy when consumers spend beyond their means, financed by debt that they cannot afford to repay.”

Man, things are not looking good. And for those who are interested, here are the number of  FDIC “problem banks” over time, now in convenient chart format!

That’s a lot of liabilities. Oh yeah, and their reserves just went negative, so they’re basically broke. Hooray!

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Written by pavanvan

February 24, 2010 at 10:32 pm

Finally, a US Bonus Tax

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This is good news, even if it does fall short of anything one could describe as “punitive” toward the banks. The plan, I guess, is that Mr. Obama collects $90 billion over the next decade (that’s $9 billion per year) from the 50 banks he deems were “most responsible” for the late crisis.

At one point, Mr. Obama channels Michael Moore:

“We want our money back and we’re going to get it,” Obama said. “If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to pay back every cent they received from taxpayer.

Right. And while this $90 billion (over ten years) may go some distance in repaying the $2,000,000,000,000 we printed as a result of this imbroglio, I seriously doubt it’ll cover the tab. Mr. Obama seems to follow the strictest definition of “borrowed” imaginable – he only counts the TARP program (you remember, the first $700,000,000,000 back in November ’08), and not the trillions we’ve simply distributed as behind-the-scenes gifts.

The Washington Post sums it up in a quote:

The new big-bank tax is just like charging a nickel sin tax on a half-gallon of cheap liquor — it may make moralists feel good, but it doesn’t do much to stop bad behavior,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, which tracks regulatory issues for financial industry clients.

Exactly. I would hasten to compare this half-assed bonus tax to the one recently levied in Britain and France (50% of all bonuses, whether or not your bank received a bailout). These taxes have a punitive element to them that the US counterpart completely lacks. What, are we supposed to feel good because our government finally worked up the nerve to ask for some of the money back? The towering levels of fraud and malfeasance perpetrated by our financial sector deserves, I think, a little more than a light admonishment and the extraction of a promise of repayment.

As always, any talk of “financial regulation” and “congressional oversight” (let alone “repayment”) mean absolutely nothing without mentioning the Glass-Stegall Act. You know, that rule they made after the Great Depression that said “commercial” and “investment” banks must be separate entities? The one whose repeal in 1999 allowed our banks to assume epic risk, gamble away people’s 401(k)s, and eventually bring the whole system down? Yeah, that one. If we don’t correct the shoddy legislation that allowed this crisis to happen in the first place, we’re just setting ourselves up for another one however many years down the road.

Written by pavanvan

January 15, 2010 at 12:49 pm

Dow Overvalued

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Zero Hedge gives us yet more evidence that the Dow is overvalued: industry insiders are selling stock 82 times faster than they’re buying it.

In the most recent data set, $11.6 million in stock was purchased by insiders, while a whopping $957 million was sold. And somehow pundits are still spinning this mass orchestrated sell into the bid by those in the know as a bull market.

For significant holders of stock, now might be the time to unload.

Written by pavanvan

December 9, 2009 at 9:32 pm

Too big

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I know I’m somewhat late to this party, but I wanted to point out to all who are still unaware that the ‘too big to fail’ banks which caused our late crisis are even bigger.

JP Morgan, AIG, Citigroup, Goldman, and Bank of America were the winners of Geithner-Paulson’s free money giveaway (with Lehman a bad loser), and together they have swallowed the hundreds of small and medium banks that have failed since. They now present an even bigger and more systemic risk, should they choose to gamble away their money once again.

Despite repeated calls from almost every respected economist (notably Joseph Stiglitz) that these banks are a menace, Lords Geithner and Bernanke have done nothing to restrict their size – indeed, they have made them impossibly more dangerous and lucrative.

Furthermore, none of the incentives which led to such reckless gambling (ludicrous bonus packages, easy credit, low intrest, short-term rewards) have been addressed, and instead have been reinforced.

The next bailout will have to be 700 trillion instead of a mere 700 billion.

Written by pavanvan

November 30, 2009 at 10:06 pm

Failed Bank Fridays!

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I missed the last three failed bank Fridays, so here are all seventeen that failed in the past three weeks in a row. As always, from the FDIC:

Pacific Coast National Bank San Clemente CA 57914 November 13, 2009 November 18, 2009
Orion Bank Naples FL 22427 November 13, 2009 November 17, 2009
Century Bank, F.S.B. Sarasota FL 32267 November 13, 2009 November 18, 2009
United Commercial Bank San Francisco CA 32469 November 6, 2009 November 9, 2009
Gateway Bank of St. Louis St. Louis MO 19450 November 6, 2009 November 9, 2009
Prosperan Bank Oakdale MN 35074 November 6, 2009 November 9, 2009
Home Federal Savings Bank Detroit MI 30329 November 6, 2009 November 9, 2009
United Security Bank Sparta GA 22286 November 6, 2009 November 9, 2009
North Houston Bank Houston TX 18776 October 30, 2009 November 3, 2009
Madisonville State Bank Madisonville TX 33782 October 30, 2009 November 3, 2009
Citizens National Bank Teague TX 25222 October 30, 2009 November 3, 2009
Park National Bank Chicago IL 11677 October 30, 2009 November 3, 2009
Pacific National Bank San Francisco CA 30006 October 30, 2009 November 3, 2009
California National Bank Los Angeles CA 34659 October 30, 2009 November 3, 2009
San Diego National Bank San Diego CA 23594 October 30, 2009 November 3, 2009
Community Bank of Lemont Lemont IL 35291 October 30, 2009 November 3, 2009
Bank USA, N.A. Phoenix AZ 32218 October 30, 2009

Written by pavanvan

November 21, 2009 at 4:16 am

This Week in Failed Banks

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Show me the money!


Bank Name

City

State

CERT #

Closing Date

Updated Date

Flagship National Bank Bradenton FL 35044 October 23, 2009 October 23, 2009
Hillcrest Bank Florida Naples FL 58336 October 23, 2009 October 23, 2009
American United Bank Lawrenceville GA 57794 October 23, 2009 October 23, 2009
Partners Bank Naples FL 57959 October 23, 2009 October 23, 2009

Written by pavanvan

October 24, 2009 at 1:12 am

This Week in Failed Banks

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Three this week, including one from my home state. Who says the recession is over?

Via the FDIC:


Bank Name

City

State

CERT #

Closing Date

Updated Date

Southern Colorado National Bank Pueblo CO 57263 October 2, 2009 October 2, 2009
Jennings State Bank Spring Grove MN 11416 October 2, 2009 October 2, 2009
Warren Bank Warren MI 34824 October 2, 2009 October 2, 2009

Written by pavanvan

October 4, 2009 at 1:51 am