Posts Tagged ‘FDIC’
(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
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!
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.
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.
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.
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|
Show me the money!
Three this week, including one from my home state. Who says the recession is over?
Via the FDIC: