11.01.2009 original publish date
10.17.2013 update, broken link repair where avail, data, format update
05.12.2020 repaired broken link
A Look at the Banking Data
original article written by Net Advisor™
WASHINGTON DC. There were 21 government business days in October 2009. Columbus Day is a Federal Holiday. There were 20 banks taken over by the FDIC in October 2009, alone. Thus, a bank failed about one every day in the month of October, the biggest increase in bank failures since 1992 (Source: FDIC).
Trick or Treat?!
“U.S. authorities seized nine failed banks on Friday, the most in a single day since the financial crisis began and the latest stark sign that substantial parts of the nation’s banking industry are being crippled by bad loans.”
— Source: Reuters, 10.31.2009
It is definitely not a trick or a treat when the FDIC comes and shuts you down. If one takes a look at the FDIC’s website and then corresponds the close dates to a calendar, most all the failed banks are closed on a Friday, after the bank is officially closed, when the stock market is closed, when everyone is home for the weekend, including some of the media.
The FDIC is reportedly frustrated about the public’s perception about hearing all of this bad (reality aka the truth) about news coverage, which rarely ever gets reported on the TV news any more (Line out = Story link moved or deleted by ABC News, unable to recover link).
Can you imagine if every working day in October, you heard on the tv news, “another U.S. bank has failed today.”
FDIC Bank Failure Stats:
- # of bank failures (2007): 3
- # of bank failures (2008): 28
- # of bank failures (2009): 139
All that trillion dollar stimulus and $700 Billion TARP money to save the banks is working so well isn’t it? We’ll the government never intended to save all the banks. The government knows best which banks to save, and which ones to fail.
I have also discussed in my closing message last month that the Commercial Mortgage business is the next wave to get hit over the next say 3 years, and this is not going to be some side issue for the economy. It matters.
Let’s pick a couple of the early collapsing commercial mortgage lenders:
10.26.2009:
1. “Capmark Files for Bankruptcy with $21 Billion in Debt: Capmark, based in Horsham, Pennsylvania, is one of the largest U.S. commercial real estate finance companies” (Source: Bloomberg). And just 6 days later…
11.01.2009:
2. “CIT Group files for bankruptcy: The bankruptcy, one of the largest in U.S. corporate history…is also a blow for the U.S. government (the tax payer), which invested $2.33 billion in CIT in December (2008) through the Troubled Asset Relief Program (TARP) and will likely lose most of it” (Source: Reuters).
CIT is the 5th Largest bankruptcy in U.S. History:
Bigger than Enron, and just below the General Motors bankruptcy.— Source: CNN
I am not the only one who thinks that commercial real estate is going to have challenges say over the next 3 years. Billionaire investor Wilbur Ross Jr. is anticipating a “huge crash in commercial real estate.” The Atlanta Federal Reserve is also concerned about the commercial market.
“The president and CEO of the Federal Reserve Bank of Atlanta, expressed his concern that the commercial real estate sector is weakening, but said he hopes that a federal program will revive the securitization market to finance those properties.”
— Source: southflorida.bizjournals.com
Oh, you mean a bailout?
So we are starting to lose giant commercial lenders, and who is next? The people who own the property who cannot refinance the loan because of the negative loan to value (meaning, the current appraised value of the property is less than the original loan.) Does any of this sound familiar?
If we have further bank losses on that high priced commercial property (pretty much a certainty), are we going to have a bailout here too? Is the FED going to jump in and have a trillion dollar program to save the commercial market? Will Obama have a stimulus plan to get people to buy office buildings?
This Crack Stimulus program to bail everyone out is just going to create bigger economic problems for the U.S. in the future. Maybe that is what the Socialist really want? If you collapse the economy, no one but government will be left to take over and run everything.
Further Reading:
- Where the banks are failing (interactive map) (CNN)
- List of Bailed out banks (and who has paid back the TARP) (CNN, needs updating)
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Bank data source: FDIC
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