As Jake already reported America will take a leap of faith by providing unlimited power to the treasury to backstop FNM and FRE. Question is will we walk away from this better off or not?
Another question: Why are banks being seized on Friday and reported about on Saturday?
http://www.cnbc.com/id/25864183
http://www.marketoracle.co.uk/Article5594.html
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For sure it’s a bad sign that I’ve started looking for the news of the latest bank closing on Fridays at 5 pm. It’s becoming a pattern. It also irritates me that the FDIC “arranged” the private sale of these two banks to another party. What is up with these private sales? I personally subscribe to your theory GW, that the private sales will serve to mask the continued consolidation in the sector. I know our financial system needs to function and to survive, but I don’t trust the parties involved.
I think the private sales are a way of not creating mass panic!
I agree with that too GW.
Boca,
Looks like we have entered a new phase in banking….
Hey guys, I’m disturbed by this as well, but it is really no where near as severe as the number of banks closed during the savings and loan crisis.
Shed,
Give it time.
_
Could be Jake. I’m just saying, “It ain’t until it is.”
Wood,
Jake is right. This is just getting started. The FDIC called for at least 2-300 failures. Usually the gov. reports on 1/2 to 1/3 the actual number.
More importantly ALT A is on par with sub prime. Throw in massive losses on credit card defaults and well you get the point.
GW- without grabbing a link with firm numbers, my memory says that roughly 2500 banks failed during the SnL crisis.
Double the number the government has given us and it is only 1/4 of the SnL crisis.
So I reiterate, it is no where near as severe.
Wood,
They are saying total failures of 2-300…If it is only half to one third it is not as severe as numbers are concerened, but total losses will be much greater.
The losses back then totaled $150-$160 billion.
The problem is will this cause chain reactions since eveyone holds the same cards?
Also you must consider a run on the dollar due to mounting losses from those failures due to connectivity.
We are insolvent within our fractional banking system.
Remember this is a global problem as compared to the isolation of the S&L problem.
GW- FDIC ran a full page ad in the KC STAR today to re-assure[sic] customers of its safety and soundness. I’ve never seen that before. Odd No.
I’ll see if I can take a pic of it and post.