1000+ Bank Failures?

[eagleseven]

Failed banks tend to be smaller and private, which exacerbates the problem for small business borrowers, said Kanas, who became CEO of BankUnited when his firm bought the bank and is the former chairman and CEO of North Fork bank...

...This comes at a time when the FDIC has established new rules on bank sales. Private equity, for instance, would have to hold double the capital of their competitors in order to buy such an institution, said Kanas.

“This will have somewhat of a chilling effect on our participation,” he said. “As a result of having to keep higher capital levels, we’ll see lower prices coming from that sector.”

Of the 81 failed banks this year, two have been successfully acquired by private equity, he said. Kanas’ private equity firm bought UnitedBank, the failed Florida-based bank, from the FDIC in May. Regulators also allowed the sale of IndyMac Bank of California earlier this year.

It seems that the government's salve on the Financial Sector is wearing thin, and the underlying vulnerabilities plaguing our system still remain.


If this trend holds true, 2010 will be a very scary year...

1,000 Banks to Fail In Next Two Years: Bank CEO - Private Equity and Hedge Funds * US * News * Story - CNBC.com

 

[Caroljo]

The banks aren't handing out loans like they used to - they're scared of what's going to happen! We used to be able to go into a bank and get a loan pretty easily. Even having a couple dings on our credit report. We just used some of our 401k to pay of a couple big credit cards, it needed to be done and we thought it would help our credit doing this. Well it didn't....we need a second car before winter. Our own bank turned us down and we've paid off 3 loans from them! It's because our credit report wasn't perfect. They won't even loan any money now without collateral either.
We went yesterday to a big car dealer that always gets people financed. We were there for 4 hours + and won't know until Monday if they could get us finance..and we're trading in our 1984 Vet!! Just that morning we heard a salesman say that 6 sales fell through just that morning because they couldn't get people financed! I told the guy helping us if we'd know it was going to be this hard we wouldn't have paid off those bills and used the cash for a car! He agreed! Banks just don't want to stick their necks out at all anymore...

 

[Ame®icano]

Banks are not gonna land the money for the following two to three years when last ARM's should kick in. Those banks that survive that period will be back on the track and start landing money again.

 

[Toro]

1000 banks failed during the S&L crisis. It is not unreasonable to assume it will happen again.

However, there are 8,000 banks in America. Of the 525 publicly traded banks in this country, most are profitable.

 

[Vast LWC]

US Receives a Profit from Bank Bailouts!!!

As banks repay bailout cash, U.S. sees a profit
Early returns of 15 percent annually for TARP received as welcome surprise

By Zachery Kouwe
updated 4:55 a.m. ET, Mon., Aug 31, 2009

Nearly a year after the federal rescue of the nation’s biggest banks, taxpayers have begun seeing profits from the hundreds of billions of dollars in aid that many critics thought might never be seen again.

The profits, collected from eight of the biggest banks that have fully repaid their obligations to the government, come to about $4 billion, or the equivalent of about 15 percent annually, according to calculations compiled for The New York Times.

Was this thread some sort of attempt at a pre-emptive strike at the good news coming from the banking industry?

 

[Ame®icano]

Actual profit is 5%. Remaining percentages are penalties for returning the money ahead of contract (5 years).

Do you have a data how much money US profited by buying bad CDS's and bailing out Funny & Fredie, AIG and car companies?

 

[Vast LWC]

Actual profit is 5%. Remaining percentages are penalties for returning the money ahead of contract (5 years).

Do you have a data how much money US profited by buying bad CDS's and bailing out Funny & Fredie, AIG and car companies?

Profit is profit. The banks in question returned the money ahead of time to avoid paying MORE money in interest to the government. In other words, if they didn't pay those penalties, the government would have profited MORE.

As far as the rest goes, we won't know that for quite a while. Everything seems to be working out so far though.

 

[eagleseven]

Was this thread some sort of attempt at a pre-emptive strike at the good news coming from the banking industry?

$68 billion repaid, $632 billion to go! It looks like your article is cheer-leading for the economy, exaggerating the good news.

Your article fails to mention that, at this rate of return, it will take 10 years for TARP to be repaid...and that is assuming nothing bad happens in the next decade.

 

[Vast LWC]

Was this thread some sort of attempt at a pre-emptive strike at the good news coming from the banking industry?

$68 billion repaid, $632 billion to go! It looks like your article is cheer-leading for the economy, exaggerating the good news.

Your article fails to mention that, at this rate of return, it will take 10 years for TARP to be repaid...and that is assuming nothing bad happens in the next decade.

The 632 billion was mostly invested in stock in the financial institutions in question.

The point is that that stock is returning dividends.

If you buy a stock for say $100.00, and you get a dividend on that stock because the corporation is doing well, you still have the original $100.00 worth of stock.

If the government's investment is bringing us profit, why would we want them to take their money back?

 

[Ame®icano]

You got no clue of what you're talking about.

Yes, there are dividends. For example, for your $100 you can buy around 5 shares of Bank of America (they got $45B from TARP). Their annual dividend is $0.04 (4 cents), or 0.24% per share. If you look at the interest that taxpayers pays for borrowed money (whatever prime is), we still lose, big time. You could buy 20 shares of Citigroup (received $50B from TARP) , but their dividend is suspended.

Second, there is $700 billion spent on bailing out banks and others. Some money is returned with interest & profit, some will never be. There is also around $1 trillion that government printed and injected into system thru buying "toxic assets" from the banks. That money will mostly be lost, unless we have another real estate bubble where property prices would rise at least double from the mark they were before this crisis. Do you think thats possible?