[seahorse]

Two more banks closed by the FDIC tonight. See the pattern I keep harping about? FDIC always closes banks on a Friday night after COB. Get your damn money out of the banks before Friday! Read the lessons learned from the ANB failure I posted back in March under the planning forum.

The two failed banks are the First National Bank of Nevada and The First Heritage Bank of Newport, CA.

FDIC homepage

Just when some Fed Dumbass was poo-pooing the idea that there would be any more bank failures. I wish I could find the link.

[copious.abundance]

Never heard of 'em.

*shrugs*

[Homesteader]

Never heard of 'em.

*shrugs*

No I guess not, seeing as you live in Seattle.

[seahorse]

Never heard of 'em.

*shrugs*

Really? Now that's surprising. What about Indymac? Ever hear of it? Did you hear the FDIC closed it too?

FDIC closes Indymac

What about this bank closed by the FDIC in May, did you hear about that one?

FDIC press release

What about ANB closed in April by the FDIC, did you hear about that one?

FDIC closes ANB

What about the FDIC taking over this bank in Missouri in March of 08? Did you hear about this?

FDIC press release

Did you know that the FDIC has increased the number of employees in anticipation of more bank failures?

There have been five bank failures since February 2007 following an uneventful more than two-year stretch. The last time the agency was hit hard with failures was during the 1990-1991 recession, when 502 banks failed in three years.

Analysts see casualties rising, but don't believe they will reach early-1990s levels.

Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration coming from states such as California and Florida where an overheated real estate market is in a fast freeze.

MSNBC

Hey Oilfinder, the biggest news is this, get ready, the Federal Gov't is passing a bill so that the taxpayers will have to bail out the two largest banks in the frickin world, Freddie and Fannie, which hold more than $5 trillion in mortgages. Did you hear about that yet? Are you ready to shell out some more of your hard earned money on that one?

You need to quit looking for all that oil in the deep waters of Brazil and start reading the local papers. There's a lot of interesting stuff going on in the banking sector.

[copious.abundance]

I'd heard of Indymac, but not the others. Not sure if Freddie and Fannie are actual "banks," but I suppose you could call them that if you wanted to.

This won't be the first time a bunch of banks have failed. And it won't be the last, either. Oh well.

[Homesteader]

Geez, I dunno SH, maybe we should stop feeding the troll.

[Tyler_JC]

We had hundreds of bank failures every year in the 1980s and 1990s.

The S&L Crisis. It cost taxpayers $150 billion over the course of the whole thing.

This crisis will probably cost of twice that when it's all said and done.

It sucks, but it's not the end of the world.

[seahorse]

Geez, I dunno SH, maybe we should stop feeding the troll.

I hear you homesteader, but Oilfinder knows I'm not really talking to him. My post was intended for anyone new to this site that may not realize that Oilfinder has never found any oil and is not in the oil industry. They may not realize that everything he says and does is, well, for purposes of deception.

I am impressed, though, that he's heard of Freddie and Fannie.

This won't be the first time a bunch of banks have failed.

You see, this is classic obfuscation by our man Oilfinder, as it is the first time that Freddie and Fannie have ever failed! There have never in history been any such institutions who's failure could sink the US and world economies. It is unprecedented. The scale of the insolvency dwarfs any failure during the Great Depression. We are in uncharted waters. Its time to quit looking for oil my man, and worry about more pressing needs at home.

[yesplease]

This won't be the first time a bunch of banks have failed. And it won't be the last, either. Oh well.

First time we've had this many banks fail in the first half of the year in a long time. Six years in fact. We only have to see a mere ~100+ more bank failures during the second half to reach what was last seen in the mid-eighties after the S&L scandal.

[roccman]

This crisis will probably cost of twice that when it's all said and done.

Ummm...twice...you sure...why not 1.5 times or 3.7 times.

Tyler - really bro...if you are gonna take the time to hit send...at least back it up with something.

Most everyone who is anyone has said we are in for a flat out systemic failure of global proportions.

Care to make another bet?

[DantesPeak]

We had hundreds of bank failures every year in the 1980s and 1990s.

The S&L Crisis. It cost taxpayers $150 billion over the course of the whole thing.

This crisis will probably cost of twice that when it's all said and done.

It sucks, but it's not the end of the world.

Bill Gross and some others estimated the cost of mortgage related losses at $1 trillion, which I think is roughly about right. Considering that F & F are about to be fully subsidized by the federal government, I expect most of those losses to charged to the US taxpayer. So this is probably six times as bad as the S & L crisis in dollar terms, maybe four times as bad inflation adjusted.

The multipler effect on the economy will then be four times worse. The long and deep recession we are falling into has only just begun.

On another issue, the assets of the FDIC will be depleted very fast if most of the 90 problem banks go under too. Just these two relatively small failures cost the FDIC almost $1 billion.

As a per cent of assets, these two and IndyMac have seen their balance sheet suddenly worth 30% less when the FDIC takes over.

It may turn out that Bill Gross will be considered to have been very optimtisic estimating about only $1 trillion in losses.

Mutual of Omaha Bank Acquires All Deposits of First National Bank of Nevada and First Heritage Bank, N.A.
All Insured and Uninsured Deposits Transferred to Acquiring Bank

FOR IMMEDIATE RELEASE
July 25, 2008

The cost of the transactions to the Deposit Insurance Fund is estimated to be $862 million.

FDIC

[seahorse]

The S&L Crisis. It cost taxpayers $150 billion over the course of the whole thing.

This crisis will probably cost of twice that when it's all said and done.

It sucks, but it's not the end of the world.

Tyler, your figures are way off. The bailouts began in 07. They have already costs over $400 billion dollars.

Last Wednesday, Federal regulators agreed to let Fannie Mae and Freddie Mac take on another $200 billion in subprime mortgage debt.

This is in addition to the $200 billion in Treasury notes the Federal Reserve announced it will loan to bail out bond dealers who are stuck with mortgage-backed securities and other collateralized debt obligations (CDO's) that they can't resell on the secondary market. (See Fed $200 Billion Loan Probably Won't Help)

What It Means to You
If Fannie, Freddie and the Fed get stuck with the $400 billion in bad debt, then this will cost three times as much as the Savings and Loan Crisis, which "only" cost the taxpayers $124 billion.

Feb Bailout

News

Further, many now believe banking losses will reach a trillion dollars, including the infamous Bill Gross.

Bill Gross of the San Diego-based bond house, Pacific Investment Management Co (Pimco), has joined the trillion dollar club. That is, he’s now predicting $US1 trillion in mortgage losses in the United States.

Business Spectator

[heroineworshipper]

Fortunately we'll only be subsidizing houses in Nevada instead of those worthless $1 million shacks in Stockton. Those are the worst. Why does your government insist in making us subsidize worthless $1 million shacks Stockton when no-one out there can even afford a nanostudio apartment?

It's like living under Stalin and having to artificially sustain $1 million loafs of bread to protect the collectivization investors.

[yesplease]

Tyler, your figures are way off. The bailouts began in 07. They have already costs over $400 billion dollars.

So those loans weren't loans?

What It Means to You
If Fannie, Freddie and the Fed get stuck with the $400 billion in bad debt, then this will cost three times as much as the Savings and Loan Crisis, which "only" cost the taxpayers $124 billion.

Feb Bailout

If.... Yes. But that's a pretty big if. So, they haven't cost $400 billion, unless the Fed can't get any of that back. Only time will tell. Also, the author forgot about inflation. I'd given up every single one of my 2008 dollars if I knew I would get early 1980s dollars.

Further, many now believe banking losses will reach a trillion dollars, including the infamous Bill Gross.

Bill Gross of the San Diego-based bond house, Pacific Investment Management Co (Pimco), has joined the trillion dollar club. That is, he’s now predicting $US1 trillion in mortgage losses in the United States.

Business Spectator

And many believe it will be less. Although unlike the S&L crisis, this looks like it will incur much larger losses throughout the world economy. Offhand I'm guessing that adjusted for inflation it'll cost about what the S&L scandal did for the taxpayer but losses worldwide will be higher.

[seahorse]

Yesplease,

Now, I have to admit I'm not up on my history, but did Freddie and Fannie fail during the S&L crisis? Is this their first or second failure? If this is their second failure, then I apologize for waiving my arms. In that case, this will be just like the S&L crisis.

Also yesplease, I said Tyler's figures of losses at $150 billion were too low and should be $400 billion, but, in defending Tyler, you link me to an article showing I was way too low. Your article estimates losses at $600 billion.

Financial firms will likely see their losses reach at least $600 billion as the crisis triggered by the collapse of subprime mortgages batters banks, brokers and insurers, UBS AG analysts said.

yesplease article

Even more interesting is that article you linked was written in Feb of 2008, one month before the Fed bailed out Bear Sterns bc of a feared "systemic collapse" of the entire financial system and a scant few months before Paulson pushed a bailout of Freddie and Fannie for the same reason. So, I wonder what those guys estimating 600 billion of losses in Feb of 08 would estimate now?

[Jotapay]

Geez, I dunno SH, maybe we should stop feeding the troll.

I've had him on ignore for months.

[copious.abundance]

Geez, I dunno SH, maybe we should stop feeding the troll.

I hear you homesteader, but Oilfinder knows I'm not really talking to him. My post was intended for anyone new to this site that may not realize that Oilfinder has never found any oil and is not in the oil industry. They may not realize that everything he says and does is, well, for purposes of deception.

I'm actually doing these newcomers a favor, by giving them information contrary to the "we're dommed!" view so prevalent on this forum.

It is you who are deceiving everyone, by telling everyone everything is on the verge of collapse, when it isn't.

This won't be the first time a bunch of banks have failed.

You see, this is classic obfuscation by our man Oilfinder, as it is the first time that Freddie and Fannie have ever failed!

Well whoop-tee-do. When Continental Illinois, one of the 10 largest US banks, failed in 1984, it was the first time Continental Illinois had ever failed.

So what?

There have never in history been any such institutions who's failure could sink the US and world economies. It is unprecedented. The scale of the insolvency dwarfs any failure during the Great Depression. We are in uncharted waters. Its time to quit looking for oil my man, and worry about more pressing needs at home.

Gee seahorse, maybe you should quit being so understated.

Care to make any bets?

[Twilight]

seahorse, look on the bright side. This time it is his money, and as a foreigner I will be taking my cut.

[skeptik]

I'd heard of Indymac, but not the others. Not sure if Freddie and Fannie are actual "banks," but I suppose you could call them that if you wanted to.

This won't be the first time a bunch of banks have failed. And it won't be the last, either. Oh well.

Calling Fannie and Freddie banks is misleading. You can't open a checking or a deposit account with either. Officially Fannie and Freddie are GSE's - Government Sponsored Enterprises - set up by act of Congress, but with private shareholders. They are mortgage dealers designed to supply liquidity to the mortgage market - not banks.

[seahorse]

I'm actually doing these newcomers a favor, by giving them information contrary to the "we're dommed!" view so prevalent on this forum.

Oh, you think the doom rumors are traced back to PO.com? That's because you don't listen to the news. Turn on the news and just listen to Bernanke, he's chairman of the Federal Reserve Bank. The financial doom is traced back to his own testimony:

Given the exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain," Bernanke told the Senate Banking Committee.

Bernanke Testimony

The doom also originates from Paulson who told Congress that shoring up Freddie and Fannie was necessary to protect against future systemic risk - ouch.

Third, to help protect the financial system from future systemic risk,

[url=http://www.marketwatch.com/news/story/secretary-paulsons-testimony-fannie-mae/story.aspx?guid={6C8CA322-E01E-4A28-AC1C-790DE369CC86}]News[/url]

It is you who are deceiving everyone, by telling everyone everything is on the verge of collapse, when it isn't.

Its not? Why did Paulson and Bernanke tell Congress they needed to bailout Bear Sterns to avoid a potential meltdown of the system?

Why did Paulson tell Congress we need to give him the taxpayers checkbook to bailout Freddie and Fannie?

Do I believe you or Paulson and Bernanke?

Now, do I want to bet? Will you shake my hand in person on it?