Financial markets and the three bears (FDIC has 90 banks on "troubled" list)

[UpInArms]

Source: Reuters

LONDON (Reuters) - With the Goldilocks economy long gone, investors this week will wrestle again with the three bears of financial markets -- banking woes, slow-to-stagnant economic growth and rising inflation.

<snip>

The FDIC is hiring more staff in preparation for further failures and has upped its list of troubled banks to 90.

Over the past weeks, MSCI's main world equity index and U.S. indexes have joined European and Japanese counterparts in bear market territory, falling at least 20 percent from recent cycle peaks as investors fret about the drag on growth from escalating oil prices and the abrupt withdrawal of credit from indebted consumers.

<snip>

"The high level of leverage extended to both consumers and investors against a now depreciating asset alongside lax lending standards make a rise in default rates beyond all previous experience likely in most major Anglo-Saxon economies," said Steven Pearson, chief strategist at Bank of Scotland Treasury.

"The epicentre of the crisis therefore shifts from investment to commercial bank balance sheets."

Read more: http://www.reuters.com/article/businessNews/idUSL1222156820080713?feedType=RSS&feedName=businessNews&sp=true

---

transferring the crisis to the next lower level of the ladder will be the natural steps (and there will be lots more steps downward) of the monster that was created - we (this generation) do not not how low this will go before it is all over

:scared:

[Ichingcarpenter]

1. Next Week is gonna be one of the worst weeks for the market

Many analysis are scared shitless because of the Financial Markets are
reporting their earnings. I'm getting predictions from independent analysis
from a three hundred to 1000 point drop by the end of the week.

Hang on tight next week it will be rough.

[truthisfreedom]

3. It's dropping below where it started when bush took office?

And those rethuglicans claim to be so smart! Freakin' weasels.

[Ichingcarpenter]

4. Actually its lower in you look at the value of the dollar in 2000 vs 2008

which should also be taken into consideration for any comparison


I

[bulloney]

13. Your friendly neighborhood Republicans! The folks that brought you the Great Depression!

And many other ensuing recessions.

And yet, many people and the media gerbils will argue that Republicans are associated with a history strong economic policies.

Just ask Sen. Phil "It's all in your head" Gramm.

[dixiegrrrrl]

21. Betcha they were responsible for The Great Hunger also

and the Brady Bunch

and ABBA

most certainly Lawrence Welk

Don Ho

Liberace

[Warpy]

5. yeah, I know, and the trend will be down

until the GOP has been gone for at least 6 months and new regulatory steps have been taken.

Those are pretty big ifs, and my guess is that it will take much longer than that for the market to stabilize, let alone recover.

Remember, all those creatively financed jumbo loans will start to reset next year and continue to reset through 2010 in large enough numbers to provide the banks and brokerages with cold sweat and nightmares while frightening off investors.

Unless the thieves are regulated out of business and the offshore conduits used by totally unregulated hedge funds are closed, the market can't begin to recover.

We are simply going to be in a world of suck for the next few years while our fine leaders figure out how to extract their thumbs from their bums and take action which will displease the people who have been bribing them for the last four decades.

[CatholicEdHead]

11. The rocky road starts this evening (CT, ET) when the Asian markets open up

The SMW thread tomorrow should be pretty big.

[Nothing2SeeMoveAlong]

18. They Will Try To Prevent It

Everytime there is some monumentally bad story, the market seems to somehow respond with an up day.

I bet in the back of their minds, they have a plan to blame someone, if it all falls apart soon. That's all these A&^HOLES do, BLAME BLAME BLAME!!

You can be sure they won't accept any responsibility. And as always, remember, if they say something, it's the exact opposite. If they say everything is fine with Fannie & Freddie, you can bet they're going under in the next couple of weeks.

[nancyr]

2. Wonder which banks are on the list of 90?

[Tutonic]

6. Citigroup is probably not one but should be. They made a lot of

extremely risky loans in US and overseas during the last ten years. Poor management at top of that organization. If they fail--get all of your money from banks, investment companies, etc., because it will indicate that B of A and Wells Fargo did the same.

[Dr.Phool]

7. I' saw a list of ten a couple of moths ago.

At the time, four were Ohio based. National City, Key, Fifth Third, and I forget the fourth.

My wife used to work for Key, and had a 401k with them that was mainly in Key stock. We cashed it out immediately, and paid the 20% withholding (no penalty, because she's 59 1/2. The payout was based on the next days closing price. Within the next week, it plunged over 50% and is now down about 70%.

Whew!

[bulloney]

14. The other may be Huntington. Their stock value has been in a free fall the past 6 months.

While this was going on, they were buying out another prominent Ohio banker, SkyBank.

Where do you come up with the capital to buy out another bank when you're in such financial trouble?

Another symptom of our deregulated markets, I would presume.

[Dr.Phool]

19. That was it. Huntington.

Thanks for refreshing my memory.
:hi:

It's tough getting old.

[flashl]

8. A starting place to look ...

FDIC - July 2008 List of Banks Examined for CRA Compliance
Monthly List of Banks Examined for CRA Compliance

[spotbird]

9. They may be on this list

http://www.thestreet.com/tsc/ratings/screener.html

[Ichingcarpenter]

10. IndyMac collapse wiped out 10% of the FDIC insurance fund.

Here’s a scary thought. According to the Wall Street Journal and CNN, the failure of IndyMac, the second largest federally insured financial institution ever to fail, will cost FDIC approximately 10% of its insurance fund.
http://online.wsj.com/article/SB121581435073947103.html?mod=googlenews_wsj
http://money.cnn.com/2008/07/12/news/companies/indymac_fdic/index.htm?postversion=2008071210



FDIC is the backstop, the guarantee to depositors at banks that there will not be a repeat of the Great Depression, when bank runs wiped out banks and depositors alike.

Keep an eye on the amount of damage the FDIC takes per bank loss. Keep a tally.

Right now, the FDIC is out somewhere between $4 billion and $8 billion due to IndyMac. This is out of its insurance fund of $53 billion.

If the FDIC’s insurance fund drops below $10 billion watch out.

[pa28]

16. Will be interesting to watch the big ones next week.

Wachovia, Wamu and UBS.

Just saw an ad on CNBC pointing out that UBS was "committed to being one of the world's best capitalized banks" and though "uh oh". Seems like a good time to make sure your deposits are under the 200,000 FDIC limit for couples and 100k for individuals if you are fortunate enough to have that problem.

[Paula Sims]

17. The insurance is for 100k per SSN

If you own 100k and you own joint with spouse at 200k, you personally are only insured up to the 100k and you could lose the other 100k. It's NOT 100k per account. Check out the details on the FDIC's web site http://www.fdic.gov/deposit/deposits/insuringdeposits/

[Ichingcarpenter]

20. Not like I have to worry about 100k .... besides my bank

was bought out recently by a Dutch Bank, which is solid in Europe and I don't have 100k in it.

You have great advice for those that do have dual accounts and massive savings in one bank.

It will be an interesting week with I imagine massive 'loans' to the banks by the feds.

[Phred42]

12. Where is the complete list of the 90 Banks?

The article doesn't cover it

I need to know before I make another deposit.

Help

[Paula Sims]

15. Each regulator has their own "list"

and each list has its own criteria. The FDIC one is more "serious" because it's usually the FDIC that closes the banks and sells them off (assuming there's a buyer or several buyers). Unless someone from the inside posts such info it's pretty tightly controlled.

[Doctor Cynic]

23. They don't want you to know, or all the 90 banks WILL fail tomorrow. n/t

[roamer65]

22. What's that loud, high speed mechanical sound I hear?

Ah. It's the BEP's printing presses running full stream.

(In reality its all just clicks on keyboard nowadays.)

[cliss]

24. I heard that the Asian stock market

will be extremely important to watch. I think we can start checking it Sunday night (?).

As always, ignore the desperate lies from the FED + government. Look to other sources for the real situation.

Did anyone ever watch the movie Master & Commander with Russell Crowe? Remember the scene when the sailing ship was down at the Cape Horn. It was just an unbelievable storm assailing the ship as they tried to make it around the Horn. The sails were torn, the ship was ravaged.



U.S. Economy

[Tutonic]

25. Did you ever watch the movie Titanic where Leonardo DeCaprio

dies in the frozen Atlantic? Well I think our economy is Leonardo and all of our assets are the Atlantic--frozen.

[CatholicEdHead]

26. Yep, Asian markets are open now

Watch them here

http://finance.yahoo.com/intlindices?e=asia

[Ghost Dog]

29. Nikkei up 0.6 pct, worries eased by U.S. move

Sun Jul 13, 2008 9:07pm EDT
TOKYO, July 14 (Reuters) - Japan's Nikkei average rose 0.6 percent on Monday, led by banks as investors showed their relief after the U.S. government unveiled measures to help troubled home financing providers.

Nisshinbo Industries Inc (3105.T: Quote, Profile, Research, Stock Buzz) jumped more than 10 percent after a newspaper reported the firm developed a technology to use carbon instead of platinum as the electrode catalyst for fuel cells .

Banks shares including Japan's top lender Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) rose sharply after the U.S. Treasury and Federal Reserve unveiled sweeping steps to support Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) if needed to bolster confidence in the troubled mortgage financing giants.

But market strategists said the move was likely to be a temporary boost to the market.

"It's a deja vu of Bear Sterns. The market's positive reaction is not likely to last long," said Daisuke Uno, chief strategist at treasury marketing department at Sumitomo Mitsui Banking Corp, referring to the U.S. Federal Reserve's emergency move in the wake of the near-collapse of the securities firm in March.

/... http://www.reuters.com/article/marketsNews/idCAT15755320080714?rpc=44

[skoalyman]

32. yep I noticed oils above 145 we may see 150+ this week

:crazy:

[Ghost Dog]

27. Dollar up, bonds fall on US help for Fannie, Freddie

Sun Jul 13, 2008 6:50pm EDT
TOKYO, July 14 (Reuters) - The dollar edged up while U.S. Treasuries fell in Asia on Monday after the U.S. Treasury and Federal Reserve launched sweeping measures to assist embattled mortgage lenders Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz).

The euro slipped to $1.5906 <EUR=>, down 0.2 percent from late U.S. trade on Friday, after the euro zone single currency climbed to a three-month high of $1.5972 in early trade -- within half a cent of the record peak of $1.6020 struck in April.

September 10-year Treasury futures TYv1 fell 15.5/32 to 113-30/32. Treasuries extended losses from Friday that were fuelled on worries about more U.S. government debt supply to help the mortgage companies, as well as investors switching in agency bonds from Treasuries.

/. http://www.reuters.com/article/marketsNews/idINTKW00299220080713?rpc=44

[Ghost Dog]

28. US STOCKS-Futures rise on US help for Fannie and Freddie

Sun Jul 13, 2008 7:34pm EDT
NEW YORK, July 13 (Reuters) - U.S. stock index futures rose on Sunday after the U.S. Treasury Department and the Federal Reserve announced sweeping steps to support embattled mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) if needed to bolster confidence and head off potential steep declines in global financial markets.

The Fed said the two pillars of the U.S. housing market could access its discount window for emergency cash while the Treasury said it would temporarily increase its line of credit to the two, as well as purchase equity in them, if necessary.

The move by the Fed echoed its emergency action to help rescue investment bank Bear Stearns in March, when it opened the discount window to investment banks for the first time since the Great Depression.

The statement lifted futures, which now indicate that Wall Street may rise at the open on Monday, following a harrowing week in which the stock market was pummeled amid fears of capital constraints at the two government-sponsored enterprises.

/... http://www.reuters.com/article/marketsNews/idINN1338684920080713?rpc=44

:eyes:

[Ichingcarpenter]

30. The quarterly Reports for the Financials don't start happening until tomorrow

and will continue for the week after. Just the calm inside of the eye of the hurricane.
The move by the Feds will ease fears but when the reports start coming in, the wind will start blowing and
pick up speed.

[Ichingcarpenter]

31. 150 Banks by the end of the year.... NYTimes-

The nation’s banks are in far less danger than they were in the late 1980s and early 1990s, when more than 1,000 federally insured institutions went under during the savings-and-loan crisis. The debacle, the greatest collapse of American financial institutions since the Depression, prompted a government bailout that cost taxpayers about $125 billion.

But the troubles are growing so rapidly at some small and midsize banks that as many as 150 out of the 7,500 banks nationwide could fail over the next 12 to 18 months, analysts say. Other lenders are likely to shut branches or seek mergers.

“Everybody is drawing up lists, trying to figure out who the next bank is, No. 1, and No. 2, how many of them are there,” said Richard X. Bove, the banking analyst with Ladenburg Thalmann, who released a list of troubled banks over the weekend. “And No. 3, from the standpoint of Washington, how badly is it going to affect the economy?”

The large institutions set to report results this week, including Citigroup and Merrill Lynch, are in no danger of failing, but some are expected to report more multibillion-dollar write-offs.




http://www.nytimes.com/2008/07/14/business/14bank.html?partner=rssnyt&emc=rss