Bank Failures Continue
The bank failures are now at 95 for the year which includes three of the largest and most troubled; Guaranty Bank in Austin, Colonial Bank in Birmingham and Corus in Chicago.
A couple of Fridays ago, the FDIC shut down two more banks resulting in billions of dollars in losses.
US Bank Failures-FDIC
Expect bank failures to top 1,000 over the next 18 months, the majority being Community Banks and Regional Banks. The impact will devastate entire communities. The FDIC is running out of money and will soon have to ask for taxpayers funds. In other words, the FDIC needs a bailout to bail you, the bank depositor out…This is only the second time in the 75 year history of the FDIC that it had to do so.
Here are 7 issues that may put you into a state of deep concern.
* Personal bankruptcies may hit a record 1.4 million for 2009.
* Business bankruptcies are 250% over their previous high and still rising.
* Unemployment is at 9.7, but expected to reach 10% but the Department of Labor says real unemployment rate is 16% right now.
* Credit Card charge-offs are at 10.5% and Moody’s predicts it to reach 12%.
* Mortgage foreclosures and “walk-aways” continue at record pace.
* The Commercial Real Estate market could soon implode the same way “sub-prime residential real estate” did two years ago.
Am I scaring you yet? Here’s another one…
* Even with the $2 trillion rise in American household wealth since its recent lowest point, household wealth has lost 5 years of gains.
Consider the economic impact of this implosion. Every aspect of American life will be adversely affected; each economic category mentioned above will result in increased bank failures, increased personal and business bankruptcies, higher unemployment, higher credit card and mortgage default, not to mention the probable massive commercial real estate failures.
If anyone thinks there is going to be a full scale economic recovery across the board should have a big re-strategizing of their assets and should be hedging their bets. It’s obvious there are more brutality yet to come in the economy. If any recovery comes, it will be sporadic. Many areas will fail while some new ones will make some recovery. Getting out of this recession will not be a piece of cake. The facts above are brutal.
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Is there anyone who is benefiting for this? Seems to me that it is largely small banks suffering, leaving bigger banks to come in and pick up the business.
This recession is more like a depression in severity – I doubt they have have the traditionally powerful call on assets like they used to have.
It appears people with the knowhow will be the main beneficiaries…follow the link at the bottom of the article.
I think this is totally the fault of the system, but the question is , how can we help to those banks. By our individual efforts it can be possible i think.
I just can’t believe how depressing the past year has been! I am hopeful that we can have a fresh start in 2010. Here’s hoping…
The choice is yours. What do you want your year to be? Begin by promising yourself what you want to achieve. Set a dateline for your achievements in steps. And keep to it. Your burning desire gets you there…