Analysts say as many as 150 banks could CLOSE

[Vteckidd]

in then next 12 months!!!


As home prices continue to decline and loan defaults mount, federal regulators are bracing for dozens of American banks to fail over the next year.

But after a large mortgage lender in California collapsed late Friday, Wall Street analysts began posing two crucial questions: Just how many banks might falter? And, more urgently, which one could be next?

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?”

Many investors are on edge after federal regulators seized the California lender, IndyMac Bank, one of the nation’s largest savings and loans, last week. With $32 billion in assets, IndyMac, a spinoff of the Countrywide Financial Corporation, was the biggest American lender to fail in more than two decades.

Now, as the Bush administration grapples with the crisis at the nation’s two largest mortgage finance companies, Fannie Mae and Freddie Mac, a rush of earnings reports in the coming days and weeks from some of the nation’s largest financial companies are likely to provide more gloomy reminders about the sorry state of the industry.

The future of Fannie Mae and Freddie Mac is vital to the banks, savings and loans and credit unions, which own $1.3 trillion of securities issued or guaranteed by the two mortgage companies. If the mortgage giants ever defaulted on those obligations, banks might be forced to raise billions of dollars in additional capital.

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.

But time may be running out for some small and midsize lenders. They vary in size and location, but their common woe is the collapsed real estate market and souring mortgage loans. Most of these banks are far smaller than the industry giants that have drawn so much scrutiny from regulators and investors.

Still, only six lenders have failed so far this year, including IndyMac. In 1994, the Federal Deposit Insurance Corporation listed 575 banks that it considered to be troubled. As of this spring, the agency was worried about just 90 banks. That number may go up in August, when the government releases an updated list.

“Failed banks are a lagging indicator, not a leading indicator,” said William Isaac, who was chairman of the F.D.I.C. in the early 1980s and is now the chairman of the Secura Group, a finance consulting firm in Virginia. “So you will see more troubled, more failed banks this year.”

And yet IndyMac, one of the nation’s largest mortgage lenders, was not on the government’s troubled bank list this spring — an indication that other troubled banks may be below the radar.

The F.D.I.C. has $53 billion set aside to reimburse consumers for deposits lost at failed banks. IndyMac will eat up $4 billion to $8 billion of that fund, the agency estimates, and that could force it to raise more money from the banks that it insures.

The agency does not disclose which banks it thinks are troubled. But analysts are circulating their own lists, and short sellers — investors who bet against stocks — are piling on. In recent weeks, the share prices of some regional banks, like the BankUnited Financial Corporation, in Florida, and the Downey Financial Corporation, in California, have stumbled hard amid concern about their financial health. A BankUnited spokeswoman said the lender had largely avoided risky subprime loans.

In his “Who Is Next?” report over the weekend, Mr. Bove listed the fraction of loans at banks that are nonperforming, meaning, for example, that the assets have been foreclosed on or that payments are 90 days past due. He came up with what he called a danger zone, which was a percentage above 5 percent. Seven banks fell in this category.

An important issue for the regional and community banks will be whether they have managed to sell their riskiest loans to Wall Street firms.

And the government may have fewer failures than in the past because private investment funds might buy some troubled lenders. Regulators are considering rule changes that would allow private equity firms to buy larger shares of banks, and several prominent investors, like Wilbur Ross, have raised funds to leap in.

This crisis is real people! I dont think i have been this scared in a long time about our future as a nation. Even after 9/11 it wasnt this gloomy IMO.

Banks closing
Oil Skyrocketing
Homes foreclosing
Stock plummeting

[man]

It only becomes a crisis when people flip out over ****. If Americans weren't so stupid and actually calm down we could see an end to our situation much sooner. Freaking out just makes things worse.

[SOHC MONSTER]

If this country wasn't so wishy washy and actually planned for a better future, we would be in good shape.

Deffinetly a good find.

[ironchef]

This is going to wreak havoc on the dollar I bet, if more continue to fail. Then if the dollar gets more ****ed so will oil which in turn will **** over the rest of the economy, and it will be a never ending cycle lol. Unfortunately :(.

[TIGERJC]

*family guy voice*

O NOOOOOOOOOOOOOO

[Lucky DAWG]

If this country wasn't so wishy washy and actually planned for a better future, we would be in good shape.

Deffinetly a good find.



Exactly.



The main reason why the depression began in 1929 was because people freaked out and sold short all their stocks which cut the price dramatically, then when they saw that they withrew and over drafted all of the banks vaults, shutting them all down and any chance of people taking out credit to carry out business expenditures.



People in America live outside their means, period.



The overwhelming majority of the country has no financial plans for their future, 401ks or anything of the sort.




It is all speculation, but sadly the seed has already been planted in America's mind

[Vteckidd]

I dont think people are in panic mode yet.

Im just saying that look across the board, that everything is failing or looking bleak. This is not a short term problem, this is a long term thing.

Be educated on who you vote for because there is ALOT riding on this election, and im not just talking about the presedential race either

[tony]

Just the residual effect of bad lending practices. My sister was an underwriter for Indymac Bank, and she said she was constantly reprimanded for not approving loans that she knew were frivolous. Of course she would get written up and someone else would approve the loan only to have it default in a matter of months.

Greed has put this economy in the ****ter

[tony]

I dont think people are in panic mode yet.

Im just saying that look across the board, that everything is failing or looking bleak. This is not a short term problem, this is a long term thing.

Be educated on who you vote for because there is ALOT riding on this election, and im not just talking about the presedential race either


Oh so true, if mutha ****in Vernon Jones becomes a senator here in Georgia I will be pissed. Theres a few others on my list as well.

[Alan®]

Just the residual effect of bad lending practices. My sister was an underwriter for Indymac Bank, and she said she was constantly reprimanded for not approving loans that she knew were frivolous. Of course she would get written up and someone else would approve the loan only to have it default in a matter of months.

Greed has put this economy in the ****ter
Not in the least bit surprised. Where I used to work my managers would habitually lie on the credit apps they sent to the banks. And when I say lie I'm talking 25k a year pay increases over what they had actually put on the credit ap they submitted to me. And then I would have to go back and write a new ap to make it reflect what the aps they submitted to the banks said. Part of why I quit that place.

[tony]

Not in the least bit surprised. Where I used to work my managers would habitually lie on the credit apps they sent to the banks. And when I say lie I'm talking 25k a year pay increases over what they had actually put on the credit ap they submitted to me. And then I would have to go back and write a new ap to make it reflect what the aps they submitted to the banks said. Part of why I quit that place.

She told me they had one applicant, an employee in a hair salon get approved for a $600,000 home loan.. she wouldn't do it, got written up and the loan got approved anyway. Now you know someone working in a hair salon in the mall isn't making close to enough to make the payments on that mortgage but of course the banks didn't care.

I'll get flamed for this but this is why I don't know if I 100% stand behind capitalism any more, at least not in the way it is now. Capitalism with good regulation seems to be best but I'm sure a lot of people would disagree.

[ironchef]

I still don't get how majority of the people in California and other states that have ridiculous real estate prices got approved for loans. I like watching that show Sleep on It on HGTV I think, and this kind of thing pops up all the time. Just last week they had an episode where the guy was a pastor and the wife was a stay at home mom, and their budget was $750k? Like wtf?

[TIGERJC]

Sometimes I wish our country had laws in place like china that would punish corporate greed. If the Enron incident happened in china, the top executives behind it would be facing a minimum of 20 years

[Vteckidd]

She told me they had one applicant, an employee in a hair salon get approved for a $600,000 home loan.. she wouldn't do it, got written up and the loan got approved anyway. Now you know someone working in a hair salon in the mall isn't making close to enough to make the payments on that mortgage but of course the banks didn't care.

I'll get flamed for this but this is why I don't know if I 100% stand behind capitalism any more, at least not in the way it is now. Capitalism with good regulation seems to be best but I'm sure a lot of people would disagree.
I agree actually. I think the capitalism way works but too many people are taking advantage of it. This country is going to need serious reform everywhere in the next few months/ years politically, economically, socially

[Jecht]

O NOES! Everyone withdraw all their money and save it in shoeboxes in your closets! I'm sure that will be good for the economy!

[civic95]

Sometimes I wish our country had laws in place like china that would punish corporate greed. If the Enron incident happened in china, the top executives behind it would be facing a minimum of 20 years

Actually they would of got the death penalty. China don't play. They sentence people to death for taking bribes in business.

[BanginJimmy]

Just the residual effect of bad lending practices. My sister was an underwriter for Indymac Bank, and she said she was constantly reprimanded for not approving loans that she knew were frivolous. Of course she would get written up and someone else would approve the loan only to have it default in a matter of months.

Greed and stupidity have put this economy in the ****ter


Fixed that and I agree. There is good news though. I have seen articles and talked to quite a few people that know the real estate market and the crisis is starting to level off. Within a year we will start to see improvement unless politicians stick their nose even further into it. People keep talking about how home values are falling, but that is simply the fact that they are recovering from being so artificially inflated.

[Alan®]

Fixed that and I agree. There is good news though. I have seen articles and talked to quite a few people that know the real estate market and the crisis is starting to level off. Within a year we will start to see improvement unless politicians stick their nose even further into it. People keep talking about how home values are falling, but that is simply the fact that they are recovering from being so artificially inflated.
That mad money show I forget the name of it but i'm sure you know what I'm talking about. They had some idiot senator who said that getting extensions on the time that all the arm's had on the lower intrest rate would solve the issue :screwy:

[OTG Signs]

This is why we have FDIC insurance. Morons.

[AirMax95]

Oh so true, if mutha ****in Vernon Jones becomes a senator here in Georgia I will be pissed. Theres a few others on my list as well.

Yeah, if he does ANY more for the Dekalb county, or gets elected to the GA Senate, I will **** on the congressional steps!

Time will tell, but if we get a good round of elects soon lots of reforms will come in to play to stop the bleeding.

[Echonova]

OBAMA IS THE ANSWER!!! IT'S A "CHANGE" WE CAN BELIEVE IN!!! OBAMA CAN FIX THE ECONOMY JUST BY LOOKING AT IT, HE'S THAT GOOD.

[Sport1.3]

speculation FTL

[JConner]

in then next 12 months!!!


This crisis is real people! I dont think i have been this scared in a long time about our future as a nation. Even after 9/11 it wasnt this gloomy IMO.

Banks closing
Oil Skyrocketing
Homes foreclosing
Stock plummeting

it's people like you and the media that cause this bull**** panic. The economy goes through cycles, it cannot always be perfect. Just like the sun goes through cycles and causes the earth to cool and warm. Become educated in simple economics and quit believing everything you see on tv my friend.

[ShooterMcGavin]

i have no worries, i know obama will save us all!

[Vteckidd]

LOL at Jconner

[Sport1.3]

LOL at Jconner

awesome rebuttal :D

[Vayda]

The foreclosing homes isn't that big of a deal. People that couldn't afford homes were dumb enough to try and buy them anyway, and banks were dumb enough to hand out those loans. They're all getting what they deserved now.

[Vteckidd]

i dont feel like typing 3 pages.

[Echonova]

http://i185.photobucket.com/albums/x249/Echonova1/Obama_hope-nosis.gif

[Vteckidd]

LOL

[willum14pb]

i hate to say it.. but kayfunk has been telling me this **** was going to go down for the past year. lmao. Listen to alex jones if you don't already.. smart dude.

[willum14pb]

The foreclosing homes isn't that big of a deal. People that couldn't afford homes were dumb enough to try and buy them anyway, and banks were dumb enough to hand out those loans. They're all getting what they deserved now.

ACTUALLY the majority of foreclosures are from american's who don't read fine print and get mortgages that aren't set at a fixed rate. Banks are giving out 4% home loan "fixed" rates all year long. But when you sign the contract, it's fixed at 4% for.. 6 months to a year.. and then it sky rockets to 20%. No one can afford the payments thus.. they end up on their ass. Not to mention another large majority of foreclosed homes are due to a crashing economy and loss of THOUSANDS of jobs through out the nation. That MIGHT have something to do with it.. not "oh hey, lets go buy something we can't afford."

[chnco]

Well oil prices took a big drop yesterday.

Although we are absolutely screwed if Freddie/Fannie need to be bailed out, 100000x worst than Bear-Stearns.

Sucks for IndyMac, they definitely had an abrubt closure.

[4dmin]

we need to get rid of bush administration and get someone in who is more focused on national economic stability then expanding war efforts. the US is going to hell in a hand basket

[IndianStig]

She told me they had one applicant, an employee in a hair salon get approved for a $600,000 home loan.. she wouldn't do it, got written up and the loan got approved anyway. Now you know someone working in a hair salon in the mall isn't making close to enough to make the payments on that mortgage but of course the banks didn't care.

I'll get flamed for this but this is why I don't know if I 100% stand behind capitalism any more, at least not in the way it is now. Capitalism with good regulation seems to be best but I'm sure a lot of people would disagree.

Pure capitalism will never work. You are completely justified in what you say. Market economies fail. Command economies fail. America has the right recipie but the wrong people. I see nothing short of a full overhaul of our education system, tax codes, and finance regulations leading to a successful mixed economy. Thats just the least of what needs to change in order for us to get back on our feet.


Also back on topic, don't buy into the hype, spend your money, thats the only way this economy is gonna get back to its normal rate of growth!

[chnco]

We don't live in a pure capitalism economy FYI.

[IndianStig]

we need to get rid of bush administration and get someone in who is more focused on national economic stability then expanding war efforts. the US is going to hell in a hand basket

Too bad neither candidate has a good plan. The choice really sucked this time...

Also yes, **** the war right now, seriously. We need to cut the number of troops we have there, give the ones that are left more freedom to protect themselves if they feel endangered and spend more money stimulating the damn economy.


We don't live in a pure capitalism economy FYI.

Yah i know.

[IndianStig]

i dont feel like typing 3 pages.

LOL. exactly what i thought when i saw this:



The foreclosing homes isn't that big of a deal. People that couldn't afford homes were dumb enough to try and buy them anyway, and banks were dumb enough to hand out those loans. They're all getting what they deserved now.

[4dmin]

Too bad neither candidate has a good plan. The choice really sucked this time...

Also yes, **** the war right now, seriously. We need to cut the number of troops we have there, give the ones that are left more freedom to protect themselves if they feel endangered and spend more money stimulating the damn economy.



Yah i know.

i compeletly agree, i personally plan on voting for obama just to make sure we end some of the bush reign

[OTG Signs]

Well oil prices took a big drop yesterday.

Although we are absolutely screwed if Freddie/Fannie need to be bailed out, 100000x worst than Bear-Stearns.

Sucks for IndyMac, they definitely had an abrubt closure.

Freddie/Fannie won't need a bail out. They are backed by the government to continue full operations from this point out. The press is just hyping **** up as usual.

[JConner]

Also yes, **** the war right now, seriously. We need to cut the number of troops we have there, give the ones that are left more freedom to protect themselves if they feel endangered and spend more money stimulating the damn economy.
.

Wow, i am guessing that you do not have a single friend that has served or is serving overseas.

Spend money to stimulate the economy??????? HAHAHAHAH We need to CUT TAXES to stimulate the economy, not tax people more so that the government can issue "stimulus" checks to all the people making below 75k a year who will just pay down debt with it.

Lower capital gain taxes and all taxes on the job providers (RICH) and we would see the economy grow!

[Big Deezy]

Yeah I working construction and work just keeps getting slower and slower. S**T sucks!!! OH well What can we do??

[willum14pb]

Yeah I working construction and work just keeps getting slower and slower. S**T sucks!!! OH well What can we do??


you must mix the concrete.. huh?

[BanginJimmy]

i compeletly agree, i personally plan on voting for obama just to make sure we end some of the bush reign


I keep hearing liberals talk about voting for obama to get rid of bush, but you do know that Bush isnt running again dont you? McCain is light years away from Bush on most issues, so that comparison is utterly baseless, just like the Obama is a muslim terrorist claims are baseless.

[B_Hoov]

there was a guy on fox news yesterday, the bank he used shut down and there were ppl lined up out the door wanting there money, he had a little over 600k in the bank, they gave him 100k as that is all FDIC insures and then gave him 50 cents on the dollar after that, so he put in 600k and left with 350k when they closed...quarter of a million dollars, just like flushing it down the commode of life.

[JConner]

there was a guy on fox news yesterday, the bank he used shut down and there were ppl lined up out the door wanting there money, he had a little over 600k in the bank, they gave him 100k as that is all FDIC insures and then gave him 50 cents on the dollar after that, so he put in 600k and left with 350k when they closed...quarter of a million dollars, just like flushing it down the commode of life.

So whos fault is that? With that much money you would think that he is smart enough to know that the government will only insure $100,000 per account. $600,000 could have earned MUCH more interest in an IRA, etc...

[JennB]

^^ Agreed. The $100,000 limit is stated on every single "FDIC Insured" sign in every bank. It's not a secret.

There are countless funds and accounts he could have put that money in where it would have been very safe and make him a good bit of extra money.

[Vteckidd]

we need to get rid of bush administration and get someone in who is more focused on national economic stability then expanding war efforts. the US is going to hell in a hand basket

I cant believe you gonna lay all this on bush paul LOL

What happened to our economic stability when we were attacked by Terrorists on 9/11?

So you dont think National Security goes hand in hand with Economic Stability? Why are we where we are today?

Liberal wont let us drill our own land for oil because we might disrupt the spotted owl. So oil prices skyrocket because the demand is high, supply is low.

Housing market collapsed because of crooked lenders, has nothing to do with Bush.

Stocks are down because of housing market and oil prices. No secret there. People are scared of the future

War is costing us money, but it had to be done. We are better off 10 years from now with a democratic IRAQ than a dictatorship.

We enjoyed enourmous properity under clinton (none of it was his doing just serving) so it makes sense we have some tough patches to go through.

Our dependence on oil and not drilling is costing us NOW.

OBAMA will be WORSE than Bush, mark my words. His policys are just what the American public want to hear, but there is no substance to them.

[Alan®]

I cant believe you gonna lay all this on bush paul LOL

What happened to our economic stability when we were attacked by Terrorists on 9/11?

So you dont think National Security goes hand in hand with Economic Stability? Why are we where we are today?

Liberal wont let us drill our own land for oil because we might disrupt the spotted owl. So oil prices skyrocket because the demand is high, supply is low.

Housing market collapsed because of crooked lenders, has nothing to do with Bush.

Stocks are down because of housing market and oil prices. No secret there. People are scared of the future

War is costing us money, but it had to be done. We are better off 10 years from now with a democratic IRAQ than a dictatorship.

We enjoyed enourmous properity under clinton (none of it was his doing just serving) so it makes sense we have some tough patches to go through.

Our dependence on oil and not drilling is costing us NOW.

OBAMA will be WORSE than Bush, mark my words. His policys are just what the American public want to hear, but there is no substance to them.
THANK YOU THANK YOU THANK YOU!!!! :goodjob: reps 100x if i could.

[Alan®]

You must spread some Reputation around before giving it to Mr. KiDD again.


:(

[SouthSide Tay]

Yeah, if he does ANY more for the Dekalb county, or gets elected to the GA Senate, I will S H I T on the congressional steps!



can we hold you to that......and if you do it ...it aint shiit without pics

we need to get rid of bush administration and get someone in who is more focused on national economic stability then expanding war efforts. the US is going to hell in a hand basket
Correction WENT to hell in a hand basket!

[IndianStig]

Wow, i am guessing that you do not have a single friend that has served or is serving overseas.

Spend money to stimulate the economy??????? HAHAHAHAH We need to CUT TAXES to stimulate the economy, not tax people more so that the government can issue "stimulus" checks to all the people making below 75k a year who will just pay down debt with it.

Lower capital gain taxes and all taxes on the job providers (RICH) and we would see the economy grow!

In fact I do. And yes...it takes money to make money punk. Government grants for education, businesses, energy rebates, public transport, tax cuts....just to name a fewofthe thing the government could do to stimulate the economy!

[Spektrewing386]

OBAMA will be WORSE than Bush, mark my words. His policys are just what the American public want to hear, but there is no substance to them.


you rather have the man that said to the public he knows nothing about economics and depends on his advisors? the same advisors that calls the country a "nation of whiners".

[BanginJimmy]

you rather have the man that said to the public he knows nothing about economics and depends on his advisors?

I would rather have a president that knows he doesnt have the knowlege and listens to his advisors than one that tinks he has a clue but doesnt. Also that quote from McCain is from 2005 and I think it shows intelligence rather than ignorance. He knows what he doesnt know.


the same advisors that calls the country a "nation of whiners".

We are a nation of whiners. We are also a lazy nation that is doing its best to live off the govt tit instead of making sacrifices and being self reliant.

[tony]

Wow, i am guessing that you do not have a single friend that has served or is serving overseas.

Spend money to stimulate the economy??????? HAHAHAHAH We need to CUT TAXES to stimulate the economy, not tax people more so that the government can issue "stimulus" checks to all the people making below 75k a year who will just pay down debt with it.

Lower capital gain taxes and all taxes on the job providers (RICH) and we would see the economy grow!

This is what I don't understand, the same people who want tax cuts want to stay in Iraq spending $9 billion a month, where the hell do you think that money comes from?

As it is now we are running at a federal deficit, lowering taxes widens that deficit. Tax revenues have to come from somewhere if spending is not being cut.

[tony]

I would rather have a president that knows he doesnt have the knowlege and listens to his advisors than one that tinks he has a clue but doesnt. Also that quote from McCain is from 2005 and I think it shows intelligence rather than ignorance. He knows what he doesnt know.





When your advisors are lobbyists you have to wonder whose interest do they have at heart.. the people or their own.


John Green, the senator's chief liaison to Congress, and Wayne Berman, his national finance co-chairman, billed more than $720,000 in lobbying fees from 2005 through last year to Ameriquest Mortgage through their lobbying firm, disclosure forms reviewed by the Daily News show.

Ask anyone in the know about Ameriquest Mortgage and you would think twice about our president confiding in them for the good of the country. I think I would rather have McCain's lack of knowledge rather than one of his advisors who posses the WRONG knowledge. Or better yet just go with Obama.

[BanginJimmy]

I'm saying I agree with his advisors, just the fact that McCain is smart enough to know what he doesnt know.

And if they only billed $720k since 2005 they are not the big time lobbiests. The upper echelon of lobbiests will bill that much in the first 3 months of one year.