Posted on 01/23/2009 12:27:03 PM PST by Golddigger3
Banking regulators across the country are struggling with a new phenomenon: Banks are failing with accelerating speed, exposing holes in the regulatory infrastructure designed to catch collapsing institutions. . . .
Of the 25 banks that failed in 2008, nine toppled before regulators publicly cracked down, including IndyMac Bank and the banking operations of Wahington Mutual Inc., two of the biggest seizures in U.S. history. . . .
The problem illustrates a fundamental weakness in the country’s regulatory infrastructure. The government is positioned to help banks if there is erosion in their capital levels, referring to the cushion banks hold against unexpected losses.
But that isn’t what happened last year. Instead, many banks faced a liquidity crisis as customers and business partners lost faith, shutting off the banks’ access to short-term cash. [Have we already had runs on various banks?]
“In 2008, we have seen institutions fail with greater velocity than in prior years,” says Scott Polakoff, senior deputy director at the Office of Thrift Supervision. “That greater velocity is driven by liquidity crises, not capital crises.” . . .
“For the most part, I think it was a tidal wave,” says Rob Braswell, the top bank regulator in Georgia, where five banks failed last year. Only one was under a public enforcement action at the time. [If last year was a tidal wave, what will this year be since the loses are now seen as much, much greater]. . .
Liquidity kills banks faster than anything, and regulators just don’t have time to issue cease-and-desist orders and take formal enforcement actions,” says Jaret Seiberg, a Washington analyst at Stanford Group, a financial-services company. “We’ve seen banks die within a matter of days and weeks, You go from having a cold to buried.”
(Excerpt) Read more at online.wsj.com ...
Mr. mm read an article recently in the Economist about the comparison of investments and which would leave you in the best shape right now, and the verdict was that the mattress is the best.
Don’t sweat it. FR has been slow for me and sometimes it’s hard to know if the post went through cause it was FR or your own computer.
Dupes happen....
I agree. Scamming the system is immoral and unethical.
If they can’t afford the credit card debt, they shouldn’t have them.
At the point that ETFs from major member banks collapse I think lead will be more valuable than gold, and tuna fish may be more valuable than that.
Because we have deflation right now and what you buy today will cheaper six months from now
The purchasing power of the money in your mattress is increasing
Go buy gold ETFs.
But I would also take Olivia Newton John's sage advice -- "Let's get physical"
You can do both
Great advice. I do both. The tax bit to convert my ETF to physical would be about 40%! So, I'm reluctant still.
Wheeling and dealing is fine except for the tendency for politicians to throw the wheelers a life vest composed of an anvil with a chain welded to it and attached to the middle classes legs...
If you refused them credit, you were/are a racist, or "against the poor", etc...
The point I was trying to get at here is that there were honest middle class people who merely needed to purchase a residence and did so within a period where the crookedly manipulated markets created unrealistic valuations. If they have a choice between being relegated to debt servitude or defaulting on one of the crooked institutions that created this environment, so be it.
I'll take a harder line on these people when the government and the money center banks get back to using real money that has a realistic rate of supply growth and can't be pyramided 60-1 from thin air...
Thank you. I am unsure what to do.
Looks like the US operations of TD Bank NA (it changed its name last year) are FDIC insured. Beyond suggesting that everyone keep their balances below the insured limits, I’m reluctant to give specific advice, since it’s hard to really tell what is going on from the publicly available information. I’m personally sitting tight with some money in a megabank, some in a credit union, and a little bit chasing higher yields.
Thank you
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