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Big Texas bank on verge of failure [Guaranty, $13.4B assets] [FDIC only has $1.8B left?!]
Fortune / CNN Money ^
| 2009-07-31
Posted on 07/31/2009 12:37:47 PM PDT by rabscuttle385
NEW YORK (Fortune) -- Guaranty Bank is hardly a household name. But the Austin, Texas-based thrift's looming failure is shaping up as a big headache for bank supervisors -- not to mention a black eye for Carl Icahn and others in the smart money set.
Guaranty (GFG) could be soon seized by the government in what would be the biggest bank failure in a year that has already had 64 of them. Last week, the bank warned investors to expect a federal takeover after regulators forced a writedown of its risky mortgage investments and a bid to raise new capital failed.
Guaranty has $13.4 billion in assets and operates 160 branches in Texas and California -- two of the three best banking markets in the nation, thanks to their size and population growth.
. . . . .
A big tab on Guaranty would be costly to the deposit fund, whose balance was $13 billion at the end of the first quarter. The FDIC has estimated failure costs on cases since then at $11.2 billion.
A spokesman for the FDIC stresses that it has already set aside an additional $22 billion for failure-related costs in 2009, and adds that congressional action this spring gave the agency access to $500 billion in Treasury credit.
(Excerpt) Read more at money.cnn.com ...
TOPICS: Business/Economy; Front Page News; Government; US: Texas
KEYWORDS: bank; bankfailure; banking; banks; bhoeconomy; economy; fdic; financialcrisis; govwatch; guarantybank; obamanomics; obamasfault; panicof2009; theobamadepression
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To: wafflehouse; Leisler; PAR35; TigerLikesRooster; AndyJackson; Thane_Banquo; nicksaunt; ...
*Ping!*
2
posted on
07/31/2009 12:38:25 PM PDT
by
rabscuttle385
(Who is Jim Thompson?)
To: PAR35
A big tab on Guaranty would be costly to the deposit fund, whose balance was $13 billion at the end of the first quarter. The FDIC has estimated failure costs on cases since then at $11.2 billion.
A spokesman for the FDIC stresses that it has already set aside an additional $22 billion for failure-related costs in 2009, and adds that congressional action this spring gave the agency access to $500 billion in Treasury credit.WTH.
3
posted on
07/31/2009 12:40:08 PM PDT
by
rabscuttle385
(Who is Jim Thompson?)
To: rabscuttle385
Not a good sign, but it looks as if the FDIC has been there before. See 1991. Let’s see...oh, yeah, when Bill Clinton took office.
4
posted on
07/31/2009 12:42:00 PM PDT
by
madison10
To: rabscuttle385
As the Democrats would say “chickens are coming home to roost”. Texas didn’t vote for the BamSham.
5
posted on
07/31/2009 12:46:36 PM PDT
by
a fool in paradise
(There is no truth in the Pravda Media.)
To: madison10
>>>Not a good sign, but it looks as if the FDIC has been there before. See 1991. Lets see...oh, yeah, when Bill Clinton took office.
Just a minor correction. Bill Clinton took office January 1993.
6
posted on
07/31/2009 12:47:49 PM PDT
by
NC28203
To: rabscuttle385
I had heard the FDIC is already broke that is money spent already.
To: rabscuttle385
The FDIC collects premiums from all banks continually. The balance at one point in time minus the gross payments out since, is not the current balance - that ignores all inflows over the same time.
The FDIC is not going to fail. It has already obtained backstops from the US treasury (agreed by the Fed incidentally, as well). Banks pay for their FDIC insurance, and over full cycles their payments for it cover all losses covered by that insurance. The FDIC is not a charity.
Stop spreading irresponsible rumors and slander about important American institutions. It is disgusting.
8
posted on
07/31/2009 12:50:32 PM PDT
by
JasonC
To: NoObamaFightForConservatives
You heard wrong, stop repeating reckless rumors you know nothing about.
9
posted on
07/31/2009 12:51:12 PM PDT
by
JasonC
To: NC28203
Some people don't want to know the truth!!! Fictions fits their view of things.
10
posted on
07/31/2009 12:53:55 PM PDT
by
org.whodat
(Vote: Chuck De Vore in 2012.)
To: madison10
The FDIC is not the FSLIC. It was the latter that became insolvent in the S&L crisis, and was absorbed by the FDIC. And that happened in 1989. We don't need to make these things up...
11
posted on
07/31/2009 12:53:56 PM PDT
by
JasonC
To: JasonC
I come here to get my anxieties stoked and my ignorance ratified and then here you come. You ain’t no fun a’tall.
To: JasonC
To: rabscuttle385
We should just let them all fail, let the market be free! Then those bankers will stop taking un-needed risks when they have to pay for it!
To: JasonC
And furthermore... If they were insolvent right now would it be announced?
Think about it....
It would be like announcing a sure hit asteroid hitting earth.
No fears though 0bama would print more money to bail them out.
To: NoObamaFightForConservatives
You can't read. "Could be" refers to future losses. And it predates the treasury backstop which directly solved this. Bair was sensibly calling for additional measures to prevent any anxiety over FDIC insurance, at the bottom of the market, in March. Her concerns were professionally addressed. Your continuing to smear banks over it is irresponsible doom mongering crap. Stop it yesterday.
16
posted on
07/31/2009 1:24:09 PM PDT
by
JasonC
To: NoObamaFightForConservatives
Conspiracy theorists can always be spotted because they will always be driven to claim that the lack of evidence for their position is evidence of their position. It is a confession of intellectual bankruptcy. The FDIC is entirely sound. Any short term liquidity concerns anyone might have had about it were more than met, with a sledgehammer, by the $500 billion treasury pledge. Anyone still worrying over it is a fool. But in fact men aren't still worried over it. They are simply casting about for any 2x4 to slander finance with. They hate finance with a fiery passion and think it is politically expedient to smear rich men and monger their prophecies of doom.
They are utter rogues and anyone giving them the time of day is pond scum. Are we clear?
17
posted on
07/31/2009 1:27:15 PM PDT
by
JasonC
To: NoObamaFightForConservatives
it wouldnt matter if they were technically broke or insolvent. they have a blank check from the treasury. the FDIC will not fail.
18
posted on
07/31/2009 1:34:44 PM PDT
by
wafflehouse
(RE-ELECT NO ONE !)
To: rabscuttle385
19
posted on
07/31/2009 1:42:07 PM PDT
by
dragnet2
To: JasonC
OH GREAT BANKERS!
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