Small and medium-sized banks are quickly becoming an endangered species. A recent news article reports “Regulators on Friday shut down seven banks in Illinois, putting the number of U.S. bank failures this year at 57. The Federal Deposit Insurance Corp. took over four banks in Chicago: New Century Bank (CBAO), with $485.6 million in assets; Citizens Bank (CZMO)&Trust Company, with $77.3 million in assets; Broadway Bank, with $1.2 billion in assets; and Lincoln Park Savings Bank, with $199.9 million in assets. The FDIC also took over Amcore Bank of Rockford, which had $3.8 billion in assets; Peotone Bank and Trust Company in Peotone, with $130.2 million in assets; and Wheatland Bank of Naperville, with $437.2 million in assets.”
Isn’t Chicago Obama’s home town, and Illinois his home state? Funny that all seven banks this week just happened to be from there. Some suspicious people might say that the number of banks failing each week is being manipulated so that we have zero failures one week and then seven the next. In 2009 the rate of bank failures was 2.7 per week. This year it’s 4.6 banks per week.
The article goes on: “There were 140 bank failures in the U.S. last year, the highest annual tally since 1992 at the height of the savings and loan crisis. They cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008 and only three succumbed in 2007. The number of bank failures likely will peak this year and will be slightly higher than in 2009, FDIC Chairman Sheila Bair said recently. The number of banks on the FDIC’s confidential problem list jumped to 702 in the fourth quarter from 552 three months earlier, even as the industry squeezed out a small profit. Still, nearly one in every three banks reported a net loss for the latest quarter. The FDIC expects the cost of resolving failed banks to grow to about $100 billion over the next four years.”
This is truly incredible news. 702 banks are on the problem list. And we’re on track to have 180 bank failures this year –assuming the failure rate doesn’t speed up. Kind of hard to spin that kind of news into a “recovery”.
Now the FDIC begins the usual procedure of flogging off these foreclosed banks and their assets to the immense whales of the financial industry. There will soon be not much more in banking besides several mega-banks in this country such as Bank of America, Chase Manhattan, Citibank and Wells Fargo.
This will make it much more easy for the Obama/Democrat socialist state to work hand in glove with the gigantic financial industry, although the question of who controls whom and whether the dog is wagging the tail or vice versa will always be a fascinating one.
In the meantime small savers and ordinary people aren’t losing their savings, thanks to the FDIC. In theory not, at least, although what that money will be worth in a few years or even a few months is open to debate.
