America’s financial collapse continues apace. The bank closures just keep on coming and coming. Yahoo News reports: “Regulators on Friday shut down a total of seven banks in Florida, Georgia, Illinois, Kansas and Arizona, lifting to 139 the number of U.S. banks that have fallen this year as soured loans have mounted and the economy has sputtered. The Federal Deposit Insurance Corp. took over the banks, the largest of which by far was Hillcrest Bank, based in Overland Park, Kan., with $1.6 billion in assets. A newly chartered bank subsidiary of Boston-based NBH Holdings Corp. was set up to take over Hillcrest’s assets and deposits. The new subsidiary is called Hillcrest Bank N.A. The FDIC and Hillcrest Bank N.A. agreed to share losses on $1.1 billion of the failed bank’s assets. Its failure is expected to cost the deposit insurance fund $329.7 million. Also shuttered were First Bank of Jacksonville in Jacksonville, Fla., with $81 million in assets; Progress Bank of Florida, based in Tampa, with $110.7 million in assets; First National Bank of Barnesville in Barnesville, Ga., with $131.4 million in assets; Gordon Bank of Gordon, Ga., with $29.4 million in assets; First Suburban National Bank in Maywood, Ill., with $148.7 million in assets; and First Arizona Savings, based in Scottsdale, Ariz., with assets of $272.2 million.”
The bottom line is that the minority subprime disaster will ultimately cost the banks about $1.5 trillion. We’re also seeing some foreclosures on commercial property now as the slow economy is hitting the malls. More and more of these banks are simply disappearing into the La Brea Tar Pit as both subprime and commercial mortgages continue to fail.
The Yahoo article notes “With 139 closures nationwide so far this year, the pace of bank failures exceeds that of 2009, which was already a brisk year for shutdowns with a total of 140. By this time last year, regulators had closed 106 banks. The pace has accelerated as banks’ losses mount on loans made for commercial property and development. Many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans. That has brought delinquent loan payments and defaults by commercial developers.”
The larger banks are still snapping up these smaller banks’ “assets,” but they’re not assets, they are worthless paper that will never be repaid. How long before the larger banks heavily invested in commercial mortgage and loaded up with the worthless paper of all these “acquisitions” start going down as well? Bank of America is a prime example. I have yet to hear an explanation for how Bank of America was going to handle the tidal wave of debt that they absorbed when they took over the failing Countrywide Mortgage. Or are they going down already and we’re just not being told of the fact?
There are over 800 more banks on the FDIC’s list of troubled banks. Some pundits are predicting that half of these banks could fail in the next year, meaning a BIG acceleration in bank failures.
So far, we have been spared the full impact of the subprime mortgage disaster. There should have been a secondary wave of lay offs from cities and states because of the plunging home values and the loss of property tax revenue. (Many of the houses caught up in foreclosure, wind up in a state of limbo where the property tax bill keeps going to the person who is losing the house –because the banks don’t want to get stuck with those taxes. There are probably millions of houses, which are not producing any tax revenue.)
Many states have dragged their feet when it comes to laying off government workers. California is sinking in debt as it postpones the lay off of at least 200,000 government jobs that it can no longer afford.
We could save ourselves a fortune in government expense by deporting 20 million illegal aliens, but California isn’t going to do this, and the Feds are interfering with Arizona’s attempt to kick out illegals. This may be the first Depression in world history caused primarily by minorities and political correctness.
