This past Friday seven additional banks went under, for a total of 64 failures so far this year. The FDIC took over the banks, including three in Puerto Rico which account for roughly a fourth of the island’s bank assets.
From The Wall Street Journal:
“Three of the banks [...] were located in Puerto Rico and held about $21 billion in assets. That’s about a quarter of the assets of the 10 banks headquartered on the island.
“Regulators also shuttered CF Bancorp in Port Huron, Mich., which had 22 branches, $1.65 billion of assets, and $1.43 billion of deposits; Champion Bank in Creve Coeur, Mo., which had $187.3 million in assets and $153.8 million of deposits; BC National Banks in Butler, which had just $67.2 million of assets and $54.9 million of deposits; and Frontier Bank in Washington, which $3.5 billion of assets and $3.1 billion of assets…
“…The seven failures cost the FDIC’s deposit insurance fund more than $7 billion.”
By Saturday, FDIC Chairman Sheila Bair was already out getting ahead of the story in public with Puerto Rico Governor Luis Fortuno, trying desperately to put a positive spin on the matter. She described it as an optimistic “inflection point,” and that there are “signs of repair.”
It’s hard to buy that story though. Another post shows that this is the largest day of bank failure since back in July of 2008. That was when IndyMac cost the FDIC $8 billion. Hopefully any future “signs of repair” will cost the FDIC a whole lot less.
You can see more details on the closures, as well as an interactive map, in The Wall Street Journal’s tracking of bank failures.
Rocky Vega,The Daily Reckoning
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let?s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
Well said Rocky.
News flash: The future is uncertain. (Gasp!) But given this uncertainty how are you supposed to invest successfully? It would be nice to ride stocks on the way up... and bow out before the crash... but few are able to do it without sheer luck. Chris Mayer, searching for a successful method, looks back to the 1929 market crash for clues...
As owner of the world's reserve currency, the US has enjoyed a cushy spot in the global economy. But with the rise of a group of rival countries the dollar's reserve status is under attack. And if it somehow gets knocked off its perch, the effects throughout the world (and in the US in particular) would be disastrous. Liam Halligan explains...
The US population is aging. The total number of births in the US peaked over seven years ago. And as the Baby Boomer generation enters retirement, it's becoming clear that there's no easy way to offset the trend. And that presents some unique investment opportunities most people have overlooked. Greg Guenthner explains...
Despite rapidly rising food prices, American households still spend relatively little on groceries. And while plenty of factors contribute to lower food costs in the US, that can lead to serious competition... and that means a good investment opportunity is right around the corner. Dave Gonigam explores...
Wouldn't it be convenient to know how fragile or how prone to cracking up the stock market... bond market... and housing market are? Well, Chris Mayer recently created a new index that does just that. And it's signaling that a sharp drop in asset prices is a high possibility. Read on...