Friday, December 18, 2009

The padlock men on overtime

The FDIC seized another seven banks today at a cost approaching two billion. Two of the banks could not be sold at any price and they appear to have been trying to unload them for some time. So the government will just mail checks to those depositors that are covered by insurance. Everybody else will just eat their losses.

Banks that are healthy enough themselves to absorb other banks are becoming increasingly scarce. An indication of what the padlock men expect for next year is that they have increased their staffing budget by 55% and doubled the budget for the holding of banks in receivership. That would be for the temporary running of banks they board up and the mothballing of other assets that they can’t unload because of their excessive toxicity.

They like to say at a 140 closings we are no where near the numbers of the banks closed during Reagan’s crash of the S&Ls that peaked at 650 in one year during Pappy Bush’s years but many of these banks are large chains so the numbers don’t directly compare. The FDIC and/or the Treasury Dept. as well as the Federal Reserve have already been assuming the risk for trillions of toxic assets that far outstrip the losses from the good old days of that meltdown.

Next year we will see the first real wave of the bank tsunami, so far people are just standing on the beach wondering where the water went. We can expect the illusion of recovery from the Obama bubble but what we need is some real leadership because those waves are just going to keep coming. www.prairie2.com

1 comments:

Anonymous said...

The actual numbers of bank seizures including their branches, total dollars stolen, and mumber of banksters walking away scott free and extremely wealthy would certainly be interestng to know.But it continues "under the radar" and always on Friday. A few billion each week with virtually no accountability.

P2 has kept us informed of how the world is slowly moving away from the dollar as its reserve currency.

I was surprized that P2 did not comment on this "news. "

Gulf petro-powers to launch currency in latest threat to dollar hegemony

http://www.telegraph.co.uk/finance/economics/6819136/Gulf-petro-powers-to-launch-currency-in-latest-threat-to-dollar-hegemony.html

"The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate."
“The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Co-operation Council (GCC) summit in Kuwait."

Whats your take on this P2?