Quote of the Day -- Another Proud Day for Missourians

"Socialism is a scare word they have hurled at every advance the people have made in the last 20 years.

Socialism is what they called public power.

Socialism is what they called Social Security.

Socialism is what they called farm price supports.

Socialism is what they called bank deposit insurance.

Socialism is what they called the growth of free and independent labor organizations.

Socialism is their name for almost anything that helps all the people."

--President Harry S Truman, said this day, October 10, 1952

Give 'em Hell, Harry.

And thanks. Thanks so very much. For all you did and said and stood and fought for.

Paying attention to the banks lately?

From Yahoo! News and the Associated Press this morning: Regulators shut banks in Florida, Washington state WASHINGTON – Regulators on Friday shut down small banks in Florida and Washington state, bringing to 127 the number of U.S. bank failures this year on a wave of loan defaults and economic distress. But here's the clincher for me: With 127 closures nationwide so far this year, the pace of bank failures exceeds that of 2009, which was already a brisk year for shutdowns. By this time last year, regulators had closed 95 banks. And whereas last year most of the bank failures were due to home mortgage loans that went sour, this year it's gone commercial and so, likely, possibly much more expensive and damaging: 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. I took this last note to be somewhat positive--the proverbial "silver lining to the cloud": The number of bank failures is expected to peak this year and be slightly higher than the 140 that fell in 2009. Anyway, for now, we're not "out of the woods" by a long shot, yet. Here's hoping things get better. And the sooner the better, too, of course. Try to have a great weekend, y'all. Link to original story: http://news.yahoo.com/s/ap/20100925/ap_on_bi_ge/us_bank_closures/print

Think the banking crisis was "last year's news"?

I wasn't sure how this was going, the banking industry crisis, but I really did hope the worst was behind us. It turns out, it's not. The FDIC closed banks last night in "Florida, Georgia, Oregon and Washington, lifting to 108 the number of U.S. banks to fail this year as the industry has struggled to cope with mounting loan defaults and recession." And here's the clincher: The number of bank failures is expected to peak this year and be slightly higher than the 140 that fell in 2009. That was the highest annual tally since 1992, at the height of the savings and loan crisis. The 2009 failures cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007. Well, that and this: The growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $20.7 billion as of March 31. The number of banks on the FDIC's confidential "problem" list jumped to 775 in the first quarter from 702 three months earlier, even as the industry as a whole had its best quarter in two years. A majority of institutions posted profit gains in the January-March quarter. But many small and midsized banks are likely to continue to suffer distress in the coming months and years, especially from soured loans for office buildings and development projects. The FDIC expects the cost of resolving failed banks to total around $60 billion from 2010 through 2014. Additionally, with consumer confidence--and spending--both at deep lows, don't look for this to change or improve any time too soon, either. Here's hoping for the best, eh? Try to have a terrific weekend. Link to original post: http://news.yahoo.com/s/ap/20100731/ap_on_bi_ge/us_bank_closures;_ylt=AsObbyWHpmK7E_A1HA9oaoiMwfIE;_ylu=X3oDMTM1bWNjdXQ2BGFzc2V0A2FwLzIwMTAwNzMxL3VzX2JhbmtfY2xvc3VyZXMEY2NvZGUDbW9zdHBvcHVsYXIEY3BvcwM2BHBvcwM2BHNlYwN5bl90b3Bfc3RvcmllcwRzbGsDcmVndWxhdG9yc2Ns

Things W's government didn't do that led to the financial collapse

Here is a short list of what the George W. Bush Administration did and did not do, from 2000 to 2008, which led to the banking and economic collapse of the last year. (And this says nothing of what W's same administration didn't do after Hurricane Katrina hit New Orleans or other travesties):

--Failed to rein in what Chairwoman Sheila Bair of the Federal Deposit Insurance Corp. called a "shadow banking system" in which major banks ramped up their risks by making hundreds of billions of dollars in exotic, off-the-books bets.

--Decided to scale back the FBI's resources for tracking white-collar crime after Sept. 11, and assigned scant personnel at the Securities and Exchange Commission to monitor major investment banks after they were given new freedom in 2004 to take on added risks;

--Adopted rules in 2004 that restricted state regulators from policing predatory lending and other mortgage abuses, prompting some major lenders to seek federal charters to avoid tough scrutiny;

--Relyed too much on the credit ratings of Wall Street agencies, which had financial incentives to bestow high ratings on dubious mortgage-backed securities;

--Failed to monitor major banks' compensation arrangements that gave bonuses for completing mortgage securities sales, regardless of the risks of default;

--Ignored a warning to Congress by the FBI's investigation chief in 2004 that widespread subprime-related mortgage fraud would lead to a financial crisis;

--Failed to apparently be aware of and stop the illegal use of "short selling" which gets money "on the side" of a sale to a bank or lending institution. This is money that is used in the transaction but that is not reported and so is "off the books". It's illegal and it's apparently still being done today by the big banks, at minimum.

Ayn Rand, anyone?

Not me, thanks.

This, ladies and gentlemen, is why we need government.

These are all reasons why we need government regulations.

Pay attention to this Financial Crisis Inquiry Commission, folks. Read up on it. It's only just begun and the travesties are all over the map.

Unfortunately correct and vindicated

Well, ladies and gentlemen, I was correct.

Do you remember last week I said there was a good possibility that we might see a bank--or two--failing each Friday night for a while?

Let me repeat: I was right.

I wish I weren't, truth be told.

According to the news this morning, a small bank in Florida failed last night. It was taken over by the FDIC, of course, and will be quickly sold. See the full story here: http://www.reuters.com/article/ousiv/idUSN0136691620080802

It was the 8th bank to fail so far this year. (Wouldn't you think Keith Olbermann--or some news junkie--would set up a weekly "bank watch"? Maybe they don't want to give the public reason to panic, since the American public doesn't want to pay attention, by and large).

The good news? It was a relatively small bank. First Priority Bank had "only" $259 million in assets and $227 million in deposits.

The bad news? Its failure will cost the federal fund that insures deposits--read: you and I, the taxpayers--an estimated $72 million.

Chalk it up to our account.

As I also said earlier here, in the 1st quarter of this year, the FDIC had 90 banks on its "watch" list. This article recounts that and states that they also won't tell which 90 banks they are. It's understandable--can you imagine the runs on those banks if they told which 90 they were?

Still, wouldn't you like to know if YOUR bank were, maybe, in trouble?

Once more, I'd like to take a moment to personally thank, with dripping sarcasm, the Republicans, for deregulating the banking industry.

Oh, well, for now, it's the weekend. Go out, work, relax, enjoy, keep cool.

Let's hope there either aren't any more banks that fail (I'm not counting on it) or, that, if they do fail, they are small and few in number.

Cross your fingers.