Meanwhile in Banking LaLaLand

[david austin]

As the champagne continues to stream from the toasts of 'the recession is over'...

The FBI served two warrants at Colonial Bank in Orlando, Florida this morning. While this bank has been in deep shit for a long time the interesting twist is that the FBI was working in conjunction with SIGTARP.

SIGTARP was set up to oversee how TARP was being used. A surprising move towards transparency that most thought would lead to little to no actual 'inspection'.

BUT... Hard balling inspector gen is actually sticking his nose where much of the admin my not want him to go.

The initial thought is that the raid was to uncover accounting fraud which brings up some very interesting points.

Is the FDICs hand about to be forced? Will SIGTARP actually do its job and bring to light how many of these banks and thrifts are completely insolvent?

In the case of Colonial... this isnt a small time mom and pop bank. This regional has 355 locations and 26B in assets. This past friday Colonial chaulked up a 600M loss and a investor financing deal has fallen through. Essentially the bank is done. Probably wont last through this coming friday.

So... The FDIC is burning through its cash at an alarming rate. Colonial itself has about three quarters of its deposits insured under FDIC (this leaves over 6B completely unsecured/uninsured). If the bank were to fail say this week it would place the FDIC in a severe crunch as they have not been able to replenish their own deposits fast enough with an average of 3-5 banks failing weekly. (yes... that stat isnt making the news either)

The 4 big regionals (including Colonial) that are about to implode 'should' have been shut down weeks ago which now begs the question...

Has the FDIC been looking the other way while banks commit accounting fraud simply because they cant even make good on their own promises to secure deposits? Surely this manipulated rally cannot just be to prop toxic books in the 'hopes' that a recovery will make it look as if none of this mess even happened.

And theres that 'hope' word again... Its unfortunate how much the elite can prey on the average Joe with daily doses of soothing hope, optimism, and change

And just want type of damage could be done to this same group if evidence is found that the FDIC isnt exactly in the business of protecting the consumer...

[matias pecile]

so what banks have failed thus far and do you have any idea what banks will fail?

[Dionysos]

Originally Posted by matias pecile

so what banks have failed thus far and do you have any idea what banks will fail?

Also, could you teach Matias how to use Google while you're at it?

[david austin]

Originally Posted by matias pecile

so what banks have failed thus far and do you have any idea what banks will fail?

69 so far in 2009.

Colonial
Guaranty
Corus

Those are the current negative capital biggies. I will also add that assets are close to 50B between the three.

Those three failing in quick order would break the FDIC.

BTW... Guaranty is a big Texas regional... if any of you have deposits there you might want to look elsewhere wuickly

[SeedfulMusic]

I love you David Austin.

[vinnie97]

Wow, Guaranty is huge. How disturbing. The descent into chaos continues.

If any one of those 3 big'uns go, the FDIC insurance fund is toast and we can all get ready for the effing soup kitchens:

http://market-ticker.denninger.net/archives/P2.html (this dude is in lockstep with your line of thanking, David...anyone here would be wise to bookmark it and read the writing on the wall).

[david austin]

Yeah I read his stuff often.

Its amazing how the media is so incredibly manipulated and down right dishonest when dealing with this economic situation.

Its practically criminal.

[david austin]

Got a memo that the FDIC is about to seize Guaranty.

Theres another 5B out of the FDIC kitty.

Maybe the FDIC should apply for TARP. That way the bank/taxpayer circle jerk would be complete

[PETA]

Originally Posted by david austin

Got a memo that the FDIC is about to seize Guaranty.

Theres another 5B out of the FDIC kitty.

Maybe the FDIC should apply for TARP. That way the bank/taxpayer circle jerk would be complete

apparently you missed the news... the Dow is over 9000!!!!

[SeedfulMusic]

Originally Posted by david austin

Yeah I read his stuff often.

Its amazing how the media is so incredibly manipulated and down right dishonest when dealing with this economic situation.

Its practically criminal.

They are after the samething all the big corporations, and banks are after... more money and more power. The media are out to please stockholders too just like everyone else.... its our monetary system that encourages us to rape one another. Take these bankers down!

This IS criminal! We have to stop these rapists.

Vin - loved the market-ticker letter, that was awesome! I want to know if there was ever a resposne?

[J. Fees]

has there been a time i the last 200+ yrs that some form of the rich elite didnt govern and rape our society?

[matias pecile]

Originally Posted by J. Fees

has there been a time i the last 2000+ yrs that some form of the rich elite didnt govern and rape our society?

fix'd

[J. Fees]

well i was talking about the U.S.. but we can take it back to the sumerians if ya want.

[PETA]

Originally Posted by J. Fees

well i was talking about the U.S.. but we can take it back to the sumerians if ya want.

probably not (going back to the Sumerians)... however the US does a fairly decent balancing act between permitting business to operate and protecting the public from their bad acts... the result is the most affluent society the world has ever seen. We'll always have bad actors and fools so there will always be a role for the state to mediate and determine if the bad actor was bad enough that he warrants punishment or if the fool was just being a fool - which is punishment enough.

[SeedfulMusic]

Originally Posted by J. Fees

has there been a time i the last 200+ yrs that some form of the rich elite didnt govern and rape our society?

Great point! Lets continue to let it happen!