Bad and trending worse. How come the markets are up on news like this? Is it because GDP last quarter was 0.9?
I was looking at something to invest long in since I don't feel comfortable being as short as I am. I couldn't find anything. What are people buying? Everything looks overpriced.
I wonder how much of the increase in loan loss reserves is borrowed money using as collateral future revenue streams gained from loans that are rapidly increasing in non performance thus requiring more loan loss reserves to hedge them using more borrowed money using as collateral ......
People who buy and sell or analyze stocks do so on the basis of the fundamentals of that company or business. They have spent years reviewing financials, management, PE's, etc. (presuming they even do that well). They are incapable or inexperienced at looking to external forces.
It would be like asking a building inspector to review the strength of a specific house. He may review the joints, look at type of wood, construction company etc. He will rate or recommend the house's staying power based upon the specifics of that house.
Meanwhile a tornando is screaming down the street toward the house he just gave high marks.
The inspector is no weather man and the change in consumer's ability to spend and rising fuel prices will do damage wholly independant of any one company's or sector's fundamental strength or the earnings power.
Just like all the experts missed the housing bubble, the credit crunch, etc. They missed the coming consumer crunch. Stock buyers today are judging the strength of the house on how it was built, not whether it's in the path of the tornado.
Tanta & CR,
It is interesting to note that only negative news gets posted here. No positives. Like the GDP Growth report. The news to be very mixed, banks are having problems, credit is curtailed. But housing/consumer led recession is no where to be seen!!!
"The number of institutions on the FDICs Problem List increased from 76 to 90 in the first
quarter. Total assets of problem institutions rose from $22.2 billion to $26.3 billion. This is the sixth
consecutive quarter that the number of problem institutions has increased, from a historic low of 47
institutions at the end of third quarter 2006. The current level represents the largest number of
institutions on the list since third quarter 2004, when there were 95 problem institutions."
"Nominal GDP in the first quarter totaled an estimated $14.2 trillion, a 3% annual rate of increase from the final quarter of 2007, which also registered a 3% gain. This two quarter growth rate in nominal GDP is typically associated with recessionary periods"
Wouldn't a Nominal GDP of 3% imply that Fed Funds rates need to stay no higher than 2% according to what Bill Gross was saying last year about an asset based economy trying to service it's debts? And if the FFR rose in this scenario it would force stocks and home prices down? In which case we will either have accelerating asset price drops or increasing inflation depending on the stance of the Fed. In other words, the GDP number is bad because it gives the Fed no room to maneuver and avoid inflationary pressure.
One thing to consider that I see in southern california-that many of the empty business buildings built recently are in the same areas where new communities sprouted like weeds. They all had corresponding business parks where you'd see empty rental space waiting for dental/medical/tax/dance schools/etc.
Well now that the housing crash has virtually halted new construction on homes in the area, and at the same time these are the same areas hardest hit by forclosures, there will be a hesitation to rent space here until housing in the area rebounds.
You may see CRE loans suffer until the housing market corrects. They are not as independant as one might think.
People don't come here for what you get on CNBC. There are plenty of people out there eager to provide the "good" news. Especially people who profit from it.
People come here for the "other" side of the story.
Besides what kinda newspaper gives you story about Joe who woke up and made it to work without crashing. No, you get the story of the guy who did crash. You get the story of the bank that was robbed, not the other 150 that weren't.
Beware the police chief who feel's the need and is eager to point out all the crime that didn't happen in his city. Obviously he/she has a problem with increasing crime in their
Inflation expectations gaining reality. Fed can't cut any more. If nominal GDP were to improve then the FED could start raising rates in the future. GDP revision shows there may be room in the future.
The notion that people are rotating into stocks is something I don't believe. What is the new leadership if not oil and basic materials? There is none. We have slowing domestic growth, 5 years highs in inflation, record inflation worldwide and falling asset values at home. I think we are still in a dying bear market rally. The volume over the past month has been too weak for it to be the start of a new bull market. I think we will be at the old dow lows in less than a month with the financial services and banks leading the way down.
Come on! It's like every couple weeks on this site! Stocks (esp. financials) spring up from an oversold downtrend on light volume getting everyone excited and then when no one's looking they puke down on volume. Bear market rally.
Somebody already mentioned the big news today is in Crude, Gold, and Treasuries - all taking it on the chin.
"un autre canadien avec popcorn writes:
Mystery Meat, do you happen to know what the loan loss reserves, defaulting loan ratio is for the Bank of OMFG."
Oh, it's f'ugly, no doubt. But it's still better looking than Citi or Lehman.
Bubbles today in all areas are due to liquidity. The liquidity however is as much about the ease of moving money as anything else.
Think back before you could transfer money from one account to the next with the click of a mouse. When you had to get a check and wait for it to clear or sell an asset instead of just a index class. Mutual funds used to be the end-of-the day price, now you can instantly trade spiders and foreign funds etc.
Money can shoot from one asset class to the next in an instant.
Analogy alert--Picture an empty row boat half full of water. If the water is free to flow from one side of the boat to the other with no obstructions then you get all the water crashing from one side of the boat to the other and the natural sway of the boat due to waves is accentuated as all the weight from the water inside freely goes completely from one side to the next. It feeds upon itself exagerrating the normal ebb and flow of a gently rolling boat.
Now put dividers in the boat. So that the water is stuck in pockets and can't move quickly if at all. The weight will be unable to quickly slosh from one side to the next and you get a more even weight distribution.
Financial and technological innovations that have increased liquidity have removed the natural dividers that slowed the movement of money from one are of the investment world to the next.
Get used to it. The dividers are unlikely to be replaced since it would appear to be anti-capitalist and a move toward less efficiency.
"Confidence has turned to hope. And that is never a good thing."
Exactly people want to Believe in Gov't intervention, rate cuts, fiscal stimulus but these things have already been done starting in August and we are still below those levels. I remember seeing cramer on the today show in Jan 08 and he said it will be a great year for stocks. Why? Because it is an election year. ???????
Sure enough, the CR contra-indicator worked again. Yesterday, CR reported on US bank troubles, today they are up big time. This past weekend, there was the sequel on oil, which is down big time since then. CR officially made it to my list of contra-indicators for financial markets.
O-Joe
When you own 10% of the world's gold supply due to governments confiscating gold from private holders, you don't even need to sell it on the open market to manipulate the price.
You lend the gold to private deals who then use it to short on the market.
This shorting makes the dollar looks stronger, and gold weaker.
The game resets itself every 3 months on the 3rd monday. If you play it right, you can make 10% on the way up, and 10% on the way down using ETFs
IMO, the boombustblog list of banks could be as skillfuly chosen by a monkey throwing darts.
Possibly, I'm mostly in this for intellectual stimulus, not financial. At least he has a rationale, he's putting his money behind it, and he's too small to change the market himself. Being regional banks there are massive regional risk differences that his overall numbers don't capture. But heck, throwing darts at a list of banks right now is almost always going to pick out a winner (read: loser) with how things are.
I was amazed to see how leveraged they all are on his charts, even the smaller ones. That screams house of cards to me, but what can I say, I'm a neophyte.
The disturbing part of Bair's statements, imho, is the part about the banks most in trouble are those that profit from securities trading.
If the FDIC bails out banks that made money with leveraged speculative securities trading during the boom, and are now paying the price for risky gambles with their money, that's the definition of privatizing profits while socializing losses. It is inexcusable that banking regulators allowed FDIC insured banks to gamble with the deposits they are insuring to increase their profits.
Being fired is not enough of a penalty for federal regulators who allowed this to happen; they should be personally liable for losses absorbed by the FDIC. I guarantee existent, awake oversight when personal liability is attached, as opposed to whatever Bair has been doing for the last 6 years.
Nick
FDIC managers got bonuses and promotions for reducing FDIC staffing and expenses. The entire system during the Bush years was to reduce the size of the FDIC under former Chairman Don Powell. There was NO mandate whatsover to deprive bank's of power and promise of the riches to come. Sorry...
Average Joe, the process you describe with partitions in boats is exactly what they use in ships and in some semi-tankers to prevent slosh. Warning: Flashback - I remember being taught in my Navy ROTC classes that it was better in a damage control situation to have a completely flooded compartment than a half-filled one - the momentum from slosh in a half-filled compartment would seriously decrease ship stability, and enough of them sloshing could easily capsize an otherwise buoyant ship.
Nick: of how many bank failures are you talking here? I heard we had 3 (in words: three) bank failures this year. I would hold my fear and anger back for when real problems will hit the bank system, not this current mortgage bump. Otherwise, you'll get ulcers very soon.
O-Joe
Free markets are NOT a fiction. Being that it's Analogy Day:
The Market is the ocean - vast, deep, and teeming with life. Fish of all sizes can thrive in a big sea. They can even grow and move higher up the food chain.
Now, the creatures at the top of the food chain - Wall Streeters, Lawmakers, Regulators, etc. - are the sharks. Members of the general public - the uninformed masses who count on Social Security, pension plans, and fair play - are the unprotected schools of fish. Day traders are the tiny grouper fish that follow the sharks around and try not to get eaten. They are free to swim around and nibble on detritus here and there. That's their choice. The smart fish are the ones who observe other species, learn to work the currents, and are extremely skeptical of groupthink.
It's deceptive to show a graph that only goes back to 2005. Of course the trend is up. But there were zero failures in 2005, so the trend could only go up. The fact is that failures from 2003-2007 were historically low. Go back to the early 90s. There were several every week. And we all survived...
Nick -- what do you think that normal lending is other than leveraged speculation? You are speculating on loans, not securities, but they're both debt instruments. If you think a CDO is hard to price, how about the probability of your local homebuilder going bust?
One very significant reason there have not been more bank failures is because the FDIC is no longer staffed to handle the closing function on a regular basis and has almost zero ability to handle and process a very large bank failure say above $3.5 billion in assets.
"One very significant reason there have not been more bank failures is because the FDIC is no longer staffed to handle the closing function"
I'm not sure I get this. If a bank is bust, they're bust, FDIC staff or no. Seems like you're saying if there are no doctors in town, no one will get sick.
Please don't feed the trolls.
Time to go long Tums® ?
I guess that would be GSK.
P.S. Sheila Bair is hot
Couldn't FDIC hedge its exposure by shorting the banks?
Bad and trending worse. How come the markets are up on news like this? Is it because GDP last quarter was 0.9?
I was looking at something to invest long in since I don't feel comfortable being as short as I am. I couldn't find anything. What are people buying? Everything looks overpriced.
I saw an interesting article in the NYT re housing.....
- NY Times
I wonder how much of the increase in loan loss reserves is borrowed money using as collateral future revenue streams gained from loans that are rapidly increasing in non performance thus requiring more loan loss reserves to hedge them using more borrowed money using as collateral ......
well, you get the picture.
(waaay OT)
charlie --
What are people buying?
Since you asked... I am currently long PRAA, MVL, MVC, and BID.
But if you invest based on anything you read on the Internet, you're crazy.
People who buy and sell or analyze stocks do so on the basis of the fundamentals of that company or business. They have spent years reviewing financials, management, PE's, etc. (presuming they even do that well). They are incapable or inexperienced at looking to external forces.
It would be like asking a building inspector to review the strength of a specific house. He may review the joints, look at type of wood, construction company etc. He will rate or recommend the house's staying power based upon the specifics of that house.
Meanwhile a tornando is screaming down the street toward the house he just gave high marks.
The inspector is no weather man and the change in consumer's ability to spend and rising fuel prices will do damage wholly independant of any one company's or sector's fundamental strength or the earnings power.
Just like all the experts missed the housing bubble, the credit crunch, etc. They missed the coming consumer crunch. Stock buyers today are judging the strength of the house on how it was built, not whether it's in the path of the tornado.
"This is a worrisome trend. It's the kind of thing that gives regulators heartburn."
Yeah...and a few depositors, too.
cd
I'm waiting for the spinners to come out and talk about how "BAD" the GDP actually was.
drob | 05.29.08 - 12:02 pm |
maximum trollage
I am long SOL, TEOTWAWKI, OMFG, HOOCOODANODE, and STFUBAIR.
Tanta & CR,
It is interesting to note that only negative news gets posted here. No positives. Like the GDP Growth report. The news to be very mixed, banks are having problems, credit is curtailed. But housing/consumer led recession is no where to be seen!!!
Mystery Meat, do you happen to know what the loan loss reserves, defaulting loan ratio is for the Bank of OMFG.
"The number of institutions on the FDICs Problem List increased from 76 to 90 in the first
quarter. Total assets of problem institutions rose from $22.2 billion to $26.3 billion. This is the sixth
consecutive quarter that the number of problem institutions has increased, from a historic low of 47
institutions at the end of third quarter 2006. The current level represents the largest number of
institutions on the list since third quarter 2004, when there were 95 problem institutions."
Banker | Homepage | 05.29.08 - 11:52 am
That's a pretty cool interactive little graph thingy. I guess it's not different in New Yawk after all.
"Nominal GDP in the first quarter totaled an estimated $14.2 trillion, a 3% annual rate of increase from the final quarter of 2007, which also registered a 3% gain. This two quarter growth rate in nominal GDP is typically associated with recessionary periods"
Wouldn't a Nominal GDP of 3% imply that Fed Funds rates need to stay no higher than 2% according to what Bill Gross was saying last year about an asset based economy trying to service it's debts? And if the FFR rose in this scenario it would force stocks and home prices down? In which case we will either have accelerating asset price drops or increasing inflation depending on the stance of the Fed. In other words, the GDP number is bad because it gives the Fed no room to maneuver and avoid inflationary pressure.
One thing to consider that I see in southern california-that many of the empty business buildings built recently are in the same areas where new communities sprouted like weeds. They all had corresponding business parks where you'd see empty rental space waiting for dental/medical/tax/dance schools/etc.
Well now that the housing crash has virtually halted new construction on homes in the area, and at the same time these are the same areas hardest hit by forclosures, there will be a hesitation to rent space here until housing in the area rebounds.
You may see CRE loans suffer until the housing market corrects. They are not as independant as one might think.
"But housing/consumer led recession is no where to be seen!!!"
Newbie | 05.29.08 - 12:13 pm | #
Take off the rose colored glasses and it'll be right there in front of ya.
Newbie,
People don't come here for what you get on CNBC. There are plenty of people out there eager to provide the "good" news. Especially people who profit from it.
People come here for the "other" side of the story.
Besides what kinda newspaper gives you story about Joe who woke up and made it to work without crashing. No, you get the story of the guy who did crash. You get the story of the bank that was robbed, not the other 150 that weren't.
Beware the police chief who feel's the need and is eager to point out all the crime that didn't happen in his city. Obviously he/she has a problem with increasing crime in their
How about Gold today? sector rotation into financials was powerful..Guess those s&p downgrades dont really count for much now days..
OT, but...
July crude oil futures are $3.01 lower at $128.02/ barrel.
Gasoline futures are about 3 1/2 gal lower.
Gold is down $25.40/oz.
Is it just me or are Treasury yields jumping. Anybody care to comment.
"Is it just me or are Treasury yields jumping. Anybody care to comment."
A 'troll' can give you a hint, maybe the GDP figure has something to do with it...
Average Joe,
I really like your house inspector and tornado analogy. I will use it also.
Should I credit "the wisdom of the Average Joe?"
Inflation expectations gaining reality. Fed can't cut any more. If nominal GDP were to improve then the FED could start raising rates in the future. GDP revision shows there may be room in the future.
Up 120 - makes sense with all the good news!!!!!!
Red Pill,
Thank you, use away! NO credit needed
The notion that people are rotating into stocks is something I don't believe. What is the new leadership if not oil and basic materials? There is none. We have slowing domestic growth, 5 years highs in inflation, record inflation worldwide and falling asset values at home. I think we are still in a dying bear market rally. The volume over the past month has been too weak for it to be the start of a new bull market. I think we will be at the old dow lows in less than a month with the financial services and banks leading the way down.
OT-Why do PM's get haircut at end of month and rotates into financials. Very similar pattern as last 2 mos ends...any ideas
cd,
Better question why rotate into financials at all? They keep going lower even when the market moves higher.
Come on! It's like every couple weeks on this site! Stocks (esp. financials) spring up from an oversold downtrend on light volume getting everyone excited and then when no one's looking they puke down on volume. Bear market rally.
Somebody already mentioned the big news today is in Crude, Gold, and Treasuries - all taking it on the chin.
Isn't there an FDIC site somewhere that lists "troubled" banks? I'd like to see the ones that are in danger.
"un autre canadien avec popcorn writes:
Mystery Meat, do you happen to know what the loan loss reserves, defaulting loan ratio is for the Bank of OMFG."
Oh, it's f'ugly, no doubt. But it's still better looking than Citi or Lehman.
Indymac would have to be among them. It has dropped from a 52 week high of about $38 to $1.80 today. What a short opportunity, now gone.
Is there a way to see the banks on their problem list?
"How about Gold today? sector rotation into financials was powerful..Guess those s&p downgrades dont really count for much now days..
cd"
There is a lot of coordinated action going on right now. Must prop things. Free markets are a fiction.
Confidence has turned to hope. And that is never a good thing.
FDIC's "problem list" isn't made public. Have to wait until they take'em over. Bottom line is don't keep balances >100K in any one institution.
Bubbles today in all areas are due to liquidity. The liquidity however is as much about the ease of moving money as anything else.
Think back before you could transfer money from one account to the next with the click of a mouse. When you had to get a check and wait for it to clear or sell an asset instead of just a index class. Mutual funds used to be the end-of-the day price, now you can instantly trade spiders and foreign funds etc.
Money can shoot from one asset class to the next in an instant.
Analogy alert--Picture an empty row boat half full of water. If the water is free to flow from one side of the boat to the other with no obstructions then you get all the water crashing from one side of the boat to the other and the natural sway of the boat due to waves is accentuated as all the weight from the water inside freely goes completely from one side to the next. It feeds upon itself exagerrating the normal ebb and flow of a gently rolling boat.
Now put dividers in the boat. So that the water is stuck in pockets and can't move quickly if at all. The weight will be unable to quickly slosh from one side to the next and you get a more even weight distribution.
Financial and technological innovations that have increased liquidity have removed the natural dividers that slowed the movement of money from one are of the investment world to the next.
Get used to it. The dividers are unlikely to be replaced since it would appear to be anti-capitalist and a move toward less efficiency.
"Confidence has turned to hope. And that is never a good thing."
Exactly people want to Believe in Gov't intervention, rate cuts, fiscal stimulus but these things have already been done starting in August and we are still below those levels. I remember seeing cramer on the today show in Jan 08 and he said it will be a great year for stocks. Why? Because it is an election year. ???????
Forever stamps?
More seriously...coal and anything involved in Nuclear. (but YMMV)
there is the mortgage implode meter:
The Mortgage Lender Implode-O-Meter - tracking the housing finance breakdown, related to Alt-A and subprime mortgages, lending fraud, predatory lending, housing bubble, mortgage banking, foreclosures, debt, consolidation, lawyers, class-action lawsuits
and boom bust blog has a list of 32 based on his own analysis, which reads pretty well to me (but that's not saying too much)
http://boombustblog.com/component/option,com_myblog/show,As-I-see-it-32-commercial-banks-and-thrifts-may-see-the-feces-hit-the-fan-blades.html/Itemid,20/
Sure enough, the CR contra-indicator worked again. Yesterday, CR reported on US bank troubles, today they are up big time. This past weekend, there was the sequel on oil, which is down big time since then. CR officially made it to my list of contra-indicators for financial markets.
O-Joe
Op Joe, I need to see more pattern than just 2 but you may be on to something..
"Yesterday, CR reported on US bank troubles..."
I never knew CR was the FDIC.
cd: to be honest I get wrong a lot, too.
O-Joe
I think O-Joe made a mistake in his name. I think he mispelled Opportunistic and his spell-check substituted another word.
Note to self-never short ANYTHING at end of month, spend more time with girlfriend, then short to make up for money well spent..
Free markets.
It's more free to some than others.
When you own 10% of the world's gold supply due to governments confiscating gold from private holders, you don't even need to sell it on the open market to manipulate the price.
You lend the gold to private deals who then use it to short on the market.
This shorting makes the dollar looks stronger, and gold weaker.
The game resets itself every 3 months on the 3rd monday. If you play it right, you can make 10% on the way up, and 10% on the way down using ETFs
HGU.TO (bull)
HOD.TO (bear)
This is multi-million dollar advice.
Enjoy.
Correction: HGD.TO (bear)
ITimes-I couldnt bring those symbols? up.
the ratio of non-performing assets to assets at state chartered institutions has tripled in the last 3 years QBP State Tables
They are on the TSX (Canadian dollar ETFs - also a bonus)
It-thanks for tip and bonus!
cd,
The IMF will be manipulating gold until this president's term is up (or interest rates start to increase). Whichever comes first.
I have been lucky to time a few plays so far. The shorting phase is happenning now and will stop (hopefully!) on June 16th.
So owning HGD.TO would have netted 15% in the last 2 days. It could keep going until the 16th, then it's time to switch back into HGU.to.
Please note: This is pure speculation - do your own DD as per usual.
FDIC
Subprime Mortgage Products
Interagency Illustrations of Consumer Information for Hybrid Adjustable Rate Mortgage Products
FDIC: FIL-40-2008: Interagency Illustrations of Consumer Information for Hybrid Adjustable Rate Mortgage Products
The new Bank-Implode-0-meter site:
The Bank Implode-O-Meter - Your play-by-play for the end game of modern banking.
FDIC does not publish its troubled bank list and never has and never will unless ordered by Congress.
If you want advice from smart people on the internet, try the 5-star stocks fro Motley Fool:
Stats
Some of my best short ideas came from them, too.
Effe
It-thanks will do dd. on quick glance 3 mos spike noted..Good day to ya..
IMO, the boombustblog list of banks could be as skillfuly chosen by a monkey throwing darts.
Possibly, I'm mostly in this for intellectual stimulus, not financial. At least he has a rationale, he's putting his money behind it, and he's too small to change the market himself. Being regional banks there are massive regional risk differences that his overall numbers don't capture. But heck, throwing darts at a list of banks right now is almost always going to pick out a winner (read: loser) with how things are.
I was amazed to see how leveraged they all are on his charts, even the smaller ones. That screams house of cards to me, but what can I say, I'm a neophyte.
The disturbing part of Bair's statements, imho, is the part about the banks most in trouble are those that profit from securities trading.
If the FDIC bails out banks that made money with leveraged speculative securities trading during the boom, and are now paying the price for risky gambles with their money, that's the definition of privatizing profits while socializing losses. It is inexcusable that banking regulators allowed FDIC insured banks to gamble with the deposits they are insuring to increase their profits.
Being fired is not enough of a penalty for federal regulators who allowed this to happen; they should be personally liable for losses absorbed by the FDIC. I guarantee existent, awake oversight when personal liability is attached, as opposed to whatever Bair has been doing for the last 6 years.
Nick
FDIC managers got bonuses and promotions for reducing FDIC staffing and expenses. The entire system during the Bush years was to reduce the size of the FDIC under former Chairman Don Powell. There was NO mandate whatsover to deprive bank's of power and promise of the riches to come. Sorry...
Average Joe, the process you describe with partitions in boats is exactly what they use in ships and in some semi-tankers to prevent slosh. Warning: Flashback - I remember being taught in my Navy ROTC classes that it was better in a damage control situation to have a completely flooded compartment than a half-filled one - the momentum from slosh in a half-filled compartment would seriously decrease ship stability, and enough of them sloshing could easily capsize an otherwise buoyant ship.
Nick: of how many bank failures are you talking here? I heard we had 3 (in words: three) bank failures this year. I would hold my fear and anger back for when real problems will hit the bank system, not this current mortgage bump. Otherwise, you'll get ulcers very soon.
O-Joe
Don't worry, the bank failures are coming as CRE defecates in the sleeping device in late summer.
Free markets are NOT a fiction. Being that it's Analogy Day:
The Market is the ocean - vast, deep, and teeming with life. Fish of all sizes can thrive in a big sea. They can even grow and move higher up the food chain.
Now, the creatures at the top of the food chain - Wall Streeters, Lawmakers, Regulators, etc. - are the sharks. Members of the general public - the uninformed masses who count on Social Security, pension plans, and fair play - are the unprotected schools of fish. Day traders are the tiny grouper fish that follow the sharks around and try not to get eaten. They are free to swim around and nibble on detritus here and there. That's their choice. The smart fish are the ones who observe other species, learn to work the currents, and are extremely skeptical of groupthink.
See? That's your free market, in a seashell.
It's deceptive to show a graph that only goes back to 2005. Of course the trend is up. But there were zero failures in 2005, so the trend could only go up. The fact is that failures from 2003-2007 were historically low. Go back to the early 90s. There were several every week. And we all survived...
Nick -- what do you think that normal lending is other than leveraged speculation? You are speculating on loans, not securities, but they're both debt instruments. If you think a CDO is hard to price, how about the probability of your local homebuilder going bust?
One very significant reason there have not been more bank failures is because the FDIC is no longer staffed to handle the closing function on a regular basis and has almost zero ability to handle and process a very large bank failure say above $3.5 billion in assets.
"One very significant reason there have not been more bank failures is because the FDIC is no longer staffed to handle the closing function"
I'm not sure I get this. If a bank is bust, they're bust, FDIC staff or no. Seems like you're saying if there are no doctors in town, no one will get sick.
AOTC,
IMO what FFDIC is trying to get across is a plague in a town with only 1 doctor.
Plenty of sick, dead and dying, but the doc can't even manage triage because there's no EMT's to help, let alone RN's.
It does seem like the 1 horse banks are getting a lot of enforcement orders rather than getting shut down outright.