As I mentioned earlier, I just can't see this team taking down a big bank in this environment. Their action could potentially cause panic and take down other big banks.
I believe the plan is allow as many banks as possible to limp along and somehow rebuild their capital base.
The FDIC's angry response post Indymac suggests that they felt it could have been prevented and almost certainly delayed.
As much as I'd like to see the system washed clean. I think this is going to be a marathon.
I know one business owner who has at any given time between $200K to a few million in his business bank account - mostly to meet payroll and make payments to suppliers. The money doesn't stay there long. But he isn't worried about bank failures.
If a large bank were to go under, many small businesses would be in trouble. The 24/7 newscycle would surely dig up stories of honest businessmen forced to layoff workers because they can't meet payroll or pay their suppliers. This would be bad.
I think this is going to take a long time to work itself out. And regulators are going to very careful with their words and actions.
Seniority Troy,
Also C has a sooner call date, should that paper ever look expensive again.
OTOH, C gets a big panic sell every once in a while during these periodic panics.
The difference between 18% and 20% is sort of academic- if it goes belly up- it still becomes a zero.
I think they can drag out this fiasco long enough that folks with stable finance can leg through to the inflation coming online through the system and survive to profits on the other side.
Folks with unstable finance, OTOH, quite simply are dead.
This includes a bunch of homebuilders with essentially death spiral financing from their "friendly" lenders.
A great example is ryl lowering their loan covenants equity requirements for their unused credit line just before declaring a loss that would have put them in violation.
Stable financing is the key- who cares about the rate- just how easy does it go poof?
9 branches...PFFFFF. You call that a bank? I've seen bigger banks in a LEGO Universe : Creation Lab - Display Media small town. That bank ain't worth the ascii text in this comment.
California's attorney general is reviewing a request by former employees of IndyMac Bancorp Inc to investigate whether a New York senator triggered the bank's collapse by releasing confidential information.
How do brokered CDs fall under the FDIC limits? Do they go way over the 100K-300K cap? Are they all under a single account for the broker? Are they in smaller accounts? Is the FDIC going to make them whole if they fail?
In a memo today to authorized dealers, Cathy Laperle, a Mint official, said the coins will be allocated ``on a weekly basis until we are able to meet demand.'' The Mint will resume taking orders Aug. 25, Laperle said.
Citing ``unprecedented demand,'' the Mint halted sales Aug. 15. Gold prices soared over the past year, with the most active gold futures reaching a record $1,033.90 an ounce on March 17. Prices have since declined.
Lola, get my lawyer on the phone please...
Bloomberg
FDIC's IndyMac Borrower Aid Is `Dangerous' for Bonds
We think IndyMac, under FDIC's watchful eye, will interpret the MBS agreements more loosely and err on the side of modifications over other solutions, including foreclosure,'' wrote Greenberg, who is based in New York.This can be dangerous.''
``It hurts the bondholders that are off any shelf of any bank that is perceived as weak and potentially seizure bait, because the collateral is now in question,'' Mann said." FDIC's IndyMac Borrower Aid Is `Dangerous' for Bonds (Update2) - Bloomberg.com
Well seeking alpha had some nice analysis today. I'd go check it out. It looks very much like fiat gold (contracts that are supposed to be but aren't backed by metal in the vault) are suppressing prices.
I know, I know, I'm no tinfoil hatter, but still, when PM dealers can't get the stuff and the price isn't exploding...it does seem a bit fishy....HMMM?
Oh, I've just been informed that I am a Super Colander Tin Foil Hat wearer. Never mind.
sdtfs writes:
With the price of corn wouldn't full granaries be worth more than bank branches? Really?
If you search posts from this time last year - and I believe this was from Tanta - there's one about some institution having reserves in its meat lockers worth more than its value on paper... or something.
"Glod" is bifurcating just exactly as what happened with oil. There's real glod and paper glod. The paper glod "owners" are discovering what people who thought they had counter party insurance have already found out. A promise of glod is worth the promise not the glod.
Hey Rob Dawg- how are you going to listen to "Bad Girls" without thinking of Sheila, or "she works hard for the money"? and "MacArthur Park" is going to bring up some strange associations too.
August 29th is the last Friday of the month. Anyone over the limit on deposits that week could face a real nightmare scenario if their bank failed, no? Assuming the account is flush with funds for September 1st payments.
Did we ever find out how the messiah banks get chosen, and by whom? Messiah banks meaning the ones that enter into the purchase and assumption agreement for the failed banks. Sheila has an auction on Thursday night?
The girls in New York City, they all march for women's lib.
And Better Homes and Garden shows, the modern way to live.
And the pill may change the world tomorrow, but meanwhile, today:
Here in Topeka, the flies are a buzzin';
The dog is a barkin' and the floor needs a scrubbin';
One needs a spankin' and one needs a huggin';
And one's on the way.
Oh yeah, Here in Topeka, the rain is a fallin';
The faucet is a drippin' and the kids are a bawlin';
One of them a toddlin' and one is a crawlin';
And one's on the way.
Dryfly,
Ahhh the Flint Hills...Beautiful desolation.
North of Wichita (in Koch county) I picked out a 10 square mile ranch that I have always lusted after. It was close to the cattle pen overpass.
No civilization for hundreds of square miles. What a feast.. My 10,000 sq ft hovel with golf course, landing strip, helio pad, smoke house and deep wells.
Blissful autarky.
Just dreamin. A case of white line fever over and over.
Hurricane Faye will get us out of the doldrums. Lots of houses & infrastructure to repair, a glodsend for small repair shops, carpet shops, furniture stores.
And heheheheh, the insurance companies have to pay will no enormous deductible, 'cause Faye was never a hurricane!!!
Our homestead did not flood, but the lawns turned into shallow lakes.
North of Wichita (in Koch county) I picked out a 10 square mile ranch that I have always lusted after. It was close to the cattle pen overpass.
We went by them - the guy I was with asked about them, why they were empty & 'unused'. I explained they'll be used when its round up. Again - it blew his mind... 'round ups'??? This is 2008 not 1878.
I love that area too - I LOVE range & prairie. But the Flint Hills are my SECOND most favorite places though... I like the Sand Hills of Nebraska even more... my fantasy locations are the ranches just west of Valentine Nebraska overlooking the Niobrara. That and the 'pot hole lakes' area just south of Valentine.
This is beyond weird. On Bankrate.com as of the end of March, Columbian had a ROA of 2.84% and a ROE of 39% both of which are incredibly good. But at the same time its Texas ratio was 91%. Question? Did the bank lie about its condition in the first quarter report or did it go downhill so fast that it was insolvent by August? Unhappily bankrate.com has not yet been updated to the 6/30 point. In fact bankrate.com gave the bank a 3 star or average rating whereas other KS banks at 3/31 had only on star and have yet to be closed.
dryfly: well isn't all that marvelous Nebraska land owned by Ted Turner now? As an old Nebraskan myself I remember when the sand hills were thought of as basically worthless, good only for the sand pit lakes filled with croppies and bluegills.
So the question is what causes a bank run on a big bank?
Charles Schumer
No, not really. Schumer merely told the truth, that the bank was insolvent. It was the truth that caused the run...the truth leaking out in a system based on lies, one might say (with some exaggeration).
jim writes:
dryfly: well isn't all that marvelous Nebraska land owned by Ted Turner now? As an old Nebraskan myself I remember when the sand hills were thought of as basically worthless, good only for the sand pit lakes filled with croppies and bluegills.
jim | 08.23.08 - 6:29 pm | #
TT owns a lot of the deserted barrier islands along the east coast as well - as bad an owner as he might be, he is probably better than the gov't now (Cheney would be developing & drilling all over them now if 'he' owned them)...
Sand Hills ought to be Nat'l Grasslands & barrier islands all ought to be Nat'l Seashore - there really is little value other than 'temporary recreation'... any permanent development will lead to eventual destruction (for them and others near them)...
Develop barrier islands & you put adjacent inland communities at much higher risk of storm damage. Develop the sand hills & you recreate the conditions leading up to 'Dust Bowl' where it all blew away over much of the Midwest.
I fear we will see both bad results again in our lifetimes.
Chilli-Kothee
thats how you say first.
We have a winner!
$260 million in brokered deposits!
yowza!
maybe the fdic is going into the banking business based on the solicitation of additional cd deposits for indymac!
Federal Super Savings SIV!!!
Someday this war's gonna end...
Do we get two? Perhaps another small one.
As I mentioned earlier, I just can't see this team taking down a big bank in this environment. Their action could potentially cause panic and take down other big banks.
I believe the plan is allow as many banks as possible to limp along and somehow rebuild their capital base.
Good news
"Good news :)"
Is it dark yet where you live? Notice any greasy haired woman lurking around your building?
There is still time for one more on the West coast...
We need ~10/week to reach the 200 mark. If they dribble in like this there could be 40/week in between administrations.
"This year, a total of nine FDIC-insured institutions have been closed. "
AND 9 Credit Unions
"Is it dark yet where you live? Notice any greasy haired woman lurking around your building?"
My new URL will hopefully keep her away...
The FDIC's angry response post Indymac suggests that they felt it could have been prevented and almost certainly delayed.
As much as I'd like to see the system washed clean. I think this is going to be a marathon.
I know one business owner who has at any given time between $200K to a few million in his business bank account - mostly to meet payroll and make payments to suppliers. The money doesn't stay there long. But he isn't worried about bank failures.
If a large bank were to go under, many small businesses would be in trouble. The 24/7 newscycle would surely dig up stories of honest businessmen forced to layoff workers because they can't meet payroll or pay their suppliers. This would be bad.
I think this is going to take a long time to work itself out. And regulators are going to very careful with their words and actions.
Where's the Nothingburger tag?
Ah well...
Thread music:
YouTube - Dust In The Wind
crispy&cole, no bank failures in the last 12 minutes ...
Best to all.
Yeah, crispy. Why does everyone ignore CUs?
hey allenm doing some research on AHR I see that their AHR-D issue is 5x more liquid and currently pays a 130bps greater divie.
You might want to move out of the C and into the D.
2.5 hours from post to first failure.
Come on, CR, you did better than that when you were on vacation!
Shnaps, Ouch. That hurt my ears.
Best wishes.
Nemo, That was pure luck (although I thought IndyMac might go down). I'm leaving next Friday for a hiking trip - so maybe something huge will happen!
Best to all.
It's a song composed by Kansas - get it? They're from Topeka, even!
I know, it is painful. I could have posted the Will Farrell version, tho. That's even worse.
Seniority Troy,
Also C has a sooner call date, should that paper ever look expensive again.
OTOH, C gets a big panic sell every once in a while during these periodic panics.
The difference between 18% and 20% is sort of academic- if it goes belly up- it still becomes a zero.
I think they can drag out this fiasco long enough that folks with stable finance can leg through to the inflation coming online through the system and survive to profits on the other side.
Folks with unstable finance, OTOH, quite simply are dead.
This includes a bunch of homebuilders with essentially death spiral financing from their "friendly" lenders.
A great example is ryl lowering their loan covenants equity requirements for their unused credit line just before declaring a loss that would have put them in violation.
Stable financing is the key- who cares about the rate- just how easy does it go poof?
Someday this war's gonna end...
RIP Columbian Bank and Trust
"...nothing lasts forever, 'cept the Earth and sky..."
So what will be the first big failure?
Thats when it will start to get interesting.
...........
shnaps - more cowbell!
9 branches...PFFFFF. You call that a bank? I've seen bigger banks in a LEGO Universe : Creation Lab - Display Media small town. That bank ain't worth the ascii text in this comment.
Cheers,
In the short term, I think the only thing that causes a big bank failure is a bank run.
So the question is what causes a bank run on a big bank?
So the question is what causes a bank run on a big bank?
Charles Schumer
Do you know if Chuck is doing a search-and-replace on his Indymac letter as we speak?
Do you know if Chuck is doing a search-and-replace on his Indymac letter as we speak?
He does the letters right after he gets his shorts into place.
Mr. Beach,
I think that depends on who you ask:
California's attorney general is reviewing a request by former employees of IndyMac Bancorp Inc to investigate whether a New York senator triggered the bank's collapse by releasing confidential information.
The Big Picture
............
shnaps,
If you ever do that again I'm gonna do...something really nasty...don't know what...but I swear it will be unpleasant.
Cheers,
HA hahahha just what i was thinking gents!
.......
And the heat-death of the Universe will take care of those too.
Looking over suspiciously high CD rates, I'll put my monopoly money on M&T Bank.
How do brokered CDs fall under the FDIC limits? Do they go way over the 100K-300K cap? Are they all under a single account for the broker? Are they in smaller accounts? Is the FDIC going to make them whole if they fail?
I hear five of the nine branches are actually granaries.
Yay! Bank failure Friday!
Needs to be a feature...
U.S. Mint to Resume Distribution of American Eagle Gold Coins
U.S. Mint to Resume Distribution of American Eagle Gold Coins - Bloomberg.com
The U.S. Mint said it will resume limited distribution of its 1-ounce American Eagle Gold coins a week after suspending sales because investors and collectors depleted the supply.
In a memo today to authorized dealers, Cathy Laperle, a Mint official, said the coins will be allocated ``on a weekly basis until we are able to meet demand.'' The Mint will resume taking orders Aug. 25, Laperle said.
Citing ``unprecedented demand,'' the Mint halted sales Aug. 15. Gold prices soared over the past year, with the most active gold futures reaching a record $1,033.90 an ounce on March 17. Prices have since declined.
L
A
M
E
!
tranches of lunesta(tm),
"I hear five of the nine branches are actually granaries."
I hear 7 of 9 is pretty hawt.
STARTREK.COM : Biography
Cheers,
Misean
You still long gold?
What direction (short and long term) is the price headed do you think?
..........
MoT,
Yeah I've been following that weirdness too.
Strange doins agoin' on.
Cheers,
Lola, get my lawyer on the phone please...
Bloomberg
FDIC's IndyMac Borrower Aid Is `Dangerous' for Bonds
We think IndyMac, under FDIC's watchful eye, will interpret the MBS agreements more loosely and err on the side of modifications over other solutions, including foreclosure,'' wrote Greenberg, who is based in New York.This can be dangerous.''
``It hurts the bondholders that are off any shelf of any bank that is perceived as weak and potentially seizure bait, because the collateral is now in question,'' Mann said."
FDIC's IndyMac Borrower Aid Is `Dangerous' for Bonds (Update2) - Bloomberg.com
ades,
Well seeking alpha had some nice analysis today. I'd go check it out. It looks very much like fiat gold (contracts that are supposed to be but aren't backed by metal in the vault) are suppressing prices.
I know, I know, I'm no tinfoil hatter, but still, when PM dealers can't get the stuff and the price isn't exploding...it does seem a bit fishy....HMMM?
Oh, I've just been informed that I am a Super Colander Tin Foil Hat wearer. Never mind.
Cheers,
SCTFHW!!!
LOL...
I'm slowly becoming one too....
I'll check the seeking alpha...
(I've been staying away from that site because the articles seem to becoming weaker / weird...)
.............
With the price of corn wouldn't full granaries be worth more than bank branches? Really?
Past 5PM & Crickets on the failed banks page. Letdown.
I want my WAMU!!!
The price of corn may have done them in. There are a lot of small failing ethanol ventures in that part of the country.
sdtfs writes:
With the price of corn wouldn't full granaries be worth more than bank branches? Really?
If you search posts from this time last year - and I believe this was from Tanta - there's one about some institution having reserves in its meat lockers worth more than its value on paper... or something.
Blast from the past if someone can find it!
"Glod" is bifurcating just exactly as what happened with oil. There's real glod and paper glod. The paper glod "owners" are discovering what people who thought they had counter party insurance have already found out. A promise of glod is worth the promise not the glod.
Do you know if Chuck is doing a search-and-replace on his Indymac letter as we speak?
No, he's sending convention fundraising invitations first.
Hey Rob Dawg- how are you going to listen to "Bad Girls" without thinking of Sheila, or "she works hard for the money"? and "MacArthur Park" is going to bring up some strange associations too.
muggles
Glod is glood
Glod is glate
Glod protect me
From inflate
Burma Shave
I better switch this thing off. Haven't even had the first martuli!
Dark Side of the Rainbow
YouTube - Pink Floyd-Dark Side of the Rainbow 3
BOR-RING
I was hoping for something bigger!
bearly: I want my WaMu!!!
You want it? You got it!
Wednesday
10:00 Dan Mudd interview
11:00 A Farewell to Arms
(you can't make this stuff up)
Ok, one more before Mr. Monk
Ben met Anna
Made a hit
Neglected beard
Ben-Anna split
Burma Shave
It is not 6:00 pm PST yet? Any taker son DSL?
Actually FirstFed is offering some serious CD rates
ew post up
No double or triple header this week. That just stacks up the deck. Gonna be a busy last part of the 2nd half!
Mr. Beach writes: So the question is what causes a bank run on a big bank?
Bloggers. (and their commenters...)
(Uh-oh...)
Failed banks and cash flow...
August 29th is the last Friday of the month. Anyone over the limit on deposits that week could face a real nightmare scenario if their bank failed, no? Assuming the account is flush with funds for September 1st payments.
Expected but not to worry 'cause the FDIC seezz:
"How to "Get a Good Night's Sleep" with FDIC Insurance: Answers to Common Questions"
FDIC: Press Releases - PR-68-2008 8/21/2008
Did we ever find out how the messiah banks get chosen, and by whom? Messiah banks meaning the ones that enter into the purchase and assumption agreement for the failed banks. Sheila has an auction on Thursday night?
Ffdic, any insight?
Uncle Billy,
They put them out for bid.
These closures are not really 24 hour events. Perhaps one of the reasons that closures have been slow is that there are few bidders in the market.
Shnaps writes:
It's a song composed by Kansas - get it? They're from Topeka, even!
I know, it is painful. I could have posted the Will Farrell version, tho. That's even worse.
Shnaps | Homepage | 08.22.08 - 7:37 pm | #
Well shucks if we're gonna have some music cel-e-bratin' Topeka... I know just the songs from one a my fav-o-rite little country sangers...
One's On The Way
Some lyrics...
The girls in New York City, they all march for women's lib.
And Better Homes and Garden shows, the modern way to live.
And the pill may change the world tomorrow, but meanwhile, today:
Here in Topeka, the flies are a buzzin';
The dog is a barkin' and the floor needs a scrubbin';
One needs a spankin' and one needs a huggin';
And one's on the way.
Oh yeah, Here in Topeka, the rain is a fallin';
The faucet is a drippin' and the kids are a bawlin';
One of them a toddlin' and one is a crawlin';
And one's on the way.
dryfly,
Loretee Linn. How appropriate.
She was a comfort driving from Manhattan KS to Boulder for our pledge sneak.
Ross I've been waiting YEARS for something appropriate to use that song... thank you Columbian B&T!!!
BTW I was out there this last week... Wichita, Topeka, KC and then blasted up I29 to Fargo... doing aerospace plants.
Had a guy with me from out east - first time through the Flint Hills. I think it kinda blew his mind.
I told him he should come in the spring when they are burning the range.
New FDIC employees need training so when the to big to fail Fail.
jo6pac
Dryfly,
Ahhh the Flint Hills...Beautiful desolation.
North of Wichita (in Koch county) I picked out a 10 square mile ranch that I have always lusted after. It was close to the cattle pen overpass.
No civilization for hundreds of square miles. What a feast.. My 10,000 sq ft hovel with golf course, landing strip, helio pad, smoke house and deep wells.
Blissful autarky.
Just dreamin. A case of white line fever over and over.
Notice any greasy haired woman lurking around your building?
How can you talk about Topeka songs without remembering this one?
YouTube -
No glod with the glod contracts, eh?
My little bit of glod is in hard coin.
Hurricane Faye will get us out of the doldrums. Lots of houses & infrastructure to repair, a glodsend for small repair shops, carpet shops, furniture stores.
And heheheheh, the insurance companies have to pay will no enormous deductible, 'cause Faye was never a hurricane!!!
Our homestead did not flood, but the lawns turned into shallow lakes.
North of Wichita (in Koch county) I picked out a 10 square mile ranch that I have always lusted after. It was close to the cattle pen overpass.
We went by them - the guy I was with asked about them, why they were empty & 'unused'. I explained they'll be used when its round up. Again - it blew his mind... 'round ups'??? This is 2008 not 1878.
I love that area too - I LOVE range & prairie. But the Flint Hills are my SECOND most favorite places though... I like the Sand Hills of Nebraska even more... my fantasy locations are the ranches just west of Valentine Nebraska overlooking the Niobrara. That and the 'pot hole lakes' area just south of Valentine.
Well there is another KS bank that I would think would have been closed too: the Bank of Lebos. Maybe it's too small to bother to close. Whocoodanode?
This is beyond weird. On Bankrate.com as of the end of March, Columbian had a ROA of 2.84% and a ROE of 39% both of which are incredibly good. But at the same time its Texas ratio was 91%. Question? Did the bank lie about its condition in the first quarter report or did it go downhill so fast that it was insolvent by August? Unhappily bankrate.com has not yet been updated to the 6/30 point. In fact bankrate.com gave the bank a 3 star or average rating whereas other KS banks at 3/31 had only on star and have yet to be closed.
dryfly: well isn't all that marvelous Nebraska land owned by Ted Turner now? As an old Nebraskan myself I remember when the sand hills were thought of as basically worthless, good only for the sand pit lakes filled with croppies and bluegills.
So the question is what causes a bank run on a big bank?
Charles Schumer
No, not really. Schumer merely told the truth, that the bank was insolvent. It was the truth that caused the run...the truth leaking out in a system based on lies, one might say (with some exaggeration).
Roubini says hundreds are insolvent. Long way to go still. Long road a- winding.
jim writes:
dryfly: well isn't all that marvelous Nebraska land owned by Ted Turner now? As an old Nebraskan myself I remember when the sand hills were thought of as basically worthless, good only for the sand pit lakes filled with croppies and bluegills.
jim | 08.23.08 - 6:29 pm | #
TT owns a lot of the deserted barrier islands along the east coast as well - as bad an owner as he might be, he is probably better than the gov't now (Cheney would be developing & drilling all over them now if 'he' owned them)...
Sand Hills ought to be Nat'l Grasslands & barrier islands all ought to be Nat'l Seashore - there really is little value other than 'temporary recreation'... any permanent development will lead to eventual destruction (for them and others near them)...
Develop barrier islands & you put adjacent inland communities at much higher risk of storm damage. Develop the sand hills & you recreate the conditions leading up to 'Dust Bowl' where it all blew away over much of the Midwest.
I fear we will see both bad results again in our lifetimes.