Last weekend I wrote an article detailing "Why I Remain a Pessimist". Take a look at this chart, does a plunge in earnings like we have seen the past year warrant a 50% rally in the S&P 500?-Lou
Wednesday, August 5, 2009
Chart Of The Day
Last weekend I wrote an article detailing "Why I Remain a Pessimist". Take a look at this chart, does a plunge in earnings like we have seen the past year warrant a 50% rally in the S&P 500?-Lou
Dollar Downer
I have been warning you for some time that the U.S. dollar is dying a slow death. The pace of the dollar's demise seems to be picking up lately. Protection can be found in all things gold and silver. A 10-15% exposure to precious metals is a must in all portfolios.-Lou
When the dollar index moved back above 80, chart watchers with a long-term bent declared a breakdown failure and the technical resurgence of the greenback. Although volatility was huge, the index remained above the 79-80 zone to set up a floor of support. As of Monday, that floor is broken.
With the benefit of hindsight, we can see that financial and economic turmoil was the real culprit on the dollar's volatile comeback. Now as economic news improves and the appetite for riskier investments such as stocks returns, the dollar's appeal is gone. Indeed, we can see in the chart that the final peak in the dollar was roughly equal to the bottom in the stock market.
The big flaw, however, in using the dollar index to forecast trends in the dollar is that it is comprised of a strange basket of other currencies. Further, more than half of its weight is devoted to the euro and that makes it less representative of all capital flows into and out of the United States.
For example, nearly 8% comes from Sweden and Switzerland
The Greenback Is Broken
THE U.S. DOLLAR INDEX, which tracks the dollar against other major currencies, fell below its important June low of 78.33 late last week. On Monday morning, it was trading at an 11-month low.
The bear trend from March continues with no meaningful support in sight.
Roughly two years ago, when the dollar was in its previous bear market run, the dollar index had moved under a multidecade support level at 80 (see Chart 1). At the time, the subprime-mortgage crisis was just unfolding.
The bear trend from March continues with no meaningful support in sight.
Roughly two years ago, when the dollar was in its previous bear market run, the dollar index had moved under a multidecade support level at 80 (see Chart 1). At the time, the subprime-mortgage crisis was just unfolding.
After reaching a low near 71, the dollar spent several months moving sideways until July 2008. Although still several weeks before the stock market started its slow motion crash in September, fear had gripped the world's financial markets. Stocks and corporate bonds were spiraling lower.
But it was just then that the dollar began to rise sharply. Money was moving to the perceived safety of U.S. Treasuries and that sparked the demand for dollars.
But it was just then that the dollar began to rise sharply. Money was moving to the perceived safety of U.S. Treasuries and that sparked the demand for dollars.
When the dollar index moved back above 80, chart watchers with a long-term bent declared a breakdown failure and the technical resurgence of the greenback. Although volatility was huge, the index remained above the 79-80 zone to set up a floor of support. As of Monday, that floor is broken.
With the benefit of hindsight, we can see that financial and economic turmoil was the real culprit on the dollar's volatile comeback. Now as economic news improves and the appetite for riskier investments such as stocks returns, the dollar's appeal is gone. Indeed, we can see in the chart that the final peak in the dollar was roughly equal to the bottom in the stock market.
The big flaw, however, in using the dollar index to forecast trends in the dollar is that it is comprised of a strange basket of other currencies. Further, more than half of its weight is devoted to the euro and that makes it less representative of all capital flows into and out of the United States.
For example, nearly 8% comes from Sweden and Switzerland
Tuesday, August 4, 2009
Chart Of The Day
This chart shows a dramatic decline in tax revenues to the Federal government. The defict will continue to balloon and the dollar will continue to decline. The same thing is happening to state's tax revenues.-LouAn Interesting Read
I found this article to be both interesting and frightening. I too have been hearing rumors that a bank holiday will be declared in the near future (Sept-Oct). I also have been hearing that foreign embassies have been stocking up on non US currency in anticipation of a "dislocation" of the U.S. dollar. I'm not saying it is true, just throwing it out there for you to interpret yourself.-Lou
"A Tremendous Secret"
by John Rubino
................Last week FOFOA posted a long article on the coming devaluation of the dollar and how it might play out. He thinks it will be sprung on us without warning -- sooner rather than later:
The point is that during times of transition, surprises are always the order of the day. We have a crazy-out-of-control government that has given in to the temptation of printing its way out of this mess. The deflationists view this as an exercise in futility, while the inflationists say that you cannot print these amounts of dollars without it affecting the markets sooner or later.
A few cunning analysts are hedging their bets saying we will see another deflationary collapse first, followed by a bout of high inflation. But nearly all of the pundits who are still predicting "doom" have lengthened their horizon to several years to make way for the slow speed at which this train is tumbling down the tracks.Frankly, I'm not buying it.Call me contrarian, but I say that when the rubber band breaks this time it will snap back with a speed and fury that will make your head spin. In fact, I think that the longer this drags out (and I'm only talking weeks and months now), the more abrupt the correction will be.
Both the 38 year timeline and the 96 year timeline have created an imbalance in the fractional reserve system that has gone parabolic in the last decade. I am talking about gold. No, the price of gold has not gone parabolic, but the ratio of available gold to outstanding paper currency HAS gone parabolic. The central banks of the world are well aware of this. It is why they have slowly, inconspicuously changed from net sellers into net buyers.
This gradual shift is extremely significant, because as net sellers they were supporting their own fiat regime. But now as net buyers, they, as a group, are stressing it. Why would they do this unless they knew it was about to reset?This fractional gold reserve imbalance is the one imbalance the media and governments do not want you to know about.
.” Now, at least three things can be gleaned from all this:
1) FOFOA is right that the world’s governments stand to gain most from a surprise devaluation, since it will prevent us commoners from preemptively swapping our paper for real things, setting off an inflation that would make an even deeper devaluation necessary. There's a rumor that I was reluctant to mention when it first started circulating, because it seemed a little too far down the tin foil hat / black helicopter road. But in this context it seems pretty reasonable.
According to widely-followed newsletter writers Harry Schultz and Bob Chapman:
”Some US embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of US cash to purchase currencies from those govts, quietly. But not £’s. Inside the State Dept there is a sense of sadness & foreboding that ‘something’ is about to happen, unknown re a date—just that within 180 days, but could be 120-150 days.
”Bob quotes another source that “Panasonic has told their people to be back in Japan by Sept 09.”Harry Schultz’s remarkable take on the situation:“My HSL suspicion is that the elite plan another FDR style “bank holiday” of indefinite length, perhaps very soon, to let the insiders sort-out the bank mess which is getting more out of their control every day.
Insiders want/need to impose new bank rules. Widespread nationalization could result, already under way. It could also lead to a formal US$ devaluation, as FDR did by revaluing gold (& then confiscating it). But devalue against what? The euro? Doubtful. Gold? Maybe. Or vs. the IMF basket of currencies (which seems more likely)—& much in the news recently.Any kind of bank holiday will push the US$ lower, which may be a bonus benefit to their ongoing scenario of letting the $ fall. Such a fall would get the devaluation they want without having to declare it. In sum, the insiders want more bank & system control, fewer banks & a lower US$. A bank holiday would suit all their needs."
2) The details of the plan will spread within an ever-widening circle of banking and government folks who, like Sir Robert, will demand the chance to profit from the insider trade of the century. Because such a secret is impossible to contain for long, once in place the plan has to be executed as soon as possible.3) If the rest of us play it right, we’ll be able to at least protect ourselves, and maybe even make out (in percentage terms at least) like Goldman Sachs no doubt will.
Harry Shultz: “Obviously, U can’t open safeboxes if the banks are closed, so plan accordingly. During the FDR bank holiday, thousands of banks never reopened; it was a face-saving way of shutting them down. I would guess the same would occur today; thousands have little or no net value, loaded with debt, bad mortgages.”
READ ENTIRE ARTICLE HERE
"A Tremendous Secret"
by John Rubino
................Last week FOFOA posted a long article on the coming devaluation of the dollar and how it might play out. He thinks it will be sprung on us without warning -- sooner rather than later:
The point is that during times of transition, surprises are always the order of the day. We have a crazy-out-of-control government that has given in to the temptation of printing its way out of this mess. The deflationists view this as an exercise in futility, while the inflationists say that you cannot print these amounts of dollars without it affecting the markets sooner or later.
A few cunning analysts are hedging their bets saying we will see another deflationary collapse first, followed by a bout of high inflation. But nearly all of the pundits who are still predicting "doom" have lengthened their horizon to several years to make way for the slow speed at which this train is tumbling down the tracks.Frankly, I'm not buying it.Call me contrarian, but I say that when the rubber band breaks this time it will snap back with a speed and fury that will make your head spin. In fact, I think that the longer this drags out (and I'm only talking weeks and months now), the more abrupt the correction will be.
Both the 38 year timeline and the 96 year timeline have created an imbalance in the fractional reserve system that has gone parabolic in the last decade. I am talking about gold. No, the price of gold has not gone parabolic, but the ratio of available gold to outstanding paper currency HAS gone parabolic. The central banks of the world are well aware of this. It is why they have slowly, inconspicuously changed from net sellers into net buyers.
This gradual shift is extremely significant, because as net sellers they were supporting their own fiat regime. But now as net buyers, they, as a group, are stressing it. Why would they do this unless they knew it was about to reset?This fractional gold reserve imbalance is the one imbalance the media and governments do not want you to know about.
.” Now, at least three things can be gleaned from all this:
1) FOFOA is right that the world’s governments stand to gain most from a surprise devaluation, since it will prevent us commoners from preemptively swapping our paper for real things, setting off an inflation that would make an even deeper devaluation necessary. There's a rumor that I was reluctant to mention when it first started circulating, because it seemed a little too far down the tin foil hat / black helicopter road. But in this context it seems pretty reasonable.
According to widely-followed newsletter writers Harry Schultz and Bob Chapman:
”Some US embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of US cash to purchase currencies from those govts, quietly. But not £’s. Inside the State Dept there is a sense of sadness & foreboding that ‘something’ is about to happen, unknown re a date—just that within 180 days, but could be 120-150 days.
”Bob quotes another source that “Panasonic has told their people to be back in Japan by Sept 09.”Harry Schultz’s remarkable take on the situation:“My HSL suspicion is that the elite plan another FDR style “bank holiday” of indefinite length, perhaps very soon, to let the insiders sort-out the bank mess which is getting more out of their control every day.
Insiders want/need to impose new bank rules. Widespread nationalization could result, already under way. It could also lead to a formal US$ devaluation, as FDR did by revaluing gold (& then confiscating it). But devalue against what? The euro? Doubtful. Gold? Maybe. Or vs. the IMF basket of currencies (which seems more likely)—& much in the news recently.Any kind of bank holiday will push the US$ lower, which may be a bonus benefit to their ongoing scenario of letting the $ fall. Such a fall would get the devaluation they want without having to declare it. In sum, the insiders want more bank & system control, fewer banks & a lower US$. A bank holiday would suit all their needs."
2) The details of the plan will spread within an ever-widening circle of banking and government folks who, like Sir Robert, will demand the chance to profit from the insider trade of the century. Because such a secret is impossible to contain for long, once in place the plan has to be executed as soon as possible.3) If the rest of us play it right, we’ll be able to at least protect ourselves, and maybe even make out (in percentage terms at least) like Goldman Sachs no doubt will.
Harry Shultz: “Obviously, U can’t open safeboxes if the banks are closed, so plan accordingly. During the FDR bank holiday, thousands of banks never reopened; it was a face-saving way of shutting them down. I would guess the same would occur today; thousands have little or no net value, loaded with debt, bad mortgages.”
READ ENTIRE ARTICLE HERE
Silicon Valley Unemployment Skyrockets
The NASDAQ is rising led by technology stocks but this chart tells another story. If things are so good in techland why is unemployment at tech companies continuing to rise?-LouMonday, August 3, 2009
The People Are Letting Congress Know How mad They Are
We are heading toward uprisings in this country. Th people do not want socialism in the land of democracy and liberty. This is happening all over the country.-Lou
Big Brother Is Here
Glenn Beck is a little wacky but watch this video, it is very scary if true.-Lou
Big Texas bank on verge of failure
This one could break the bank insurance fund. As you can see from the above chart, the FDIC insurance fund was down to $13 billion at the end of March. With the bank failures announced since then the fund is close to being broke. The failure of Guarantee Bank will most surely deplete the fund. FDIC will have to get an infusion from Congress. More funny money coming off the printing press to guarantee depreciating dollars in bank accounts, and so it goes.-LouGuaranty Bank, which counts Carl Icahn as one if its backers, is teetering on the edge of insolvency. But it may not be easy for regulators to find a buyer.
NEW YORK (Fortune) -- Guaranty Bank is hardly a household name. But the Austin, Texas-based thrift's looming failure is shaping up as a big headache for bank supervisors -- not to mention a black eye for Carl Icahn and others in the smart money set.
Guaranty (GFG) could be soon seized by the government in what would be the biggest bank failure in a year that has already had 64 of them. Last week, the bank warned investors to expect a federal takeover after regulators forced a writedown of its risky mortgage investments and a bid to raise new capital failed.
Guaranty has $13.4 billion in assets and operates 160 branches in Texas and California -- two of the three best banking markets in the nation, thanks to their size and population growth.
But the bank's capital problems and its smallish, scattered network of branches could detract from Guaranty's appeal, making it tough for regulators to find a buyer quickly -- or without substantial federal subsidies.
"This may not be closed as quickly as you think, since it will require bids and rebids," said Miami banking consultant Ken Thomas.
That means resolving Guaranty's failure is likely to be costly to the FDIC's deposit insurance fund, whose balance is at its lowest point in almost two decades.
The Federal Deposit Insurance Corp. isn't the only one taking its lumps. So have some big investors.
Sunday, August 2, 2009
The People Are Getting Really Mad
In my 2009 Financial and Economic Forecast issued on New Years day I stated that there will be large protests over both the economic plight of the average American and the feeling that government is stealing our freedoms. By year end look for massive protests in Washington and across the entire country. The people are finally waking up to what is happening to America and they want their government to stop the destruction of the country. -Lou
Town halls gone wild
Screaming constituents, protesters dragged out by the cops, congressmen fearful for their safety — welcome to the new town-hall-style meeting, the once-staid forum that is rapidly turning into a house of horrors for members of Congress.
On the eve of the August recess, members are reporting meetings that have gone terribly awry, marked by angry, sign-carrying mobs and disruptive behavior. In at least one case, a congressman has stopped holding town hall events because the situation has spiraled so far out of control.
“I had felt they would be pointless,” Rep. Tim Bishop (D-N.Y.) told POLITICO, referring to his recent decision to temporarily suspend the events in his Long Island district. “There is no point in meeting with my constituents and [to] listen to them and have them listen to you if what is basically an unruly mob prevents you from having an intelligent conversation.”
In Bishop’s case, his decision came on the heels of a June 22 event he held in Setauket, N.Y., in which protesters dominated the meeting by shouting criticisms at the congressman for his positions on energy policy, health care and the bailout of the auto industry.
Within an hour of the disruption, police were called in to escort the 59-year-old Democrat — who has held more than 100 town hall meetings since he was elected in 2002 — to his car safely.
“I have no problem with someone disagreeing with positions I hold,” Bishop said, noting that, for the time being, he was using other platforms to communicate with his constituents. “But I also believe no one is served if you can’t talk through differences.”
Bishop isn’t the only one confronted by boiling anger and rising incivility. At a health care town hall event in Syracuse, N.Y., earlier this month, police were called in to restore order, and at least one heckler was taken away by local police. Close to 100 sign-carrying protesters greeted Rep. Allen Boyd (D-Fla.) at a late June community college small-business development forum in Panama City, Fla. Last week, Danville, Va., anti-tax tea party activists claimed they were “refused an opportunity” to ask Rep. Thomas Perriello (D-Va.) a question at a town hall event and instructed by a plainclothes police officer to leave the property after they attempted to hold up protest signs.
MORE
Town halls gone wild
Screaming constituents, protesters dragged out by the cops, congressmen fearful for their safety — welcome to the new town-hall-style meeting, the once-staid forum that is rapidly turning into a house of horrors for members of Congress.
On the eve of the August recess, members are reporting meetings that have gone terribly awry, marked by angry, sign-carrying mobs and disruptive behavior. In at least one case, a congressman has stopped holding town hall events because the situation has spiraled so far out of control.
“I had felt they would be pointless,” Rep. Tim Bishop (D-N.Y.) told POLITICO, referring to his recent decision to temporarily suspend the events in his Long Island district. “There is no point in meeting with my constituents and [to] listen to them and have them listen to you if what is basically an unruly mob prevents you from having an intelligent conversation.”
In Bishop’s case, his decision came on the heels of a June 22 event he held in Setauket, N.Y., in which protesters dominated the meeting by shouting criticisms at the congressman for his positions on energy policy, health care and the bailout of the auto industry.
Within an hour of the disruption, police were called in to escort the 59-year-old Democrat — who has held more than 100 town hall meetings since he was elected in 2002 — to his car safely.
“I have no problem with someone disagreeing with positions I hold,” Bishop said, noting that, for the time being, he was using other platforms to communicate with his constituents. “But I also believe no one is served if you can’t talk through differences.”
Bishop isn’t the only one confronted by boiling anger and rising incivility. At a health care town hall event in Syracuse, N.Y., earlier this month, police were called in to restore order, and at least one heckler was taken away by local police. Close to 100 sign-carrying protesters greeted Rep. Allen Boyd (D-Fla.) at a late June community college small-business development forum in Panama City, Fla. Last week, Danville, Va., anti-tax tea party activists claimed they were “refused an opportunity” to ask Rep. Thomas Perriello (D-Va.) a question at a town hall event and instructed by a plainclothes police officer to leave the property after they attempted to hold up protest signs.
MORE
Chart Of The Day
click on chart to enlargeThis chart of the US dollar index clearly shows how sick the dollar really is. Friday it closed below key technical levels and looks be be heading even lower. Gold popped $20 in reaction Friday and is poised to finally take out the $1,000/oz area (for good). A real currency crisis awaits us this autumn I fear.-Lou
Record Foreclosures
In my article (post below this one) I list the reasons I remain pessimistic about the economy and stock market. Rising foreclosures are a primary concern going foward. This article details the problem-Lou
Report: Foreclosure Inventory Hits Record Level in June
The nation’s housing markets are clearly developing a bi-polar disorder all their own: fresh evidence of a possible recovery is consistently tempered with equally fresh evidence of continuing trouble ahead. A new report released Wednesday morning by Jacksonville-based Lender Processing Services, Inc. presents the latest mixed bag of results, with fresh evidence that housing might be turning the corner.
Put the emphasis on might.
In particular, roll rates — which measure the volume of loans moving from good to bad, and from bad to worse — improved during June, with new delinquencies dropping to their second lowest level in the last year, the firm said. The percentage of delinquent loans moving from bad to worse declined across all product types, as well. Which is at least some good news for a market that has been in dire need of something positive for the better part of two years running.
But for the nascent improvements now being seen, there remain numerous hurdles that suggest the nation’s housing market isn’t really out of the woods just yet. In particular, foreclosures soared to new record highs in June, LPS found: The national foreclosure inventory rate during June was 2.86%, up 2.5% from one month earlier and a huge increase of 86.1% from year ago levels. Total delinquencies rose as well, to 8.58%, up 44% from one year earlier.
Saturday, August 1, 2009
Dow Has Best Month Since 2002
Why I Remain A Pessimist
by Louis Scatigna
The stock market had the best performance since October 2002 with the Dow rising 8.6% for the month. The S&P 500 rose 7.4% and the Nasdaq registered a 7.8% gain for the month. Investors have turned opimistic that the worse of the recession is behind us and the economy and corporate profits will rise later this year.
The optimism may be short-lived in my opinion, let's discuss why I feel the worst is not over why this rally should be looked at with deep suspicion:
* Unemployment is at a level beyond the administrations projections and nationally at almost 10%. Some states are experiencing record high rates: Rhode Island 12.4%, Nevada 12%, South Carolina 12.1% and the worst,Michigan at an astounding 15.2%. To make things worse almost 700,000 workers will run out of unemployment benefits by October and that number will grow with each successive month. Until employment turns around there will be little or no economic growth.
* There are now a record numbers of foreclosures and that number continues to grow. In June alone there were 336,000 foreclosure filings. A large wave of ARM resets will happen in early 2010 only adding to the housing woes. 15 million homeowners are now "underwater", owing more on their homes than they are worth. Housing was the major cause of the economic crisis and until e see a drop in the foreclosure rate, housing will not have bottomed.
* Debt deleveraging is accelarating. Credit card defaults have now surpassed 10%, a record high and this figure is continuing to rise.
* Bankruptcy filings have reached over 675,000 for the first six months of 2009. In June alone there were 116,000 filings, a 40% increase over June 2008.
* It has been estimated that over 2.5 million workers have lost their health care benefits when they lost their jobs.
* The economy declined only 1% based on Friday's 2nd quarter GDP number. But the economy is totally dependent on government support. 2nd quarter GDP shows that government spending increased 10.9%, without that increase the GDP number would be significantly lower.
* The US budget deficit is at gargantuan levels. We used to sweat a few hundred billion dollar deficit an now that has ballooned to trillions. The Treasury borrowing needs will ultimately result in higher interest rates, a poison to a fragile economy and housing market. This week's huge Treasury auction did not go well. The 5 year treasury auction was especially weak, the worst since 1993. If foreigners boycott the auctions either interest rates will have to rise to attract capital or the Federal Reserve will print the money and buy what the world will not most likely both. This "monetization" of the US deficit will have a damaging effect on the US dollar resulting in an inflation problem this country has never experienced.
* This government has shown itself to be one of tax and spend. Huge government bail-out programs (cash for clunkers as an example) and massive healthcare reform will only add to the deficit in the years to come. To mitigate the rising deficit, the current government has made it clear that taxes will have to be raised and in some cases dramatically. If there is one thing history tells us it's that raising taxes in a weak economy will only have an adverse effect. Policies like "Cap & Trade" will raise the cost of energy for the entire country, in essence a tax on us all. Rumblings of enacting a Value Added Tax (VAT) are coming out of Congress. This in effect would be the same as a national sales tax, increasing the cost of virtually everything we buy or use. Government policy is taking the country down the road to bankruptcy.
* The U.S. has an estimated $40 trillion in unfunded liabilities. The baby boomers have just started to enter the Medicare and Social Security entitlement programs. Either the deficit will have to rise to unsustainable levels or benefits will have to be cut drastically damaging the standard of living of our seniors.
* Pensions nationwide have lost hundreds of billions during the economic crisis putting current and future retirees at risk. I fear retired people will be receiving letters notifying them that their pension is being cut due to lack of funding. Already pensioners are being warned that their pension fund is underfunded and cuts may be on the way. If this happens enmass a whole generation of Americans will be impoverished.
* States and municipalities are struggling with massive budget deficits as tax revenue plummets at record rates. California's troubles are just the first, many states are in the same boat. Unlike the federal government, states, cities and towns cannot print money to fund their deficits. We will see massive cuts in services and with that a decline in our standard of living.
* The U.S savings rate has increased from 0% (actually negative in 2007) to about 6.8%. This may sound like a good thing and it is in the long-term, but if Americans are saving they are not spending. Retail sales remain tepid and show no signs of improving any time soon. Consumers are struggling to pay down debt and are in no mood to pull out the plastic to buy things they really don't need. The consumer is 70% of the economy and any turnaround must be led by an increase in consumer spending.
* The banking system is still very fragile. Although some of the big banks have shown nice profits recently, it is based on using bailout funds and trading in the financial markets. Accounting gimmicks are making bank earnings look much better than they actually are. The next shoe to drop on the banks is the coming defaults on hundreds of billions in commercial real estate loans. Vacancies in both retail and office space continue to climb. Every Friday the FDIC announces a number of bank seizures. The FDIC insurance funds is quickly running out and Congress will have to tap taxpayer money to replenish it.
So as you can see there are many things to be concerned about going forward. The stock market has had a great run and perhaps is forecasting better times ahead but with all the above negative economic issues I think not.
Some historic facts to consider:
* The 1929-1930 stock market rally coming out of the crash of 1929 lasted 147 days and was up 46%
* Since the low in March, it has been 146 days and the advance is the same 46%.
* After the 1930 rally of 46% the U.S. stock market experienced a 700-day drop of 85%.
Be careful of rampant optimism, history tends to repeat itself.
Bank Failure Friday Claims 5 More Banks
As usual the FDIC announced a bunch of bank siezures on Friday night. This week features 5 more bring the year total to 69. The total cost to the FDIC insurance fund is almost $1 billion. The FDIC must be getty close to running out of money which they are sure to do in the months ahead. Make sure you stay within FDIC insurance limits in your bank-here is the link to the FDIC website-Lou
Five U.S. bank closures bring 2009 total to 69
SAN FRANCISCO (MarketWatch) - Five U.S. banks in Oklahoma, Florida, Ohio, New Jersey and Illinois were closed by regulators Friday, bringing the tally this year to 69 and making a $911.7 million dent in the federal deposit insurance fund as the credit crisis takes a persistent toll on the nation's financial institutions.
The Federal Deposit Insurance Corp. said in a statement that Altus, Okla.-based First State Bank of Altus was closed, and that Amarillo, Tex.-based Herring Bank will assume the failed bank's deposits.
First State Bank of Altus had $103.4 million in assets and $98.2 million in deposits as of June 19, the FDIC said. The bank is the first to fail on Oklahoma this year, and will cost the deposit insurance fund $25.2 million.
The FDIC also said Jupiter, Fla.-based Integrity Bank was shuttered, marking the fourth bank failure in that state this year. Fort Lauderdale, Fla.-based Stonegate Bank has agreed to assume the failed bank's deposits.
Integrity Bank had $119 million in assets and $102 million in deposits as of June 5, the FDIC said, and its failure will cost the deposit insurance fund $46 million.
West Chester, Ohio-based Peoples Community Bank was also closed by regulators, and its deposits have been assumed by Hamilton, Ohio-based First Financial Bank, National Association, the FDIC said.
Peoples Community Bank is the first to be closed in Ohio this year. It had $705.8 million in assets and $598.2 million in deposits as of March 31, and its failure will cost the deposit insurance fund $129.5 million.
Elizabeth, N.J.-based First Bankamericano was also closed. Brick, N.J.-based Crown Bank will assume the failed bank's deposits, the FDIC said.
First Bankamericano, the second New Jersey bank to fail this year, had $166 million in assets and $157 million in deposits as of July 16, the FDIC said, and its failure will cost the deposit insurance fund $15 million.
Rounding out the list of failed institutions on Friday was Harvey, Ill.-based Mutual Bank. Garland, Tex.-based United Central Bank has agreed to assume the failed bank's deposits, the FDIC said.
Mutual Bank, the 13th bank to fail in Illinois this year, had $1.6 billion in assets and $1.6 billion in deposits as of July 16. Its failure will cost the deposit insurance fund $696 million, the FDIC said.
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