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FDIC Is In The Red, 552 ‘Problem’ Banks

More wonderful economic news from the Associated Press:

Banks earn $2.8B in 3Q; insurance fund in the red


November 24, 2009

WASHINGTON — The apparent end of the recession and stabilizing financial markets have not cured the banking industry, the Federal Deposit Insurance Corp. said Tuesday.

Banks earned $2.8 billion in the third quarter, but loan balances plummeted and the fund that insures their deposits was $8.2 billion in the red. Souring loans continued to hurt bank balance sheets, but they were buoyed by higher operating revenues and a revived market for securities, the FDIC said.

The number of banks on the FDIC’s "problem list" rose to 552 from 416 on June 30, the highest level in 16 years. Fifty banks failed during the quarter — the largest number since the second quarter of 1990.

The FDIC’s fund that insures bank deposits fell by $18.6 billion, mostly because $21.7 billion was set aside for expected losses on future bank failures. The FDIC voted this month to require banks to prepay three years of deposit insurance premiums at the end of the year to help replenish the dwindling fund, which is at its lowest point on record. The last similar deficit was in Dec. 1991, when a predecessor fund was more than $7 billion in the red.

Bank failures this year through 2013 are expected to cost the fund $100 billion — mostly in 2009 and 2010. But depositors’ money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government.

Bank profits returned in the third quarter after a $4.3 billion loss in the previous quarter and $879 million in earnings last year.

"While bank and thrift earnings have improved, the effects of the recession continue to be reflected in their financial performance," FDIC Chairman Sheila Bair said.

A 2.8 percent drop-off in loans outstanding — the largest percentage decline on record — showed that credit for consumers and businesses remained tight, she said

The government is now controlling the banking system in our country like never before.

Look at what a great job it is doing.

This article was posted by Steve on Tuesday, November 24th, 2009. Comments are currently closed.

5 Responses to “FDIC Is In The Red, 552 ‘Problem’ Banks”

  1. proreason says:

    The recession is over. The Wizard of Obamy has done it.

    Don’t worry about 30 million unemployed Americans. Don’t worry about the thousands of bank failures. Don’t worry about quadrupling the deficit. Don’t worry about skyrocketing government debt. Don’t worry about the skyrocketing bankruptcies. Don’t worry about the loss of trillion of dollars of wealth. Don’t worry about the coming skyrocketing tax rates. Don’t worry about the coming skyrocketing inflation. Don’t worry about the threats by China. Don’t worry about the transparent lieing about the economy by the government. Don’t worry why the price of gold continues to climb. Don’t worry about the Crap and Tax job killing bill. Don’t worry about the job killing Health Scare bill. Don’t worry about the shocking decrease in value of your home. Don’t worry about the 10%+ “in trouble or default” rate on home mortgages. Don’t worry about gas prices creeping up. Don’t worry about the shuttered shops you see in all of the shopping malls. Don’t worry that government workers continue to receive cost-of-living ratises. Don’t worry about the explosion of jobs under the “czars”. Don’t worry that 8 to 14 states are on the verge of bankruptcy. Don’t worry what will happen to the country when interest rates go up and our debt service skyrockets. Don’t worry about the fascists takeover of the auto industry. Don’t worry about the fascist takeover of the banking industry. Don’t worry about the fascist takeover of the mortgage industry. Don’t worry about the fascist takeover of the Student Loan industry. Don’t worry about the impending fascist takeover of the health care and medical industries. Don’t worry about the burgeoning amount of government regulations. Don’t worry that the government has now established it’s right to control your salary. Don’t worry that increasing the minimum wage has thrown 25% of young people out of work. Don’t worry that Barney Franks and Chris Dodd are on the verge of revolutionizing the financial industry. Don’t worry that your credit card interest rates have skyrocket. Don’t worry that your credit card company is about to drop you. Don’t worry that the recession hasn’t stopped the skyrocketing of educational costs. Don’t worry that the White House is spending 5 times what any other White House ever did. Don’t worry that the inner cities are fille with people who expect “Obama money”. Don’t worry that the “big idea” of this administration was the failed “Cash for Clunkers” program. Don’t worry that the administrations several programs to help with mortgages are an abysmal failure. Don’t worry that Andy Stern is the most frequent visitor to the White House and that his philosoply is straight from “Das Capital”. Don’t worry that the Green Jobs czar’s favorite rant was “Give them the wealth. Give them the wealth”. Don’t worry that the president’s big gripe with the Constitution is that it doesn’t give him the special power to redistribute wealth.

    The recession is over.

    The New York Times has declared it to be so.

  2. Georgfelis says:

    I’m trying to think of what I would tell my insurance company if they “requested” me to prepay the next three years of insurance payments. Not sure it would be printable.

    But the Government can do that for banks. I wonder how many banks that are just barely scraping along, will get knocked into the FDIC’s loving arms due to the FDIC’s attempt to “protect” them.

  3. crosspatch says:

    And as far as I know the government has not used TARP to purchase a single “toxic” asset from these banks. Instead they have simply poured the money into the bank reserves and continue with the idiotic lending practices that got us into this mess to begin with.

    • Right of the People says:

      And they won’t give loans to small businesses. The criteria they are pushing is they’ll only loan money to a “solvent” small business without any debts. If the small business didn’t have any debts, why in the f**k would they need a loan in the first place?

    • proreason says:

      “And they won’t give loans to small businesses. ”

      It’s part of the plan to destroy small businesses.

      Big businesses are easy to control. We have seen that in spades this year.

      But by sheer force of numbers, small businesses are uncontrollable. And they also provide a social network which is very difficult for the fascists to implement thought-control.

      So they have to be destroyed.

      The destruction is undoubtedly much further along than anybody knows. The media won’t report on it because if they did, it would be exposed.

      I don’t know a single small business owner whose business hasn’t been radically undermined. Many have simply gone out of business.

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