Is this the truth or a warning of what may be coming or speculation?
http://www.bigpicture.typepad.com/
Nevada State Bank Acquires the Insured Deposits of Silver State Bank, Henderson, Nevada
Silver State Bank, Henderson, Nevada, was closed today by the Nevada Financial Institutions Division, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. To protect the depositors, the FDIC entered into a Purchase and Assumption Agreement with Nevada State Bank, Las Vegas, Nevada, to assume the Insured Deposits of Silver State Bank.
The branches of Silver State Bank will open on Monday as Nevada State Bank in Nevada and National Bank of Arizona in Arizona. Depositors of the failed bank will automatically become depositors of Nevada State Bank or National Bank of Arizona. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.
Over the weekend, customers of Silver State Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of June 30, 2008, Silver State Bank had total assets of $2.0 billion and total deposits of $1.7 billion. Nevada State Bank agreed to purchase the insured deposits for a premium of 1.3 percent. At the time of closing, there were approximately $20 million in uninsured deposits held in approximately 500 accounts that potentially exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.
Silver State Bank also had approximately $700 million in brokered deposits that are not part of today's transaction. The FDIC will pay the brokers directly for the amount of their insured funds.
Customers with accounts in excess of $100,000 should contact the FDIC toll-free at 1-800-523-8177 to set up an appointment to discuss their deposits. This phone number will be operational this evening until 9:00 p.m. PDT; on Saturday and Sunday from 9:00 a.m. to 6:00 p.m. PDT; and on Monday and thereafter from 8:00 a.m. to 8:00 p.m. PDT.
Customers who would like more information on today's transaction should visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/silverstate.html. Beginning Monday, depositors of Silver State Bank with more than $100,000 at the bank may visit the FDIC's Web page, "Is My Account Fully Insured?" at http://www2.fdic.gov/dip/Index.asp to determine their insurance coverage
In addition to assuming the failed bank's insured deposits, Nevada State Bank will purchase a small amount of assets comprised of cash and securities. The FDIC will retain the remaining assets for later disposition.
The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund is between $450 and $550 million. Silver State Bank is the second bank to fail in Nevada in 2008. First National Bank of Nevada, Reno failed on July 25, 2008. This year, a total of eleven FDIC-insured institutions have been closed.
Is the pending mass failure of US banks anything similar to the US Savings and Loan crisis in the 80s when 750 banks failed, but ultimately up to 94' more than 1,600 banks insured by the FDIC were closed or received FDIC financial assistance.And joining the FDIC's failed bank list this week was Silver State Bank of Henderson Nevada.
Is the pending mass failure of US banks anything similar to the US Savings and Loan crisis in the 80s when 750 banks failed, but ultimately up to 94' more than 1,600 banks insured by the FDIC were closed or received FDIC financial assistance.
Can we compare the current situation? Or, are the foundations for the crisis different and the current CC is going to have further reaching consequences?
(Interesting note that the DJI trippled during the S&L crisis, which included the 87 crash)
Looks like the two GSE's are finally getting a bailout. The interesting thing will be how they structure it.
http://seekingalpha.com/article/94189-rescuing-frannie
Cheers,
CanOz
Introduction to Financial Armageddon: Protecting Your Future From Four Impending Catastrophes:
Few paid attention to warnings from Eric Breval, the head of the $15.5 billion Swiss state pension fund, in a November 2005 Bloomberg report. He discussed plans to shift assets away from the United States and referred to the financial “time bomb” that the nation’s largest mortgage lenders, Fannie Mae and Freddie Mac, were sitting on. The same held true in April 2006, when Citigroup vice chairman William Rhodes told the Wall Street Journal, “We are in a situation similar to that which existed in the spring of 1997, when threats existed to market stability and a lot of people didn’t want to see it.”
I don't see how common shareholders could survive but you never know. The US is now officially bail-out nation. What will be the final cost to taxpayers after all is said and done? This will dwarf the S&L crisis. Anyway it should remove some uncertainty from the market and provide the basis for another dead cat boune.
However, the rumors have not yet converged on the shape of the plan, The New York Times says that not only wouldthe existing chiefs and likely the board will be given the heave-ho, but that the preferred shareholders would suffer as well as the common equity holders (note the details of the recapitaliztion were not reported). That was surprising and may not be correct. Most observers had assumed that preferred shareholders would be spared, since many banks hold significant slugs of Freddie and Fannie preferred, and a big writedown would be a direct hit to the bottom line.
Everyone seems to forget that the world recovered from its depression last time around. I mean it took fascism eating itself to do so but we did it. We will all be better investors due to this credit maelstrom or at the very least regulation will be in place to avoid the excesses. After all the Fannie and Freddie model, spawned from the last depression, has worked well for 80 odd years which is a pretty good policy if you ask me. Now it needs to be re-jigged for the next generaion. Big deal.
You should all be celebrating the demise of Bear Stearns and hopefully Lehmann Bros and a few pissant regional banks too as this will mean your kids will have a better future. Take some pain, redefine the model and move on. Humans are self interested after all. There will be another up in the asset cycle.
I am a lot more optimistic today compared to 12 months ago; and it means we no longer have to hear about the 'War on Terror'!! Remember that abstract media construct?
Mmmmm..... dismissed from proceedings as not a creditable witness or expert?August 1, 2007 BEIJING (Reuters) - Treasury Secretary Henry Paulson said on Wednesday the repricing of credit risk was hitting financial markets, but U.S. subprime mortgage fallout remained largely contained
This is not part of a 'normal' cycle, so you can't compare with recent history to guide on how it's all going to resolve. The greatest credit expansion in history is now morphing into the greatest credit contraction in history with 25 years of irrational fiat money system & fractional reserve banking exuberance."Even though the conservativeship was built into the original legislation, it was a doomsday scenario. I guess in terms of the market, we are there" - Guy Cecala, an industry veteran and publisher of Inside Mortgage Finance
The director shouts in frustration on the set of "The End of the Credit Crisis - part 2" - "Benny & Paul, please try to make it look as if you mean it, or at least pretend to give the impression that you know what the heck you are doing". Coming to a bank near you perhaps??
The latest information from the reserve bank is reassuring. The Reserve Bank governor, Glen Stevens says there is no evidence to suggest there could be a recession in Australia, although it coundn't be ruled out completely.
Quote; "We're in a slow growth-like period .... I don't think it would be honest to deny there are some probabilities of that but the most likely outcome is the one we put out over the last six months"
Not real bullish but not at all bearish either.
You would think that our great and esteeemed leading financiers would give some guide to the future. Oh well, you can never be wrong if you dont' say anything, keep the pants shiny on the seat eh.
The latest information from the reserve bank is reassuring. The Reserve Bank governor, Glen Stevens says there is no evidence to suggest there could be a recession in Australia, although it coundn't be ruled out completely.
Quote; "We're in a slow growth-like period .... I don't think it would be honest to deny there are some probabilities of that but the most likely outcome is the one we put out over the last six months"
Not real bullish but not at all bearish either.
WaMu replaces CEO, signs agreement with regulator
Washington Mutual Inc. replaced its chief executive on Monday as the nation's largest thrift tries to find a new leader to guide it through the housing crisis.
The lender also said it signed an agreement with its main regulator, the Office of Thrift Supervision, which requires it to provide an updated business plan and forecasts for results, asset quality, capital and the performance of business segments.
The memorandum of understanding WaMu signed with the OTS may be the first intrusion into its affairs by regulators. If the company's condition worsens, the OTS can restrict WaMu's business operations, as it did with another thrift, Downey Financial (DSL) on Friday, the analysts said.
Phew! now we can all get some sleep. What with the bailout of F&F the market rallies....back to where it was....... last Thursday....and on yawningly low volume! The PPT, take a bow! But alas, it twas just a fleeting glimpse of an bygone era of misguided optimism.
WaMu, Lehman & CDO's - the next chapter?
The real bear market starts - now!
Roubini's 12 steps are getting enacted by the looks of it, and Kondratief has the last laugh from the grave.
Prediction - the Dow & gold will both be 4 figures by 2009?
Phew! now we can all get some sleep.
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