It's Friday - Has your bank failed today?

E

EvaLSeraphim_IHB

New member
<a href="http://www.fdic.gov/bank/individual/failed/heritage.html">Because First Heritage in Newport Beach did.</a>



I had known one was coming, but thought it would be Riverside or SB. I also thought it would be last Friday.
 
Ok, well it turns out that their REO for sale homes <a href="http://content.fnblist.com/pdfs/REOWebDoc.pdf">says it all.</a>



It gets better. <a href="http://www.fnbaonline.com/pdfs/AZ/FNBHAnnualReport.pdf">The senior management of this bank consists of two families</a>, the Lambs and the Dorris'. How in the heck did the OCC approve this.



Jeebus. This really is the privatization of profits and the socialization of losses.
 
[quote author="EvaLSeraphim" date=1217066609]<a href="http://www.fdic.gov/bank/individual/failed/heritage.html">Because First Heritage in Newport Beach did.</a>



I had known one was coming, but thought it would be Riverside or SB. I also thought it would be last Friday.</blockquote>
I'm not surprised at all, it was just a matter of time. This is the CA subsidiary of 1st National Bank of Arizona and I used to work at 1st National Bank of Nevada which was their other subsidiary (privately held). The parent bank has essentially stopped lending because they are undercapitalized and need hundreds of millions in equity.



From the 6 months that I spent at 1st NBON I could tell it was a matter of time before all 3 banks went under. I mean, they provided so much land and residential lending loans that should have been made by hard money lenders and not a bank
 
The answer to your question is "not yet," but WaMu stock fell 4.7% to close at $3.84 today. It was at 5-something at the beginning of the week, I think.



On Bloomberg.com there was an <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=atCxvYLuFTQE&refer=home">article</a> that quotes an analyst who says about WaMu, "We won't use the phrase `run' on the bank, but we would be remiss if we did not observe that many creditors have quietly been pulling funds from the bank."



I just looked at the online CD rates for WaMu and they have raised the 12-month APY from 4% to 4.25% in the last few days. Looking for more deposits, perhaps?



I think it's just a matter of time before the FDIC steps in.
 
[quote author="Anon." date=1217070963]The answer to your question is "not yet," but WaMu stock fell 4.7% to close at $3.84 today. It was at 5-something at the beginning of the week, I think.



On Bloomberg.com there was an <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=atCxvYLuFTQE&refer=home">article</a> that quotes an analyst who says about WaMu, "We won't use the phrase `run' on the bank, but we would be remiss if we did not observe that many creditors have quietly been pulling funds from the bank."



I just looked at the online CD rates for WaMu and they have raised the 12-month APY from 4% to 4.25% in the last few days. Looking for more deposits, perhaps?



I think it's just a matter of time before the FDIC steps in.</blockquote>
I agree, WAMU is on the clock...we should set up a pool on which month the Feds step in and talk over.
 
[quote author="usctrojanman29" date=1217071559]we should set up a pool on which month the Feds step in and talk over.</blockquote>


<em>Month?</em> Well, since there are 4 business days left in July...I pick July.
 
Nah, August or Sept., because it would take that long to hire

enuf regulators to have at least one person to close the doors

at each branch. Over at Calculated Risk, some one said they had

on the order of 3500-4000 branches. Does FDIC have that many

total employees?
 
[quote author="Daedalus" date=1217087710][quote author="usctrojanman29" date=1217071559]we should set up a pool on which month the Feds step in and talk over.</blockquote>


<em>Month?</em> Well, since there are 4 business days left in July...I pick July.</blockquote>
But remember, they do this on Fridays and the next Friday is August 1st.
 
[quote author="lawyerliz" date=1217099107]Nah, August or Sept., because it would take that long to hire

enuf regulators to have at least one person to close the doors

at each branch. Over at Calculated Risk, some one said they had

on the order of 3500-4000 branches. Does FDIC have that many

total employees?</blockquote>
They could always hire temp employees. I didn't realize that WAMU had that many branches.
 
WaMu has 45,000 employees.



How could a temp have the chutzpah to walk into a bank and say, ok

I am closing you now? We are not talking about answering the phone

and taking messages here.
 
The bigger concern with WaMu`s potential failing is not does the FDIC have enough people?

Does it have enough cash reserves ? WaMu is the largest Savings and Loan in the country.

The potential exposure to the FDIC could make it impossible for them to do

anything after WaMu without going to the Fed for more cash.

They have reserves of 52 Billion covering Several Trillion in deposits in the Nations

Total Banking system.

If all of this happens the unwinding will be significant.

God help us if this perfect storm happens.........
 
Of course I agree Bitserv.



The way I see it there are 2 choices:



1. The FDIC fails. Results too terrible to comtemplate.



2. The FDIC is stuffed with money. Inflation on a scale not seen

since the 70s and 80s ensues. A kinder, gentler default. This is

dreadful, but not as dreadful as 1.



Is anybody willing to accept the consequences of 1? Anybody

think 1 is better than 2 and willing to be precise in why?
 
[quote author="bltserv" date=1217134555]The bigger concern with WaMu`s potential failing is not does the FDIC have enough people?

Does it have enough cash reserves ? WaMu is the largest Savings and Loan in the country.

The potential exposure to the FDIC could make it impossible for them to do

anything after WaMu without going to the Fed for more cash.

They have reserves of 52 Billion covering Several Trillion in deposits in the Nations

Total Banking system.

If all of this happens the unwinding will be significant.

God help us if this perfect storm happens.........</blockquote>


The FDIC will run out of cash.


And it is not going to be that big a deal to most.


You said it. They will go to the Federal Reserve for more cash. The FDIC is a branch of the Federal Reserve.


Will this cause an increase in the money supply or monetary inflation. Yeah, but so what? The Fed has been doing that since 1913.
 
[quote author="awgee" date=1217135677]

Will this cause an increase in the money supply or monetary inflation. Yeah, but so what? The Fed has been doing that since 1913.</blockquote>


Yep. This is business as usual for the Federal Reserve.
 
My WaMu CD, held in a deferred comp acct., doesn't mature until 9/30.....so I'm stuck in it. Hoping for the best.



Hey, I opened this thing on 8/24/07...when I called for maturity date, they said it was 9/30/08, which is over a month longer than the 12 month period I signed up for. Is this unusual...for it to be a "13 month" CD instead of the 12 you sign up for? The customer service person I spoke to was new and could only explain that it's b/c 9/30 is the end of a quarter .... or something like that.



I'm only curious b/c I'd like this $$ out sooner than later.



Also, LL said "Over at Calculated Risk, some one said they had

on the order of 3500-4000 branches. Does FDIC have that many

total employees?"



Couldn't they tap IRS or FBI white collar types to assist ? I'm sure a one week training class would do the trick.
 
[quote author="Trooper" date=1217140933]My WaMu CD, held in a deferred comp acct., doesn't mature until 9/30.....so I'm stuck in it. Hoping for the best.



Hey, I opened this thing on 8/24/07...when I called for maturity date, they said it was 9/30/08, which is over a month longer than the 12 month period I signed up for. Is this unusual...for it to be a "13 month" CD instead of the 12 you sign up for? The customer service person I spoke to was new and could only explain that it's b/c 9/30 is the end of a quarter .... or something like that.



I'm only curious b/c I'd like this $$ out sooner than later.



Also, LL said "Over at Calculated Risk, some one said they had

on the order of 3500-4000 branches. Does FDIC have that many

total employees?"



Couldn't they tap IRS or FBI white collar types to assist ? I'm sure a one week training class would do the trick.</blockquote>
Troop, I've used a lot of different banks for CDs, and I've never heard of a 12-month CD maturing in 13 months. It's always been exactly a year - exactly to the day. Can you find your original receipt? The maturity date should be on this form. If you can't find your receipt, ask the bank to find their receipt.
 
[quote author="freedomCM" date=1217145726]should we start up a pool as to who goes down first: Downey or WaMu?</blockquote>
Downey will go first, I'll bet $100 on it. I also think that Yineyard Bank will be right after Downey and then it will be WAMU's turn.
 
[quote author="usctrojanman29" date=1217068110]I'm not surprised at all, it was just a matter of time. This is the CA subsidiary of 1st National Bank of Arizona and I used to work at 1st National Bank of Nevada which was their other subsidiary (privately held). The parent bank has essentially stopped lending because they are undercapitalized and need hundreds of millions in equity.</blockquote>


The Nevada subsidiary also failed this weekend. So that's two banks for this weekend.



Maybe we could keep a scoreboard of failed banks throughout the year? These two are number 6 and 7 this year.



A scoreboard of the remaining FDIC reserve would be interesting as well. Indy Mac supposedly grabbed about 10% of the reserve. These two are much smaller, with 3.5B in assets vs. IndyMac's 30. So maybe another 1-2% of the reserve? A few of these every week, and pretty soon you're talking real money.
 
I do not know which will go next, but it should be Downey. I do not understand how they are keeping their doors open.
 
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