Busy weekend for the boys:


Charts courtesy of The Chart Store

Category: Credit

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “FDIC Bank Closings”

  1. riffraff says:

    Are these banks failing one by one (or two by two)? Or, is the FDIC simply trying to spread the closings out, so as to soften the impact (as well as place the remaining assets)?

  2. alfred e says:

    Great chart.

    Ooops. Who said things were just fine and normal now?

    Was that you cognos? I suppose you have a rationalization. As in it wasn’t a TBTF. Yet.

    The truth is still being covered up. Animus. Got to drive that market and consumer confidence.

    Suck ‘em in, squeeze ‘em out. Pump.

  3. Bob the unemployed says:

    I’d like to see a chart similar to the second one, but factoring in the size of the banks. I suspect (but do not know) the banks that are failing now are smaller than the ones that failed in late 2008 and early 2009.

  4. b_thunder says:

    2009 line was green,a s in “green shoots”
    2010 line is red. how appropriate…

  5. Q: is the FDIC simply trying to spread the closings out, so as to soften the impact (as well as place the remaining assets)?

    A: Yes.

    also, makes them easier to ignore, see http://news.google.com/news/search?aq=f&pz=1&cf=all&ned=us&hl=en&q=bank+closings how few MSM outlets even follow/print the ‘story’..

    wouldn’t want to startle the herd..

  6. VennData says:

    tea party corporate fucks, get ready to deal with us… if you get your fat asses back in the seat. get ready.

    http://www.youtube.com/watch?v=tqWP1rsAMrw

  7. constantnormal says:

    I have a preference in seeing multiple year data as a single line, rather than folded over the individual years.

    So I took the raw data from the first chart, popped it into a spreadsheet as a Google Doc, and generated the desired chart:
    http://docs.google.com/drawings/edit?id=1VMb47fTTTAGuCfVSyqS_PkZAlQr3VXXm9pxvHN18fF4&hl=en

    Looking at the number of failed mortgages still in the pipeline, and assuming that we do not see a rise in employment sufficient to foreshorten that queue, we should see bank failures peaking somewhat possibly north of 1000 (maybe higher than 2000, but that seems a stretch) sometime over the next 2-4 years.

    Calculated RISK has a nice historical bank failure chart:
    http://bp3.blogger.com/_pMscxxELHEg/SHq1_K1TePI/AAAAAAAACQE/5CgYXzo1CPw/s1600-h/FDICFailures.jpg that ends about the time that this new surge ion bank failures takes off, and extends back into the 1930s.

    … and this being a considerably larger event than the S&L crisis, the above guesstimates are in the ballpark.

    However, charts based on bank failures are using an imperfect metric, due to the growth in the size of banks over the years. A better chart would be a chart of failed banks in terms of total assets, with the dollar amounts either adjusted to constant-dollar terms, or better yet, portrayed as a percentage of the GDP.

  8. mbelardes says:

    Yo BR,

    Can your wife start a blog? I drive my girlfriend crazy talking about this stuff all the time. It’s late sunday evening and you posted this and here I am reading it.

    I think it’s time for The Really Big Picture where you explain to us macro junkies how to not drive our women crazy and your wife can tell our women how to cope with us.

    Just a thought.

  9. constantnormal says:

    I’m guessing that the increase in slope from year to year is indicative of the FDIC’s staffing up to meet the demand.

    One of the few genuine growth industries in the nation.

  10. cognos says:

    Uh… 6 of the 8 banks closed were small ($100M.

    If one did a chart of “rolling 4-week est FDIC costs”… it would be down 80% from the peak and moving steadily down in 2010.

  11. cognos says:

    Uh… 6 of the 8 banks closed were small (less than $100M in est costs to FDIC).

    The combined est costs of ALL banks closed in 2010 is about equal to the single costliest bank failure of 2009 ($4.9B).

    If one did a chart of “rolling 4-week est FDIC costs”… it would be down 80% from the peak and moving steadily down in 2010.

    Its over. Look at the C earnings, just came in at $0.15 (expected $0.01/shr). CEO says, “credit losses declined”, “looks like credit cycle has turned”. )

    Why would that happen for Q1… but then reverse? Makes no sense. Recovery is self-reinforcing.

  12. Why would that happen for Q1… but then reverse?

    cognos,

    wither QE? or, ZIRP?
    ~~

    also, you keep trying to point to the ‘small #’s’, the FDIC’s Fund is sucking wind, now, no?

    “By: Zacks Equity Research
    November 25, 2009 | Comments: 0
    Recommended this article (2)
    JPM | FITB | USB | ZION | STI | PNC | BBT | RF Print Share
    In its quarterly report on the banks, issued on Tuesday, the Federal Deposit Insurance Corporation (FDIC) said that the deposit insurance fund used to protect customer accounts dropped by $18.6 billion during the third quarter of 2009 to a deficit of $8.2 billion, while banks earned only $2.8 billion as loan defaults continued to hurt bank balance sheets. The agency said that the decline in the insurance fund was due primarily to an additional $21.7 billion set aside by the FDIC during the quarter for additional bank failures.

    While the state of the economy is showing signs of recovery, there are lingering concerns related to the banking industry. As the industry has to tolerate bad loans that were made during the credit explosion, the trouble in the banking system goes even deeper, increasing the possibility of more bank failures.

    In the third quarter of 2009, the number of banks on the FDIC’s list of problem institutions grew to 552 from 416 in the second quarter. This is the highest since 1993…”
    http://www.zacks.com/stock/news/27657/FDIC+Fund+in+the+Negative+-+Analyst+Blog

  13. cognos says:

    From the small earnings release sample so far (about 30 major companies)… this looks like one of the best (if not the best) earnings seasons ever. It looks like very high expectations (50-70% EPS growth) are getting beat by 10% on average (65-87% EPS growth?).

    This week contains around 100 of the SPX. The sample will be very close to average. The Q is booked, next Q looks like it will continue to build on the “V-shaped recovery”. NFP payrolls will continue to build. GDP estimates are being increased all around.

    Turns out… Fed policy works. Just give it time.

  14. pravin404 says:

    To :Bob the unemployed

    Check these charts (check one at bottom of the page) which details numbers of banks failed according to their size.
    http://portalseven.com/banks/Failed_Banks_List_2010.jsp

    Also on the next link , you can see the total assets of banks failed each month since 2008.
    Also state-wise numbers of bank assets and FDIC cost:
    http://portalseven.com/banks/Failed_Banks_FDIC_Cost.jsp

  15. cognos says:

    MEH -

    Very wierd. How does a quote from Nov 29, 2009 support your case?

    It actually supports mine. Costs of failure to FDIC in Q1 were <50% the costs in Q4 09. They will be even lower in Q2.

    The bit you quoted also said "bank earnings for q4"… and quoted a total number that is roughly 1/2 the EPS Citibank just posted today.

    I have consistently said, Q3/Q4 last year was the peak of credit losses. Its all turning. Markets look forward. Thanks for the support.

  16. cognos says:

    BARRY – Please post the “FDIC Cost” chart, suggested by pravin404. It paints a very different (better?) picture:

    http://portalseven.com/banks/Failed_Banks_FDIC_Cost.jsp