Courtesy of Ron Griess of the Chart Store, we have our two regular FDIC charts — plus two new ones that look at failures in dollar terms, both nominally and inflation adjusted:





Category: Bailouts, Credit, Regulation

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.

14 Responses to “FDIC Bank Failures ($ Inflation Adjusted)”

  1. michaelismoe says:

    The best part about WaMu going under was I never had to watch those annoying commercials again.

  2. Greg0658 says:

    I like the new scope .. and to turn it partisan .. wonder how “Time Time Time what has become of me” would be different .. IF
    The Bangles – “Hazy Shade Of Winter”


    Statistical and applied probabilistic knowledge is the core of knowledge; statistics is what tells you if something is true, false, or merely anecdotal; it is the “logic of science”; it is the instrument of risk-taking; it is the applied tools of epistemology; you can’t be a modern intellectual and not think probabilistically—but… let’s not be suckers. The problem is much more complicated than it seems to the casual, mechanistic user who picked it up in graduate school. Statistics can fool you. In fact it is fooling your government right now. It can even bankrupt the system (let’s face it: use of probabilistic methods for the estimation of risks did just blow up the banking system).

    The current subprime crisis has been doing wonders for the reception of any ideas about probability-driven claims in science, particularly in social science, economics, and “econometrics” (quantitative economics). Clearly, with current International Monetary Fund estimates of the costs of the 2007-2008 subprime crisis, the banking system seems to have lost more on risk taking (from the failures of quantitative risk management) than every penny banks ever earned taking risks. But it was easy to see from the past that the pilot did not have the qualifications to fly the plane and was using the wrong navigation tools: The same happened in 1983 with money center banks losing cumulatively every penny ever made, and in 1991-1992 when the Savings and Loans industry became history.

    It appears that financial institutions earn money on transactions (say fees on your mother-in-law’s checking account) and lose everything taking risks they don’t understand. I want this to stop, and stop now— the current patching by the banking establishment worldwide is akin to using the same doctor to cure the patient when the doctor has a track record of systematically killing them. And this is not limited to banking—I generalize to an entire class of random variables that do not have the structure we thing they have, in which we can be suckers…”
    “…Since 1913, when the Federal Reserve was created by Congress, your money has lost 96% of its purchasing power due to inflation. A common misconception today is that prices for goods and services have been going up. The truth of the matter is that prices have remained nearly the same in precious metals terms; it is the value of the dollar that has declined. It simply takes more and more dollars to buy the same products, since the dollar’s value has become less and less. Gold and silver were scrapped as a “control” mechanism for our economy, and ever since, we have been circulating a “robust paper” in place of real money. This “robust paper” is now the world’s reserve currency in central banks. From 2002 – 2005, the U.S. dollar lost over 40% of its value to the Euro, and had similar losses to other major currencies of the world. Since the dollar is the major reserve currency of the world’s central banks, that means those central banks also lost near 50% of their value. When they wake up and realize that only precious metals hold true value, we are in for a correction unlike anything ever seen…”
    You may be inclined to think that the green bills in your wallet are dollars, but I have shocking news for you: They’re not. They’re counterfeits. Since 1913, a gradual shift has turned our money from wealth to debt, and finally into a speculative investment.

    Following, I shall offer proof of my statement with argument, evidence and deductive logic. See if you agree with me. ..”
    and, Yes, as [per usual, I’ll Underwrite the, above, Premises, set forth..

  4. and, needless to say, these Charts, totally, Ignore those ‘Banks’ deemed TBTF, yet, are, nonetheless, Totally Insolvent–if not for Our “Head down, Ass up”-Ostrich position..

    as an aside, When can We get “BOHICA” emblazoned on the same ‘Notes’ that We can find ol’ TTT’s “Signature” ?

  5. Marcus Aurelius says:

    Thanks, MEH. Good stuff.

  6. cognos says:

    MEH —

    If “toxic assets” make the current banks TBTF, how come HY credit is up 50-100% over the last year? How come subprime mortgage prices are up 100% YTD basically across the board?

    AAA 06-01 tranche subprime prices in the TRADED market are UP about 100% since the bottom and were about 90 on May 1st. They are 86 today.

    The most dumbly assumed “toxic” assets were exactly the most mis-priced best buys since Mar 09. For example, GGP convertible debt was priced at 3/100 at the bottom. Today it is over 100 for a 3300% return in just over 1 year.

    But yeah… those banks must all be bankrupt because I am sure MEH has the right “marks” and they are hiding in the sand. That kind of idiotic is typically reserved for govt regulators.

  7. cognos says:

    Note – outside Puerto Rico there have been very very FEW major bank failures in 2010. 50% of the total “costs to FDIC” registered in 2010 were a few major Puerto Rican banks.

    All the numbers point to a major decline in bank failures and the “costs of bank failures”…

    Outside these PR failures the average monthly est costs to FDIC have been about $2B/month in 2010. This is down from about $5B/month in the peak 6-months… which ended about the end of last summer.

    The # of failures is very misleading as over half the failures in 2010 have been very small banks with est costs of under about $100M each.

  8. cognos,

    where would you like to stake-out the POB?
    (ref. )

    and, for your favor, we’ll forget all about

    to the first Q: , do you want to Start w/, or w/o TARP, the GSE ‘Laundromat-cycle’, and the FedRes’ multi-Trillion U$D “QE” actions?

    We can leave aside such minor matters as FDIC “backstops”, and

    You choose..

  9. alfred e says:

    @cognos: Ah, there you are.

    It’s fine for you to tout the great news.

    Except you don’t mention Bernanke’s recent comments about how hard the fed is struggling to avoid closing banks, and his understanding that CRE is still a ticking time bomb.

    So yeah, dude, pump it up.

    Interesting dilemma. Banks are hanging on by a thread and cheating like crazy on asset valuations.

    They pay interest pretty much the way the fed charges interest to the TBTF.

    And they don’t make loans. Ever heard of something called the spread?

    So it’s probably larger than it’s ever been.

    So what does that tell you?

  10. [...] – US bank failures, illustrated. [...]

  11. mathman says:

    And so it continues:

  12. Greg0658 says:

    “Since 1913, when the Federal Reserve was created by Congress, your money has lost 96% of its purchasing power due to inflation”

    isn’t that more than half what makes this ponzi scheme work .. save now to pay for retirement later .. when you need to buy less stuff * generally .. short the daily stay alive stuff **- which is cheaper due to foreign labor and increased productivity in the farm fields and processing factories

    which is why this is going down this way – without a reduction in energy costs to keep the last century plan going – its gonna be a slowmo train wreck

    * coda – pots pans shovels picks chairs tables
    ** – water food heat trans-gas taxes and recreation

  13. Mike in Nola says:

    The FDIC has hired a slew of attorneys on two and four year appointments over the past 6-8 months. The positions call for 90-100% travel. There was also a lot hiring in associated positions dealing with distressed assets. I suppose Shiela is under pressure not to do more than she has to before the elections and we won’t see the actual results until those are over, unless the next liquidity crunch hits before then.

    I see Cognos is back since his government nannies are trying to put the risk trade back on and bail his ass out.

  14. xynz says:

    Thank you for the charts showing the total money involved in the failures. Would it be possible to get ones that match the granularity/resolution of the total number of bank failures in the current crisis?