At this point last year, the FDIC had closed “only” 100 banks. We are on pace to exceed last year’s record setting bank closures by 30%.

Ron Griess of The Chart Store has the gory details:
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click for larger charts

Category: 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.

13 Responses to “FDIC Bank Closings #129”

  1. JustinTheSkeptic says:

    Yea, keep reminding me how the government put, put, puts…keep puting it in my ass, ass, ass… Will we ever have a true market? One in which taking chances ment that the “true” risk taker wins…not the people who’s hands are already in the pockets of Washington and Wall Street.

  2. DeDude says:

    Second half of 2009 had an annual pace of about 190/year. I doubt that 2010 as a whole can break that (since the first half only was about 175/year and second half seems to be heading for 165/year).

  3. ancientone says:

    Sorry, Justin, this is one government progam that helps the little guy. Without FDIC insurance, many small savers (me included) would have been wiped out by now just as in the thirties—–which is what the Republicans seem to want. They were strongly against setting up FDIC insurance then, saying banks couldn’t afford the premiums and that it would destroy the banking industry—–what a pile of crap!
    I have my retirement funds in five different local banks, and two of them have failed this year, and I haven’t lost a dime. Go find another dog to kick.

  4. dr dre says:

    De Dude… the declining # of bank closings is “less worse” but its still phucking bad! maybe this is why gold is on a tear…. the world we live in… crazy!

    Dr. Dre
    __

    http://capitalmercenary.blogspot.com/

  5. Andy T says:

    C’mon Barry….

    You’re the “Quant/Stats/Hard Numbers” type of guy….

    the Gap is actually closing over the last ~6 months….

    As Mark Twain may have said: “There are three kinds of lies: lies, damned lies, and statistics.”

  6. Andy T

    If these were seasonal based numbers that followed a similar pattern every year, you would be correct.

    But they are not — they are based on FDIC assessment of bank solvency and likely failure, and the probability of even higher guaranteed payouts. I’m not certain there is any pattern here, other than accelerated closings.

    But If you insist on looking for some sort of pattern — and seasonality isn’t it — than its as the FDIC runs lower on reserve cash, they tend to close shaky banks sooner rather than later to head off greater insurance payouts.

  7. michaelismoe says:

    The FDIC: Making the markets safe for the TBTF.

    Just out of curiosity, how does Citi stay open Friday after Friday after Friday? Their ratios can’t be any better than the crap the FDIC closes down.

  8. Kenneth says:

    BR beat me too it, but Andy T, what’s with the half-assed criticism? That was pretty lame.

    I understand haters gotta hate, but you gotta bring game if you are going to challenge the numbers. Of course there are lie, damned lies and statistics. But there are also bullshit critics and lazy comments. That is you X two.

  9. Stephen says:

    Last Year’s bank closures were not “record setting” in terms of the number of bank failures. There were 400+ failures in 1988 and 500+ in 1989…

    The cost to the FDIC per bank is also dropping dramatically in 2010 as bidding has become more competitive.

  10. Stephen

    What is the data source for that ?

    Your comment sent me off researching, and a quick FDIC search found that 1988 had 279 closings, and 1989 had 207.

    FDIC:

    The savings and loan industry’s worst year was 1989, with losses totaling more than $19 billion. The FDIC’s insurance fund was under severe pressure as well. In the FDIC’s 1989 Annual Report, Chairman L. William Seidman described 1989 as “the most demanding year in the 56-year history of the FDIC and a likely harbinger of more tough times ahead.”

    The chart says worst year since 1992 — i don’t see anything inaccurate about that.

  11. louiswi says:

    Speaking of Savings and Loan and 1989, why wasn’t a Resolution Trust Corporation solution used this time. It seems when crooks and caretakers run amok RTC was and and would continue to be a good solution.
    As I recall, all the crap was put into a giant manure pile and the sorting and re-pricing process occured at a controlled pace for a number of years hence and it seemed like it worked pretty well.

  12. DeDude says:

    dr cre

    Gold has always been the Armageddon trade; but nothing in the bank closure numbers should spike Armageddon fears unless you are a complete Armageddon addict. We had much higher numbers back in 1988 and 1989 (counting apples to apples), and as mentioned current numbers are improving not getting worse. The current gold rush is from Armageddon fear over sovereign defaults and currency debasement.

    DrDude

  13. obsvr-1 says:

    the rate of closures is improving, however the number of banks on the FDIC watch list is still increasing:

    Problem Banks
    End of 2009 702
    End of June 2010 829