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13 bank failures this year...is this a sign of things to come?

By
Title Insurance with Bell Title /Triserv LLC

This time one year ago, the recession was officially in full bloom and there was 1 bank failure to date and 13 through the end of the 3rd quarter (5 on February 13th alone). The FDIC reports 13 year to date. That equals a 1300% increase over the same time last year and assuming that statistic holds true, then there will be an additional 312 failures this year alone. A scary prospect for those of us looking for a positive nugget of hope in an otherwise dismal forecast.

So what does all this mean?

Well, our banks are in rough shape....no doubt. The detritus of bad assets currently out there are just now starting to show themselves on bank balance sheets. The credit crisis is real. Investors are concerned. Financial institutions are not able to raise money to cover their capitalization ratios. The assets are performing worse than expected and perhaps worst of all, we have a long way to go before we see the bottom.

Okay, I laid it out there. It is really ugly and for all intensive purposes getting uglier. Does this mean the end is near. I hardly think so. The fact is that the assets that are clouding the balance sheets of some of our most venerable financial institutions is troubling and must be dealt with swiftly. Valuing them and moving them off the books is a remedy that has to be done with conviction and a clear plan. Our entire financial well being and the international communities is at stake. I do believe we will find the solution some time by the end of the 3rd quarter, probably in the way of an additional stimulus package (maybe more on that later). In the meantime, let's hope that the largest bank at the end of the day is not a nationalized one in the form of Uncle Sam.

Stay Sharp and good luck!

Your ActiveRain partner and national title agent,

Until next time my friends,


LEADING EDGE TITLE SOLUTIONS

Matching experience with technology to give

you the edge to be a mortgage industry leader

 

Bo Hussung

Vice President of Sales

phone ~ 615-438-7300 fax ~ 678-261-1594

email me ~ bhussung@cogentca.com

web ~ www.cogentca.com


 

Show All Comments
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

Bo - I'm hoping that the bailout plans are all over, and that people will be stop waiting for something to happen.

Feb 17, 2009 01:12 PM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Many of the largest banks are fundamentally insolvent. The government must prop them up or the crisis worsens. Wall St knows it and is waiting to see what the government will do to keep them from failing. We're going to see lots of creative accounting practices during the coming year, and, in the end, we'll all suffer the nasty results of living beyond our means.

Feb 17, 2009 01:20 PM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Hi Bo. The thought of an additional stimulus plan is stunning to say the least.

Feb 17, 2009 01:35 PM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Hi Bo

The market has to work though the issues to resolve their problems and additional banks will fail. When we had the issues with the Saving and Loans over 130 Saving and Loan failed.

Good luck and success

Lou Ludwig

 

Feb 17, 2009 01:58 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

I suspect there will be more banks that fail!  The question is how many more!  As far as the bailouts and the stimulus packages - I hold my nose with the fingers of one hand, but have my fingers crossed on the other.

Feb 17, 2009 02:20 PM
Christopher Bonta
The Bean Group - Londonderry, NH
Realtor, Integrity and Honesty

If we believe we will have another 6-9 months of rough times then we will, if we don't we won't. I know there are still huge debits and bad credits sitting on a lot of bank balance sheets, but if we preceive that things will get worse they will.

I'm not saying we should look through rose colored glasses, I'm saying lets be realistic. I think some additional banks will fail but most of the ones that will, have already failed. As for Wall Street I think they have hit bottom, it dropped from 15,000+ points to an average of 8,000 points now.

I choose to view things in a brighter light, I think we will see improvements starting by August/September.

Feb 17, 2009 02:30 PM
Kathy Hyatt ~Plantation, Davie, Sunrise REALTOR
Remax Services - Plantation, FL
Broward Realtor Selling Plantation,Davie & Sunrise

I just dont know what is going to happend, it seems everytime I turn around I see another Bank merging or closing doors.  It is sad.

Feb 17, 2009 02:31 PM
TeamCHI - Complete Home Inspections, Inc.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029

Bo, I too hope that the bailouts are over. I have heard rumors that another bill looms on the horizon...

Your building consultant for life in the Spring Hill, TN area - Michael

Feb 17, 2009 07:10 PM
Bo Hussung
Bell Title /Triserv LLC - Nashvle, TN

Larry, We no doubt need some assistance from the government, but we can not wait around for them to fix everything. At some point we need to get busy. Thanks~ Bo

John, We are going to have to let the bad get washed out and worke through the system. It is going to be painful, but the end result is I truly believe we will all be better off. Thanks for the comment ~ Bo

Gary, your are correct and let's hope this one will correct a lot. I just don't think we are scracthing the surface of what is really needed. It is going to be really ugly for a long time. Hang tight and thanks. bove all else, lets keep the faith for something better at the end of that tunnel~ Bo

Feb 18, 2009 10:41 AM
Bo Hussung
Bell Title /Triserv LLC - Nashvle, TN

Lou, this is soo much worse than the Sand L debacle. We will have to have some pateicne that the system will work thisout. It is just not going to happen without some assistance. The hiope is that we do not dig deeper holes. They are already pretty ominous

Thanks for the comments

Bo

Myrl, I reight there with you on fingers crossed and some extra dash of hope. My guess for the failures....somwhere in the 500+ range over the next 24 months Ouch!

Bo

Christopher, the real question is perspective. You have the right idea. It starts with attitude and what to accomplish based on reasonable expectations. Being positive is a good start Thanks ~ Bo

Feb 18, 2009 10:45 AM
Bo Hussung
Bell Title /Triserv LLC - Nashvle, TN

Kathy, it is indeed sad, but we should remain positive and control the things that we can. The rest is a little too big and kiind of up to fate.... Hang in there ~ Bo

Michael, all my source seem to think that we will need an additional trillion to get us out of this mess. 782 billion is not enough. Hang on to your britches ~Bo

 

Feb 18, 2009 10:48 AM
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