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alstry (36.34)

Get you lifevests on......Please!!!

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March 29, 2009 – Comments (2)

'We need banks ... to take risks again' - Geithner

?????????????????????????????????????????????????????????????????????????????

Is this really the case.......or do  we need borrowers to be able to qualify to borrow money.???

How do borrowers qualify to borrow???.....simple, they have jobs and an income that permits them to meet monthly expenses.....including servicing debt.

Right now millions and millions of families do NOT qualify to borrow a dime......and many more  families are simply buying time by borrowing on their credit cards, or from family, to make ends meet......

And its not just families.....it is commercial real estate projects as well......

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=172039&t=01004034443672390362

And businesses, and cities and states.

You see Mr. Geithner, what we need is an economic system where the revenues meet or exceed the monthly expenses.......until they do, we dig a deeper hole for ourselves.  The problem with inflation is expenses rise faster than income....as a result, inflation agitates an already bad problem.

Right now....it is likely that 2/3 of the California Banks may be ordered to shut down in 2009....2/3?

By the end of 2009, two-thirds of the state's banks will be operating under cease-and-desist orders or other regulatory actions, Anaheim-based banking consultant Gary S. Findley predicts.

http://www.latimes.com/business/la-fi-banks28-2009mar28,0,2513212.story

What many don't realize is that a significant part of most banks owned portfolio of assets is COMMERCIAL real estate loans, many sold off their residential loans to syndicators.  Now that commercial loans are starting to sour, we are just beginning to see the effects on banks......

The FDIC, a primary regulator of many state-chartered banks as well as the guardian of federally insured deposits, has announced 10 public enforcement actions against California banks and bankers in the first two months of this year, compared with 24 in all of 2008 and no more than seven in each of the preceding three years.

the Federal Deposit Insurance Corp. disclosed Friday that it had ordered six more California banks to clean up their acts in February after the agency examined their books and operations.

7 in previous years

24 last year

10 so far this year

6 on Friday........any trends developing as commercial real estate loans starting to collapse.

I have been warning you the mother of all tsunami is coming.....the water is now rising on shore.....U6 unemployment is around 20% in many areas of the country, foreclosures continue to escalate from ALREADY unprecedented levels, companies continue for fire workers, ship jobs overseas, and/or shut down,.....citiies and states in finanicial crisis

few jobs, rising foreclosures, evaporating earnings.........that is simply the facts......earnings will be flowing in the next few weeks.........get your life vests on......

Prepare.....Don't Fear......

If this keeps going.....maybe everyone will become volunteers.......comrades.

2 Comments – Post Your Own

#1) On March 29, 2009 at 2:06 PM, alstry (36.34) wrote:

From CalculatedRisk:

At least a dozen of the 52 Washington-based banks examined are carrying heavy loads of past-due loans, defaults and foreclosed properties relative to their financial resources. ...

I have friend analzying local banks around the nation......many of these banks are depdendent on commercial real estate loans....many of these loans have defaulted or are in danger of defaulting soon.........

It is the defaulting soon loans that are really going to cause problems....

Until we start addressing the toxic borrowers.......toxic debt is spreading parabolicly.

Remember, Washington State is one with a relatively strong economy......

Sorry for the spelling mistake in the title....but even Alstry has some faults

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#2) On March 29, 2009 at 3:51 PM, pjani06 (29.22) wrote:

Good post, but that Findley report on CA banks is misleading as regulatory actions can include simple compliance issues that the regulators are big on but managment/board have been lazy on such as BSA (bank secrecy act) which would track movement of all your funds.

So many banks in CA have opened up in recent years that there was actually a shortage of assets to fund/lend to.  This created a glut of excess capital.

In fact, there is so much excess capital that CA would have been just fine if they let the big dogs go under instead of bailing them out, because all the smaller banks would have picked up the slack & would have had the opportunity to put that capital to use.

Instead, to fund their assets most the banks had to resort to purchasing MBS, US Govt Bonds, or purchasing loans from the big banks.

Sad.

Underlines how subservient our congressional leaders from both parties are to the anti-competitives big banks/companies.

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