Friday Night Frights 07-30-2010

The over/unders were 5. It’s a push. Five banks failed.

“My feet hurt” and “I’m tired of giving in.”*

Citigroup agreed to pay $75 million in fines. When the subprime problem began to unravel Citi lied to regulators, claiming they only had $13 billion in exposure to subprime loans when they really had closer to $43 billion in exposure. When Citi’s losses started to cascade, the government ultimately bailed them out. In reaching the settlement, Citi did not admit or deny wrongdoing. Only real people go to jail, not corporations.

About 19 million homes were vacant in the second quarter. Home ownership is at the lowest level in a decade. More than 3 million home owners will receive foreclosure notices this year and more than one million will lose their homes to foreclosure. For every house on the market there are at least two homes sitting vacant, waiting to be sold; it’s called “shadow inventory”. Shadow inventory doesn’t include people who want to sell but can’t because the market is so weak. Mix in high unemployment and the fact that wages for 98% of Americans have dropped over the past 30 years and you have the recipe for further declines in home prices. You might think more problems in the housing market would be bad for the big banks but it would be foolish to bet against them. The megabanks actually make money on foreclosures; it’s the rest of the economy, the small banks, the local businesses, municipalities, and families that get clobbered; out of business, out of jobs, out of money, and no roof over their heads.

The reality is sinking in; consumer confidence dropped in July. Maybe we are all turning into grumpy old folks. Maybe we have good reason. A friend marked the third anniversary of the passing of his father. The Greatest Generation left us a golden legacy and it looks like we’ve squandered it. Who’s to blame? The Mexicans - at least that is what some politicians are trying to pawn off on us. They figure that if we blame the Mexicans, we won’t blame them. Bigotry is a powerful tool to divide and conquer.

It’s easier to blame the Mexicans for stealing all those quality jobs in the lettuce fields than to find the real reason why middle class jobs have been shipped overseas. It’s easier to blame the Mexicans for exploiting the health care system than to explain how the big corporations have been able to buy politicians and siphon the Treasury. It’s easier to pay homage to a golden idol than to wash the feet of a poor carpenter.

Sheriff Joe Arpaio (self-described as the Meanest Sheriff in America) recently set up camp on a quiet, two-lane desert road, south of Phoenix. The Sheriff and his patrol had an armored RV with a 50-caliber machine gun mounted on top. They forced drivers to stop and show proof they were not illegal. The first arrest under SB-1070 was made yesterday; the man made the mistake of driving with a busted tail light; he had been living in Phoenix since 1992. As he was hauled away he kept shouting “I have documents. I have documents.”

Meanwhile, Citigroup lied to the government about their portfolio and then pocketed billions of taxpayer dollars. Goldman Sachs bet that homeowners would default on inflated, usurious mortgages and then lied to investors and the government and then pocketed billions of taxpayer dollars. These banksters and their bankster cronies nearly destroyed the economy as they looted the Treasury. How many of these crooks have been hauled off? So far, zero. When you don’t have to admit or deny wrongdoing, you are not an “illegal”.

If you are looking for someone to blame for the terrible state of the State, you can start by looking in a mirror; then look at the most powerful among us – the people that can break the law with impunity. The last place you need look is at the least powerful.

Bank Failure # 104 NorthWest Bank and Trust, Acworth, Georgia, was closed Friday, July 30, 2010 by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver. State Bank and Trust Company, Macon, Georgia will assume all of the deposits of NorthWest Bank and Trust.

NorthWest Bank and Trust had approximately $167.7 million in total assets and $159.4 million in total deposits, and 2 branch locations.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $39.8 million. NorthWest Bank and Trust is the 104th FDIC-insured bank failure  in the nation this year, and the 11th in Georgia.

Cert # 57658

Bank Failure # 105 Bayside Savings Bank, Port Saint Joe, Florida and Coastal Community Bank, Panama City Beach, Florida, were closed today by federal and state banking agencies, which then appointed the FDIC as receiver for both institutions. Centennial Bank, Conway, Arkansas will assume all the deposits and essentially all the assets of the two failed institutions.

Collectively, the two failed institutions operated 13 branches. Bayside Savings Bank had total assets of $66.1 million and total deposits of $52.4 million. Coastal Community Bank had total assets of $372.9 million and total deposits of $363.2 million.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $16.2 million for Bayside Savings Bank and $94.5 million for Coastal Community Bank. These two closings bring total closures for the year to 106 banks in the nation, and the 19th and 20th in Florida.
Bayside Savings Cert # 57669
Coastal Community Cert # 9619

Bank Failure # 107 - The Cowlitz Bank, Longview, Washington was closed by the Washington Department of Financial Institutions, which appointed the FDIC as receiver. Heritage Bank, Olympia, Washington will assume all of the deposits of The Cowlitz Bank.

The Cowlitz Bank had approximately $529.3 million in total assets and $513.9 million in total deposits, and 9 branch locations.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $68.9 million. The Cowlitz Bank is the 107th FDIC-insured institution to fail in the nation this year, and the eighth in Washington.

Bank Failure # 108 - LibertyBank, Eugene, Oregon, was closed today by the Oregon Division of Finance and Corporate Securities, which appointed the FDIC as receiver. Home Federal Bank, Nampa, Idaho will assume all of the deposits of LibertyBank.

LibertyBank had approximately $768.2 million in total assets and $718.5 million in total deposits, and 15 branch locations.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $115.3 million. LibertyBank is the 108th FDIC-insured institution to fail in the nation this year, and the third in Oregon.
Cert # 31964

*Rosa Parks
Sinclair Noe
Eat the Bankers