It's Friday - Has your bank failed today?

NEW -> Contingent Buyer Assistance Program
Is it true that the only way the Feds can print more money or issue more IBDD's is to sell more treasury bills? Would this mean that they will have to raise the T-Bill rates to issue the money to bail out the FDIC?
 
[quote author="awgee" date=1217164073]I do not know which will go next, but it should be Downey. I do not understand how they are keeping their doors open.</blockquote>


I agree. It will definitely be Downey. Did anyone actually read their latest 10Q? My gawd... the numbers were A W F U L! The one thing they point out as being a positive is the decrease in liabilities. Well duh! When you have huge drop in deposits then your liabilities drop. This company has been run by monkeys for years now, and it really shows in their numbers.



Buh bye Downey.
 
[quote author="muzie" date=1217151442]

A scoreboard of the remaining FDIC reserve would be interesting as well. Indy Mac supposedly grabbed about 10% of the reserve. These two are much smaller, with 3.5B in assets vs. IndyMac's 30. So maybe another 1-2% of the reserve? A few of these every week, and pretty soon you're talking real money.</blockquote>




I read that the two this weekend would cost the FDIC $862M. What is the total FDIC reserve fund? $60B?
 
[quote author="freedomCM" date=1217217365][quote author="muzie" date=1217151442]

A scoreboard of the remaining FDIC reserve would be interesting as well. Indy Mac supposedly grabbed about 10% of the reserve. These two are much smaller, with 3.5B in assets vs. IndyMac's 30. So maybe another 1-2% of the reserve? A few of these every week, and pretty soon you're talking real money.</blockquote>




I read that the two this weekend would cost the FDIC $862M. What is the total FDIC reserve fund? $60B?</blockquote>


It was $58 billion before Indymac and most of it is in treasuries which would have to be sold on the open market.
 
[quote author="Failedagent" date=1217205172]Is it true that the only way the Feds can print more money or issue more IBDD's is to sell more treasury bills? Would this mean that they will have to raise the T-Bill rates to issue the money to bail out the FDIC?</blockquote>


What are IBDDs? The Fed can do whatever it wants and can print whatever it wants. The Fed is accountable to no one. It's balance sheet is supposed to follow standard accounting, but if push comes to shove ...
 
WaMu won't be next, they have to ramp up to do WaMu.



I think I read they have enough cash to last a while.



Meanwhile over at CR, somebody totalled up the unguaranteed

amounts and it was fairly stupendous. Anything more than a

small business would be hard put to keep the amts under 100k

becuase of payroll and money for accounts payalbe etc.



You've got a mere million and you're goinna have 10 accts at 10 different banks?



A nightmare!!
 
I could be wrong, BUT the Fed cannot just print money on a whim. They have to buy T-Bills. For every T-Bill they buy they COULD print an actual paper dollar, but instead they issue an internal bank deposit (IBDD) which a bank COULD redeem for paper dollars. If my understanding is correct, the only way for the Fed to "print more money" is to convince people to buy more T-Bills so that the Fed can afford to buy some of the older T-Bills back. It is intersting to note that the US government cannot buy back T-Bills simply by cranking up a printing press. If the government cannot afford to buy back T-Bills with tax money, it must convince the public to purchase new T-Bills by raising the interest rates. The US dollar in NOT a currency where paper money can simply be printed and distributed to the public.



One of the effects of having Japanese and Chinese purchase US T-Bills is that it allows the US government to increase the money supply the same amount. This lowers interest rates, increases the money supply, and is partly responsible for the credit boom we saw. These foreign investors lose big when the dollar gets devalued because of inflation.



I think the way this banking crisis will work out is that the Fed will have to raise interest rates on T-Bills to generate enough cash reserves to bail out the FDIC. THis increase in the T-Bill interest rates will drive up US interest rates in general, increase mortgage rates, drive down real estate prices, and attract more foreign investment. What is really wierd is that increasing the money supply should be an inflationary influence, but the effect of higher interest rates will also be a deflationary influence for real estate.
 
[quote author="usctrojanman29" date=1217148037][quote author="freedomCM" date=1217145726]should we start up a pool as to who goes down first: Downey or WaMu?</blockquote>
Downey will go first, I'll bet $100 on it. I also think that Yineyard Bank will be right after Downey and then it will be WAMU's turn.</blockquote>


In today's LA times business section, Vineyard bank advertised a 3 month CD for 4.15% and a 6 month for 4.5% with only a $1,000 minimum. Since they have an office in Irvine, I was going to ask if anyone had any information about them.
 
[quote author="Failedagent" date=1217226905]I could be wrong, BUT the Fed cannot just print money on a whim. They have to buy T-Bills. For every T-Bill they buy they COULD print an actual paper dollar, but instead they issue an internal bank deposit (IBDD) which a bank COULD redeem for paper dollars. If my understanding is correct, the only way for the Fed to "print more money" is to convince people to buy more T-Bills so that the Fed can afford to buy some of the older T-Bills back. It is intersting to note that the US government cannot buy back T-Bills simply by cranking up a printing press. If the government cannot afford to buy back T-Bills with tax money, it must convince the public to purchase new T-Bills by raising the interest rates. The US dollar in NOT a currency where paper money can simply be printed and distributed to the public.



One of the effects of having Japanese and Chinese purchase US T-Bills is that it allows the US government to increase the money supply the same amount. This lowers interest rates, increases the money supply, and is partly responsible for the credit boom we saw. These foreign investors lose big when the dollar gets devalued because of inflation.



I think the way this banking crisis will work out is that the Fed will have to raise interest rates on T-Bills to generate enough cash reserves to bail out the FDIC. THis increase in the T-Bill interest rates will drive up US interest rates in general, increase mortgage rates, drive down real estate prices, and attract more foreign investment. What is really wierd is that increasing the money supply should be an inflationary influence, but the effect of higher interest rates will also be a deflationary influence for real estate.</blockquote>


Who is going to tell the Fed they can't print, (electronically enter numbers on their computers)? And who is going to penalize the Fed if they do exactly that? Congress created the Federal Reserve and the Fed reports to Congress, but the Fed is not accountable to Congress. The only thing Congress can do if the Fed breaks the rules of it's charter is to pass a law. And that would just be more closing the barn door after the animals are out. My guess is the treasury dept. will print, (electronically), T-bills, the Fed will buy them, (with electronically created dollars), and the treasury will hand the money to the FDIC. Just a guess.
 
McCain's son allegedly just resigned from Silver Something Bank.



Didn't Profette say something bad about this bank? So maybe the

son is getting out before the old man is embarrassed. Supposedly

he hasn't be involved long enuf to be guilty of anything.
 
So, <a href="http://calculatedrisk.blogspot.com/2008/08/firstfed-and-option-arms.html">Calculated Risk points to an article in the WSJ today</a> about Option ARMs exploding and its effect on First Fed.



Funny thing is, sitting on my desk is a postcard from First Federal Bank of California announcing the opening of their new branch in Irvine on 8/13. (There will be wine! And hors d'oeuvres!) Think they are trolling for deposits? The WSJ piece was probably not the publicity they were looking for in advance of the new branch opening.
 
[quote author="ABC123" date=1217229420][quote author="usctrojanman29" date=1217148037][quote author="freedomCM" date=1217145726]should we start up a pool as to who goes down first: Downey or WaMu?</blockquote>
Downey will go first, I'll bet $100 on it. I also think that Yineyard Bank will be right after Downey and then it will be WAMU's turn.</blockquote>


In today's LA times business section, Vineyard bank advertised a 3 month CD for 4.15% and a 6 month for 4.5% with only a $1,000 minimum. Since they have an office in Irvine, I was going to ask if anyone had any information about them.</blockquote>
My buddy works there and basically he mentioned that he wouldn't be surprised if the bank gets taken over the Fed before year end because they've stopped commercial real estate lending.
 
So, our new cue to a bank's demise is: Those offering the highest interest rates for savings are going under soon.
 
I wouldn't necessarily say that high rates = going under, but I do remember when Indymac and Countrywide were advertising the highest interest rates.



Speaking of high rates, <a href="http://shareplus.com/ContentPage.aspx?name=50th+Anniversary">SharePlus Federal Bank</a> advertised a 5% CD in the Irvine paper. Since the branches seem to be located in all of the Yum Brands corporate offices, I would say their depositor base is pretty strong. One can never eat too much Taco Bell and KFC in times like these.
 
[quote author="ABC123" date=1218148289]I wouldn't necessarily say that high rates = going under, but I do remember when Indymac and Countrywide were advertising the highest interest rates.



Speaking of high rates, <a href="http://shareplus.com/ContentPage.aspx?name=50th+Anniversary">SharePlus Federal Bank</a> advertised a 5% CD in the Irvine paper. Since the branches seem to be located in all of the Yum Brands corporate offices, I would say their depositor base is pretty strong. One can never eat too much Taco Bell and KFC in times like these.</blockquote>


The SharePlus CD is limited to $5K. Bummer... I am still need to fire up a few more CDs.
 
Federal regulators have ordered Vineyard National Bank of Corona to stop accepting so-called hot-money deposits that are considered too risky for the money-losing bank.
 
[quote author="tmare" date=1218112135]So, our new cue to a bank's demise is: Those offering the highest interest rates for savings are going under soon.</blockquote>


Wamu is advertising all over the place with high interest savings accounts... so, if this holds true, Wamu will be next?
 
[quote author="Girl In the OC" date=1218160709][quote author="tmare" date=1218112135]So, our new cue to a bank's demise is: Those offering the highest interest rates for savings are going under soon.</blockquote>


Wamu is advertising all over the place with high interest savings accounts... so, if this holds true, Wamu will be next?</blockquote>


I don't know if it's really true, it's just an obvious recent observation and we do know that WAMU is in trouble also.
 
[quote author="tmare" date=1218160149]Federal regulators have ordered Vineyard National Bank of Corona to stop accepting so-called hot-money deposits that are considered too risky for the money-losing bank.</blockquote>


Does that mean they won't let me open up a $97.5K CD at 4.5%?
 
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