It’s the end of the world as we know it, and I feel fine. Banks can’t really say that. Heard news just before I left home to come into work for the first time in over two weeks that looked just plain nasty, and all of it from the FDIC.
The Number of Problem Banks has risen sharply, from 171 last quarter to 252 this quarter.
The problem banks, whose names are not realased to protect them from bank runs hold combined assets of $159,000,000,000.
The FDIC has set aside $22,000,000,000 in FDIC insurance fund money for bank failures.
The Banking Industry lost $26,200,000,000 last quarter. It was the first time the Industry has lost money in any quarter in 19 years.
And there is more. Ouch. I am surprised that the DJIA only fell 88.81 points today. When the news came out, the Dow was up 35 or so points. As Sheila Bair was announcing this, as the news filtered down to the floor towards the end of the press conference, the market started to drop. It had lost 60 points by the time she finished talking. Now I don’t know that that was the only market stressor that had an effect on the market at that point in the day, but it must have had some effect there.
But the jobs and housing numbers and durable good numbers that came out earlier in the day had some effect on the market. Without those gloomy numbers, the market would have absorbed that news more easily, I think. Without that the market would have been up a helluva lot more than 35 or so points before the FDIC news hit.
I’ll tell you one thing, i’m sure there won’t be a run on the banks like there was a run on money markets after Lehman’s collapse last september. For all that there is a lot of bad news there, it isn’t to my mind big enough, and has not had enough of a news splash, for it to have that kind of an effect.
A final video, from CNBC, of Ron Paul giving an opening statement to the banking committee prior to Questioning Ben Bernanke. The person who put this video up title the damn thing “THIS IS NOT GOING AS PLANNED” as if CNBC was somehow afraid of airing the opening statement of Ron Paul, despite the fact that they just had. Silly paranoid people.
I have work to do, so that’s about it for me. Later.
Today’s Nuggets, Via wikiquote: The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple that the mind is repelled. John Kenneth Galbraith
I went to the bank and went over my savings. I found out I have all the money that I’ll ever need. If I die tomorrow. Henny Youngman.