Hundreds of banks will fail, Roubini tells Barron’s

NEW YORK, Aug 3 (Reuters) – The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron’s in Sunday’s edition.

Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Roubini said — at least $1 trillion and more likely $2 trillion.

The banks will become insolvent because of mounting losses as a result of the housing bust and because they have only written down their subprime loans so far, he said. Still in front of them are their consumer-credit losses, for which they lack the reserves, Barron’s reported.

He also said there are hundreds of millions of dollars outstanding in home-equity loans that could be worth zero, too.

Read moreHundreds of banks will fail, Roubini tells Barron’s

Star analyst: Credit crunch far from over

The star analyst tells Fortune magazine that housing woes will force banks to keep taking writedowns.

NEW YORK (Fortune) — The credit crisis is far from over, star analyst Meredith Whitney tells Fortune magazine in its upcoming issue.

Whitney, who audaciously – and correctly – predicted last October that Citigroup (C, Fortune 500) would have to cut its dividend, tells the magazine that banks in general today are still facing much bigger credit losses than what they’ve reported so far.

The Oppenheimer & Co. analyst warned last year – and continues to warn today – that the “incestuous” relationship between the banks and the credit-rating agencies during the real estate bubble will have a long-lasting impact on banks’ ability to recover.

Read moreStar analyst: Credit crunch far from over

What is happening to America?

RonPaul: “We don’t even know if they have the Gold there anymore.”


Source: YouTube

People will not realize the main problem in America until they actually take the time to do some serious research for themselves, but hopefully this video may open that window for you.

The primary cause of loss of liberty is our ever expanding government and it is manifest in the resulting economic situations.

Read moreWhat is happening to America?

Royal Bank of Scotland poised for biggest loss in UK banking history

Britain’s second largest bank expected to reveal it has lost £1 billion in first half

THE Royal Bank of Scotland is poised to unveil the biggest loss in UK banking history after taking a hit of almost £6 billion from the credit crisis.

Britain’s second-largest bank is this week expected to reveal a pre-tax loss of at least £1 billion for the first six months of the year, with analysts warning it could slide to as much as £1.7 billion in the red.

The loss would be roughly five times higher than the deficit racked up by Barclays in 1992 at the height of the last recession.

RBS chairman Sir Tom McKillop is already under pressure from investors after the bank’s recent £12 billion rights issue. His chief executive, Sir Fred Goodwin, who marks 10 years at the bank this weekend, also faces shareholder scrutiny.

Read moreRoyal Bank of Scotland poised for biggest loss in UK banking history

Report: Obama, Potential Iran Attack, Financial Collapse

Published for some of the information on the economy.


Added: August 02, 2008

Source: YouTube

Borrowings of Depository Institutions from the Federal Reserve

Ready for a little shock? Link

A reader has discovered this on Digg: “This is how fucked we are

That says it all.

Related article: Stressed banks borrow record amount from Fed
What does it mean if you have such a huge “shortage of liquidity in your system”?
Hmmmhhh?!? Oh! Run, run, run.

According to the FDIC I am just another blogger creating fear in the marketplace, so don’ t worry.

You can trust the government on this:

WASHINGTON, July 22 (Xinhua)
U.S. Treasury Secretary Henry Paulson said Tuesday that the U.S. banking system is sound and the long-term fundamentals of economy are strong.

December 5, 1929
“The Government’s business is in sound condition.” — Andrew W. Mellon, Secretary of the Treasury

More Quotes from the Great Depression:

Read moreBorrowings of Depository Institutions from the Federal Reserve

Stressed banks borrow record amount from Fed

NEW YORK (Reuters) – Banks borrowed a record amount of funds from the Federal Reserve in the latest week as the year old credit crisis took a persistent toll, while the commercial paper market continued to contract, signaling tough conditions for short term borrowers.

Banks’ primary credit borrowings averaged $17.45 billion per day in the latest week, the second straight week this had hit a record and up from $16.38 billion the previous week, Fed data showed on Thursday.

“It shows there’s a shortage of liquidity in the system,” said Christopher Low, chief economist at FTN Financial in New York.

Read moreStressed banks borrow record amount from Fed

Small Florida bank is 8th U.S. failure this year

WASHINGTON (Reuters) – Bank regulators closed a small Florida-based bank on Friday, the eighth U.S. bank to fail this year under pressure from a weak economy and a credit crisis precipitated by falling home prices.

The Federal Deposit Insurance Corp said First Priority Bank had $259 million in assets and $227 million in deposits and its failure will cost the federal fund that insures deposits an estimated $72 million.

SunTrust Banks Inc (NYSE:STINews) has agreed to assume the insured deposits of First Priority, whose six branches will reopen Monday as branches of SunTrust Bank.

Read moreSmall Florida bank is 8th U.S. failure this year

FDIC warns four US banks over liquidity

The Federal Deposit Insurance Corporation revealed on Friday that it had issued warnings to four small US banks that lacked sufficient reserves to cover potential loan losses.

The cease-and-desist orders issued in June said the four banks needed to raise more capital, expand their loss allowances and better oversee and diversify their loan portfolios. A fifth bank was cited for violating consumer protection laws.

Losses on mortages and other loans have helped bring down eight US banks this year, including one small Florida institution on Friday.

Read moreFDIC warns four US banks over liquidity