Seven More Banks Fail!

From http://urbansurvival.com/week.htm

Friday July 3, 2009

Depression 2 Update: Seven More Banks Fail!

Oh, the joys of not having to get up with the first ring of the alarm clock! But then, as I laid in bed this morning wondering what to write about, it came to me in a flash: There have been numerous alarming signs and portents in the markets this week, if one knows where to look.

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The FDIC announced seven bank failures after the market closed Thursday, which brings the number of banks closed this year to 52. But, if you count the number of branch offices closed this week it's 30 branches.

Founders Bank

Millennium State Bank of Texas

First National Bank of Danville

Elizabeth State Bank

Rock River Bank

First State Bank of Winchester

John Warner Bank

But what's even more alarming is that if you look back over the last year of "We're not in a Depression" bank numbers, you'll see that the number of banks closed is nominally up to 75, but if you count up branches, the banking system has shuffled ownership of 2,969 branches.

That FDIC seems to be doing a smooth job of it - making depositors whole in each case (so far), one can't help but wonder what's the cost of all this to be in the longer term, especially since the real guts of the second leg down in financial markets isn't expected till this fall.

When will FDIC have to go looking to recharge its coffers?

Meantime, at least the bad news was released after the markets were closed and has an extra day to contemplate what this all means. Answer to that should be apparent to anyone with half a brain (Depression 2.0 may be real and George may not be so crazy after all...).

If you divide the total offices closed (2,969) by 51 weeks (since July 11, 2008 is the IndyMac failure - 51 weeks back) closings have been averaging 58.21 offices per week, although admitted the data is skewed a bit by the WAMU and Downey Savings failures. Still, the count is the count.