With all the FNM, FRE news this weekend I didn't even post on the eleventh bank failure of the year "Silver State Bank in Nevada is shut". Apropos of nothing-...
...Now the real news, from Option ARMageddon:
The Federal Deposit Insurance Corporation is on the brink of bankruptcy and taxpayers may be forced to pony up hundreds of billions to bail it out—for the second time in a generation.
All the while banks like Washington Mutual are deliberately putting taxpayers at greater risk. But more on WaMu later....
On August 25 it was "Wilbur Ross: "1000 Banks to Fail". Nine down, 991 to go. What an Opportunity"
And in August 23's "If it's the Weekend it Must be Bank Failure Time!" we said:
Actually it's been three weeks. In all seriousness pay attention to those FDIC limits.
Or use this bank....
I'm not doing this to show off my typing skills. From Gambling911:
With news that Lehman Brothers is facing immanent bankruptcy and Merrill Lynch is likely to be taken over by Bank of America, many are wondering if troubled Washington Mutual could be the next bank to fail.
30 percent of those placing bets at financial prediction market, intrade.com believe that Washington Mutual will fail by year's end....
From Naked Capitalism:
The alert have taken note that the failure of Washington Mutual, which looks increasingly likely, would consume the FDICs reserves and, as in the savings and loan crisis, force the agency to go hat in hand to Congress for more money.
But this is comparatively early in our burgeoning banking crisis for the bulwark of commercial banks to be tested. Worse, the concern is that uninsured depositors will flee weak banks, and in process, push more over the edge.......From the Financial Times:
Attention has focused on the danger presented by the failure of Lehman Brothers. But the failure of a commercial bank such as Washington Mutual can have systemic consequences if it threatens a run on other weak banks....
The failure of a bank its size would test the strength of the US deposit insurance system and its ability to maintain the confidence of the nation's savers.
The US Federal Insurance Deposit Corporation covers the first $100,000 in deposits held by each individual in a given bank. As of June 30, 64 per cent of the total $7,000bn deposits were insured in the US - a much larger proportion than in the UK at the time when Northern Rock. the commercial bank, failed.