Failure Friday December 11, 2009 – Updated

Posted by Ray on December 11, 2009 under Main | Be the First to Comment

This seems to get no press anymore, but we still have banks failing at a record rate. Tonight we have 3 more bank failures, Republic Federal Bank out of Miami, Solutions Bank out of Overland Park KS and Valley Capital Bank out of Mesa AZ. Last week we had 6 bank failures and year-to-date we have a total of 133 banks that have failed. Nothing to see here, everything is fine so keep buying stocks as there is no risk. Even though we have the smart money, the credit markets, keeping short-term treasuries near zero.

I am sorry, but when the smart money is saying. pay me nothing for up to 6 months and we are having banks fail at a record rate there is a problem. Retail sales may be up, we may have a stimulus induced GDP pump, mostly because of a devalued dollar, which is coming to an end quickly here, but there is no real recovery. The employment reports are showing zero hiring as the average worker is looking for work, and giving up, after a record 27+ weeks and is either removed from the labor force or placed on the EUC and no longer counted. These are all signs that something is about to happen.

Today’s Failures:

Bank	State	Assets	Deposits
Republic Federal Bank	FL	$433M	$352M
Solutions Bank	KS	$511.1	$421.3M
Valley Capital Bank	AZ	$40.3M	$41.3M
Total	1	$984.4M	$814.6M

Estimated FDIC Losses, including loss-share agreements:

Immediate Loss	$252.1M
Loss-share agreement	$651.5M
Total	$903.6M

Not bad for an organization that is already running in the red. I guess it is a good thing Congress just decided to raise the debt ceiling by $1.8T to just about $14T altogether. It is shocking that the dollar actually went up in value today, but it is merely short covering and once people realize that Ben will never raise interest rates, see failed bank list total above, ever again I am sure the dollar will come down again.