The number of troubled banks is growing. Find out if this will impact you plus some additional important information. I’m passing along an article from Martin D. Weiss, Ph.D. from http://moneyandmarkets.com. This is some valuable insight into things FDIC is NOT telling you and the condition of even the largest banks. I know you’ll find it valuable.
(The link to the troubled bank list is at the end of this article.)
Martin here with an urgent update on the next phase of the banking crisis.
Just this past Friday, the government released new data showing that the FDIC’s list of “problem banks” now includes 903 institutions.
That’s ten times the number of bad banks on the FDIC’s list just two years ago.
The banks on the list have $419.6 billion in assets, or SIXTEEN times the amount of two years ago.
And yet, these bad banks are …
Just the Tip of the Iceberg!
How do we know?
Because the FDIC has consistently neglected to include the most endangered species on its list of problem institutions — the nation’s megabanks that are among the shakiest of all.
The FDIC doesn’t reveal the names of the banks on its list — just the number of institutions and the sum total of their assets.
Still, I can prove, without a shadow of doubt, that the FDIC’s list of problem banks is grossly understated and inadequate.
Consider what happened on September 25, 2008, for example.
That’s the day Washington Mutual filed for bankruptcy with total assets of$328 billion.
But just 30 days earlier, according to the FDIC’s own press release, the aggregate assets held by the 117 banks on its “problem list” were only$78 billion.
In other words …
Washington Mutual alone had over FOUR times the sum of ALL the assets of ALL the banks on the FDIC’s list of problem banks!
Obviously, Washington Mutual was not on the FDIC’s list.
Obviously, the FDIC missed it. Completely.
Also not on the FDIC’s list: Citicorp and Bank of America, saved from bankruptcy with $95 billion in bailout funds from Congress. Just these two banks alone had over FORTY-SEVEN times more assets than all of those the FDIC had identified as “problem banks.”
Some people in the banking industry seem to think the FDIC can be excused for missing the nation’s largest bank failures for the same reason that blind men groping in the dark can’t be blamed for missing an elephant in the room.
But the fact is that the FDIC even missed the failure of a relatively smaller bank: IndyMac Bank.
When IndyMac failed in July 2008, the 90 banks on FDIC’s “problem list” had aggregate assets of $26.3 billion. But IndyMac alone had $32 billion in assets. Evidently, even IndyMac was not on the FDIC’s radar screen.
This is …
Easily One of the Greatest
Financial Scandals of Our Time
The FDIC’s problem list is supposed to guide banking authorities in their efforts to protect the public from bank failures. If the FDIC is missing all the big failures, where does that leave you and me?
Heck — it’s bad enough that they refuse to disclose the names of endangered banks. What’s worse is that they’re hiding the truth from their own eyes.
And with so many misses so evident, you’d think they would have changed their ways by now.
Not so.
Even as I write these words to you this morning, banking authorities are AGAIN failing to recognize, analyze, scrutinize, or tell the public about the real impact of the most intractable disaster of this era:
Major U.S. Banks Still Extremely
Vulnerable to the Foreclosure Crisis
Here are the facts …
Fact #1. JPMorgan Chase, Wells Fargo Bank, and Bank of America each have more than $20 billion in single-family mortgages that are currently foreclosed or in the process of foreclosure.
Fact #2. Each bank has at least DOUBLE that amount in a pipeline of foreclosures in the making — $43 billion to $55 billion in delinquent mortgages (past due by 30 days or more).
Naturally, not all of the past-due loans will ultimately go into foreclosure. But these figures tell us that the biggest players are not only in deep, but could sink even deeper into the mortgage mayhem.
Fact #3. Combining the foreclosures and delinquent mortgages into a single category — “bad mortgages” — the sheer volume still on their books is staggering:
- JPMorgan Chase (OH) has $65 billion in bad mortgages …
- Wells Fargo Bank (SD) has $68.6 billion, and …
- Bank of America (NC) has $74.9 billion.
Fact #4. The potential impact of these bad mortgages on the bank’s earnings, capital — AND SOLVENCY — is dramatic. Compared to their “Tier 1″ capital …
- SunTrust (GA) has 57.6 percent in bad mortgages …
- Bank of America has 66 percent in bad mortgages …
- JPMorgan Chase has 66.8 percent, and …
- Wells Fargo has 75.4 percent.
Tier 1 capital does not include their loan loss reserves. But even if you included them, the exposure is still huge.
Moreover, this data is based on the banks’ midyear reports. Since then, we believe the situation has gotten worse.
And these numbers reflect strictly bad home mortgages! It does not include bad commercial mortgages, credit cards, construction loans, business loans, and more.
Here’s the key: Based on their size alone, we KNOW that none of these giant institutions are on the FDIC’s list of “problem banks.”
Yet they are all definitely WEAK, according to our Weiss Ratings subsidiary, the source of this analysis on bad mortgages.
Moreover, “weak” means “VULNERABLE,” according to the analysis of the Weiss ratings provided by the U.S. Government Accountability Office.
To help make sure your money is safe, I have four recommendations:
Recommendation #1. Don’t keep 100 percent of your savings in banks. Also seriously consider Treasury bills — bought through a Treasury-only money market fund or directly from the Treasury Department.
Don’t be put off by their low yield. The primary goal of this portion of your portfolio should not be the return on your money. It’s the return OF your money. (Roger here: You could also use Fixed Indexed Annuities with higher yield potential with no risk of loss.)
Recommendation #2. The only real risk in holding U.S. Treasury bills is the likelihood of a falling U.S. dollar. But don’t let that alone prompt you to run away from safe investments and rush into high-risk investments. Instead, stick with safety and protect yourself from a dollar decline SEPARATELY, with hedges against inflation, such as gold.
Recommendation #3. For checking accounts, money market accounts, and CDs that you have in a bank, be sure to keep your principal and accrued interest under the FDIC’s insurance limit of $250,000.
Recommendation #4. Given the magnitude of the potential crisis … given the limited resources of the FDIC … and in light of the strong anti-bailout sentiment of the new Congressional leadership … I feel you must not count exclusively on the FDIC or any government entity to guarantee your savings.
Instead, make sure you do business strictly with financial institutions that have what it takes to withstand adverse conditions on their own, even without a penny of government support.
Do your best to avoid banks with a Weiss rating of D+ (weak) or lower and seek to do business with banks that we rate B+ (good) or higher. Stay safe. ]
I truly hope you found this information as eye opening as I did. Ok, as Promised here’s your link to the Click——> List Of Trouble Banks. <—–Click
To YOUR Safe Savings,
Roger Ely
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