Just as the AP lost interest in keeping a running count of the dead soldiers in Afghanistan, it looks like the dominant media no longer care about the number of banks being closed each Friday by the FDIC.<\/p>\n
The number being closed is down – more than likely because the FDIC has run out of money to close them.\u00a0\u00a0 Having forced the surviving banks to prepay their insurance premiums in advance, and burned through that money, the tools they have left to bail out failed banks are few.<\/p>\n
The 2010 financial reports are out:<\/p>\n
http:\/\/www.fdic.gov\/about\/strategic\/report\/2010annualreport\/AR10section4.pdf<\/a><\/p>\n The fund’s assets dropped from $110 billinon to $81 billion from 2009 to 2010.\u00a0\u00a0\u00a0 The net balance in the fund at the end of 2010, was -$7 billion.\u00a0\u00a0 ($30 billion is the prepaid assessments, another $30 billion is estimated to be needed for resolving banks already closed, another $17\u00a0billion is set aside for expected failures).\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n Total assessments in 2010 were $13 billion and $30 billion in prepaid assements for future years.\u00a0<\/p>\n The fund is supposed to keep a balance between 1.3 and 1.5% of the insured deposits – that ratio\u00a0stands at -0.12%\u00a0\u00a0\u00a0 Estimated insured deposits were $6.2 trillion, which means the minimum account balance to comply with the law requires the FDIC to maintain a net balance of\u00a0$80 billion.\u00a0\u00a0 They have developed a “plan” to get back in compliance by year 2020.<\/p>\n Even that is optimistic, as the FDIC has engaged in many “loss sharing” agreements whose total cost won’t be known for years – as the acquiring bank turn in the worthless loans it finds or when they default – and\u00a0the FDIC has to\u00a0reimburse the banks.\u00a0 How many assets are going to turn out to be worthless is highly speculative.<\/p>\n","protected":false},"excerpt":{"rendered":" Just as the AP lost interest in keeping a running count of the dead soldiers in Afghanistan, it looks like the dominant media no longer care about the number of banks being closed each Friday by the FDIC. The number … Continue reading