Yes banks have got trouble- big, big trouble: [Thanks L!]
WASHINGTON (AP) — U.S. banking industry profits plunged by 86 percent in the second quarter and the number of troubled banks jumped to the highest level in about five years, as slumps in the housing and credit markets continued.
Federal Deposit Insurance Corp. data released Tuesday show federally-insured banks and savings institutions earned $5 billion in the April-June period, down from $36.8 billion a year earlier. The roughly 8,500 banks and thrifts also set aside a record $50.2 billion to cover losses from soured mortgages and other loans in the second quarter.
The FDIC said 117 banks and thrifts were considered to be in trouble in the second quarter, up from 90 in the prior quarter and the biggest tally since mid-2003.
And this won’t be the end. According to Sheila Bair, FDIC Chairman:
"More banks will come on the (troubled) list as credit problems worsen."
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And this won’t be the end. According to Sheila Bair, FDIC Chairman…..you can BANK on it!
Pour me another tequila, Sheila …
“FDIC says IndyMac failure costlier than expected”, by Karey Wutkowski, Reuters, August 26, 2008.
calc.exe tells me that’s about a 14 percent drop in 3 months. Won’t take too many more like that and we’re hosed.
With Alt-A loans just starting to reset I wonder how bad it’s going to get. That 8.9 billion cost to the FDIC for IndyMac may seem rather paultry in a year or two.
What ever happened to a “Soft Landing?”