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| User Info | WSJ: FDIC Readies for a Rise in Bank Failures in forum [NotSoBreaking] | |||
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Daizepitt Posts: 1829 Incept: 2007-10-07 
Orange County, CA 
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FDIC Readies for a Rise in Bank Failures By DAMIAN PALETTA February 26, 2008 WASHINGTON -- The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen. The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis. • Out of Retirement: The FDIC is recruiting 25 of its retirees experienced in handling insolvent financial institutions. • The Reasoning: The agency is preparing for an increase in failed financial institutions as the housing and credit markets worsen. • What's Next: The FDIC will give an update today on the number of "problem" institutions that regulators are watching most closely.FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas. The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement. Behind the Scenes In public, policy makers are debating what role the government should play in trying to stabilize the housing market and minimize foreclosures. Meanwhile, regulators have worked discreetly behind the scenes to closely monitor the growing number of troubled banks and thrifts considered at risk. "Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group. In job postings on its Web site, the FDIC said it is looking for people with "skill in performing duties associated with a financial-institution closing, such as receivership management, resolutions and/or asset disposition; knowledge of the resolutions process as it relates to complex financial institutions." Such positions would require "very frequent overnight travel," the posting said, and would pay up to $180,770. "The notion of bringing back some people who have been through it before is very smart," said William Isaac, who was FDIC chairman from 1981 until 1985. All told, the FDIC has roughly 4,600 employees, far fewer than the about 15,000 it had as recently as 1992. On Sunday, the FDIC ran a newspaper ad seeking companies that could service commercial loans, mortgages and student loans in the event of a bank failure. It didn't say how much a company could earn in this area. The FDIC rated 65 banks and thrifts as "problem" institutions at the end of the third quarter of 2007, up from 47 institutions a year earlier. Both figures are low by historical standards. At the end of 1993, there were 572 "problem" banks and thrifts. The FDIC is expected to update its data on "problem" institutions today. Before the housing market soured, the banking industry was enjoying one of its most profitable stretches in U.S. history. There wasn't a single bank failure from July 2005 through January 2007, an unprecedented span. There have only been four bank failures in the past 12 months, a rate the FDIC has easily been able to handle. Weakening Performance In many parts of the country, the housing-market decline has hamstrung banks, and regulators have reported weakening performance of commercial real estate, small business and credit-card loans. Exacerbating the situation is a cash-flow crunch, which makes it harder for banks to obtain funding to originate new loans. FDIC Chairman Sheila Bair, Comptroller of the Currency John Dugan and Office of Thrift Supervision Director John Reich have warned of a pickup in bank failures. Last week, Mr. Reich reported that the thrift industry lost a record $5.2 billion in the fourth quarter. The FDIC was created by Congress in the 1930s after a series of bank runs during the Great Depression. At the end of 2007, it had $52.4 billion in its fund that backstops the nation's insured deposits. One major difference between now and the savings-and-loan crisis is that most banks today are well-capitalized, giving them a cushion against unexpected losses. Still, banks could burn through their capital if they ran into trouble. Write to Damian Paletta at damian.paletta@dowjones.com http://online.wsj.com/article/SB12039860.... 2008-02-25 19:55:32
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Leraconteur Posts: 7189 Incept: 2007-12-03 
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First reported by FFDIC at Mish's blog in November.
2008-02-25 19:57:59
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Daizepitt Posts: 1829 Incept: 2007-10-07
Orange County, CA
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Interesting Lera, do you have a link to that one? How much longer if they are hiring retired people with a ton of experience? 2008-02-25 20:00:40
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Dogfarm Posts: 1211 Incept: 2007-11-29
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dude, those old farts are going to be in for a steep learning curve. this is "new school" financial **** hitting the fan....none of this "old school" S&L stuff. 2008-02-25 20:16:44
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Pikachu Posts: 4862 Incept: 2007-08-24
Down under
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i can confirm lera's comment, I remember reading that too on CR
2008-02-25 20:17:38
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Daizepitt Posts: 1829 Incept: 2007-10-07
Orange County, CA
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I don't doubt it, just would love to read it, could add color on this msm fluff
2008-02-25 20:21:14
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Big_bear Posts: 2208 Incept: 2007-08-29
Florida
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****-storm cometh ... From FDIC annual report : Quote:As of December 31, 2007, there ---------- Bull Market – a random market movement which causes the average investor to mistake himself for a financial genius. Bear Market – a six to eighteen month period during which the kids get no allowance, the wife gets no jewelry and the husband gets no sex. Last modified:
2008-02-25 20:28:19 by big_bear
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Mo Posts: 5043 Incept: 2007-06-26
Florida Online
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Maybe this is the reason the whole 'Monoline bailout' BS is being floated as real. They need time to get ready. If they let the monolines expire as they should, TSWHTF immediately. 2008-02-25 20:28:34
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Daizepitt Posts: 1829 Incept: 2007-10-07
Orange County, CA
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Mo, you are onto it. This **** is being peddled because there is a toxic waste dump the size of texas behind it
2008-02-25 20:32:25
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Tm22721 Posts: 422 Incept: 2008-01-09
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Remember this is the Feds we're talking about the heroes of Katrina fame...
---------- Joe Terranova: "I'm long Amazon...once it goes above 90 it gets to 100...it's that old 9-10 thing. Once you get above the 9 it always goes to 10." Tim Seymour: "Once it gets to the 8 it goes to the 7 and then the 6..." 2008-02-25 20:43:51
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Coolhandluke Posts: 5269 Incept: 2007-12-19
Out of the box
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Another thing to keep in mind. The FDIC does not announce when it takes action. Yes there may be signs it's coming, but unless you are watching a particular bank you won't see it until it is over. One day netbank is online, the next day the FDIC has turned them over to ING. It is their policy to NOT stir up a public panic. ---------- I gave up on our government several months ago..... 2008-02-26 00:48:23
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Pika-steph Posts: 37242 Incept: 2007-09-11
^Why I keep^ fighting; so he is not fighting for nothing. Online
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Lera That is the FIRST thing I thought of when I read this. We all heard about this back when FFDIC reported they were hiring a bunch of people. I believe he/she was referring to more of the 'grunt' people, as the reference was to over 100 people - I think the 25 people they are talking about here are for management purposes. Well, now we have it - it's 'official' now, apparently. Anyone know if FFDIC has posted anything else lately? ---------- Stop the Looting; Start Prosecuting - http://www.FedUpUSA.org  "America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards." 2008-02-26 00:50:57
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Financeguy Posts: 4720 Incept: 2007-08-10
Charlotte
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I just read today that small and mid-size banks don't really have access to additional capital. It is going to be game over soon for some of them. I believe FFDIC (on CR blog) has said that the FDIC is ready for about four failures per month during the rest of the year. I think that will prove to be optomistic for what it is worth.
---------- "Granted, if you are not into Barbara Streisand and creme brulee, South Beach could be a tad lonely." Eleua 2008-02-26 00:52:34
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Lakeshorelady Posts: 5191 Incept: 2007-08-17
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Quote:"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group. Awhile ago I suggested some may want to take a look at Hunington ( HBAN on the Nasdaq). They did A LOT of community mortgages and other types in both MI and OH (oh ****) and let's just say those mortgages are not performing well at all. They have also made some VERY poor business decisions with management and mergers. She has a 52 week range of 23 to 10, at 13 now (another good entry if you have followed her) IMHO, this is a short to zero. I noticed how this article talked about needing people to deal with mortgages also, Huntington services all of her loans. Would not surprise me a bit if the FDIC is in the parking lot. Take a look, you might see a dying pig here Last modified:
2008-02-26 01:02:57 by lakeshorelady
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Lakeshorelady Posts: 5191 Incept: 2007-08-17
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HBAN doesn't get a lot of commentary but this guy has credibility per most circles "Chren (senior director of large-cap value investing for Allegiant Asset Management) put a sell on Huntington Bancshares (HBAN) "this bank has big problems and sub-prime loans on it books. 2008-02-26 01:09:55
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Lumpeninvestor Posts: 818 Incept: 2007-10-16
98072, USSA Online
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Pika. FFDIC has posted a comment recently (today!): http://www.haloscan.com/comments/calcula.... read further comments below this one. 2008-02-26 01:14:52
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Genesis Posts: 66463 Incept: 2007-06-26 
Royal Flush!
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Booooooooommmmm...
---------- I used to play flute; I wonder if I can play a fife? I incite prosecutors to create "Bubba Sausage Parking Lot" projects Darrell Issa has a middle finger and knows how to use it - Me 2008-02-26 01:16:01
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Fannymay Posts: 674 Incept: 2007-08-27
Florida
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Funny that MBI will stop writing guarantees on asset-backed securities for six months and will separate that business from its municipal unit within five years. Can they really drag this **** out that long? btw...thanks for the reminder on HBAN Lakeshore....I wonder if the FDIC publishes a list of the other 76? :-) I'm sure CORS is right at the top 2008-02-26 01:18:51
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Pika-steph Posts: 37242 Incept: 2007-09-11
^Why I keep^ fighting; so he is not fighting for nothing. Online
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Huh. I wonder if FFDIC knows he has 'groupies'? ---------- Stop the Looting; Start Prosecuting - http://www.FedUpUSA.org "America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards." Last modified:
2008-12-07 17:09:07 by pika-steph
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Realistic Posts: 2673 Incept: 2008-02-15
California
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The proof is in the pudding. https://jobs1.quickhire.com/scripts/fdic.... "Who May Apply: Open only to applications from FDIC CTAP or ICTAP eligibles from other agencies, along with permanent FDIC employees occupying CTOP Matrix surplus positions who are eligible for preferential consideration. This is a Temporary Position Not to Exceed 1 Year; may be extended for a maximum of 2 years. Job Summary: The FDIC intends to temporarily reemploy (for one year) up to 25 former employees with expertise in resolutions and receiverships to assist with potential workload and facilitate the training and coaching of new business line employees. Prior to reemploying any former employee for more than 120 days, regulations require that FDIC post the potential job opportunity on the chance that well-qualified displaced federal employees are available for the jobs, and provide them with the opportunity to be considered. **THERE IS NO NEED OR INTENTION TO HIRE AT EACH DUTY LOCATION LISTED.** The wide range of duty locations shown on the current announcement anticipates that former FDIC specialists may be living in a wide variety of locales. In order to save the agency the cost of relocation, we will assign the rehired employees to the FDIC duty location closest to their current homes. The announcement lists all potential duty locations to simply give the Corporation the full range of assignment possibilities. Key Requirements: * This position requires very frequent overnight travel. Position Information: Competitive service This temporary appointment is not-to-exceed one year following appointment. Major Duties: Incumbent will engage primarily in resolution and receivership activities of financial institutions commensurate with the assigned grade level. You may be assigned to any section within the Division of Resolutions and Receiverships to work on temporary assignments with other divisions of the FDIC. " ------------------------------------------------------------ 1 vacancy in Dallas, TX 1 vacancy in Birmingham, AL 1 vacancy in Montgomery, AL 1 vacancy in Pensacola, FL 1 vacancy in Gainesville, FL 1 vacancy in Tampa, FL 1 vacancy in Ft. Lauderdale metro [Sunrise], FL 1 vacancy in Atlanta, GA 1 vacancy in Albany, GA 1 vacancy in Jackson, MS 1 vacancy in Charlotte, NC 1 vacancy in Raleigh, NC 1 vacancy in Columbia, SC 1 vacancy in Knoxville, TN 1 vacancy in Nashville, TN 1 vacancy in Memphis, TN 1 vacancy in Richmond, VA 1 vacancy in Princeton, IL 1 vacancy in Chicago , IL 1 vacancy in Chicago metro [Elk Grove Village], IL 1 vacancy in Champaign-Urbana, IL 1 vacancy in Springfield, IL 1 vacancy in Indianapolis , IN 1 vacancy in Cedar Rapids metro [Hiawatha], IA 1 vacancy in Des Moines metro West , IA 1 vacancy in Sioux City, IA 1 vacancy in Wichita, KS 1 vacancy in Hays, KS 1 vacancy in Lexington, KY 1 vacancy in Hopkinsville, KY 1 vacancy in Elizabethtown, KY 1 vacancy in Detroit metro [Livonia], MI 1 vacancy in Grand Rapids, MI 1 vacancy in Minneapolis metro [New Hope], MN 1 vacancy in Columbia, MO 1 vacancy in St Louis , MO 1 vacancy in Kansas City , MO 1 vacancy in Springfield, MO 1 vacancy in Omaha , NE 1 vacancy in Grand Island Area, NE 1 vacancy in Grand Forks, ND 1 vacancy in Columbus metro [Gahanna], OH 1 vacancy in Sioux Falls , SD 1 vacancy in Charleston metro [Scott Depot], WV 1 vacancy in Milwaukee metro [Brookefield], WI 1 vacancy in Madison metro [Middleton], WI 1 vacancy in Phoenix, AZ 1 vacancy in Little Rock, AR 1 vacancy in Denver metro [Greenwood Village], CO 1 vacancy in Shreveport, LA 1 vacancy in Baton Rouge, LA 1 vacancy in Billings, MT 1 vacancy in Albuquerque , NM 1 vacancy in Oklahoma City, OK 1 vacancy in Tulsa, OK 1 vacancy in Lubbock, TX 1 vacancy in Austin, TX 1 vacancy in Houston, TX 1 vacancy in Hartford metro [Rocky Hill], CT 1 vacancy in Wilmington metro [Claymont], DE 1 vacancy in Boston metro [Braintree], MA 1 vacancy in Boston metro South [Foxboro], MA 1 vacancy in New York City, NY 1 vacancy in Syracuse, NY 1 vacancy in Philadelphia metro [Blue Bell], PA 1 vacancy in Harrisburg, PA 1 vacancy in Pittsburgh metro [Cranberry], PA 1 vacancy in Sacramento metro [Roseville], CA 1 vacancy in San Francisco, CA 1 vacancy in Los Angeles metro North [Monrovia], CA 1 vacancy in Orange County [Mission Viejo], CA 1 vacancy in Chicago metro [Downer's Grove], IL 1 vacancy in Washington, DC 1 vacancy in Middlesex County [Jamesburg], NJ 1 vacancy in Baltimore metro [Columbia], MD 1 vacancy in Boston metro North [Lexington], MA 1 vacancy in Concord metro [Pembroke], NH 1 vacancy in San Juan , PR 1 vacancy in Various Locations Throughout the United States, US 1 vacancy in Mankato, MN 1 vacancy in Rochester, MN 1 vacancy in Portland metro [Lake Oswego], OR 1 vacancy in Salt Lake City, UT 1 vacancy in Arlington, VA 1 vacancy in Seattle, WA 1 vacancy in Eau Claire, WI 1 vacancy in Los Angeles metro West [Culver City], CA 1 vacancy in Mt. Vernon, IL 1 vacancy in Fargo, ND 1 vacancy in Appleton, WI 1 vacancy in Springfield, MA That is 91 openings for a temporary position. You do the math. Want to know how many positions there CURRENTLY are. Division of Resolutions and Receiverships▼ Total 2007: 218 Total 2006: 231 Washington 2007: 56 Washington 2006: 57 Regional/Field 2007: 162 Regional/Field 2006: 174 So it's only a 41% increase in hiring, that is nothing! And if you consider the fact that all these vacancies are for the field, we are talking about a 56% increase in employment. http://www.fdic.gov/about/strategic/repo.... page 123. Do I get a gold star for this? ---------- "Insolvent Banks refusing to accept IOUs from an Insolvent State would be laughable if it weren't so damn pitiful." - LOL Damn... 9 percent plus unemployment, and ma bell being investigated... help I'm in the 80s! - Jeffrey_thomason Last modified:
2008-02-26 05:55:10 by realistic
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Realistic Posts: 2673 Incept: 2008-02-15
California
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moved to prior post to keep on same page.
---------- "Insolvent Banks refusing to accept IOUs from an Insolvent State would be laughable if it weren't so damn pitiful." - LOL Damn... 9 percent plus unemployment, and ma bell being investigated... help I'm in the 80s! - Jeffrey_thomason Last modified:
2008-02-26 04:58:21 by realistic
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Rubberchicken Posts: 813 Incept: 2007-08-29
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Quote:**THERE IS NO NEED OR INTENTION TO HIRE AT EACH DUTY LOCATION These appear to be the grunt positions, not management. ---------- Surely, THIS is the top... 2008-02-26 08:56:57
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Steviepointer Posts: 1134 Incept: 2007-07-30
WI
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"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months" .... "There have only been four bank failures in the past 12 months, a rate the FDIC has easily been able to handle." So, the FDIC getting to handle a average of 4/mo (which they used to do in a year). And their numbers are probably conservative. 2008-02-26 09:04:12
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Genesis Posts: 66463 Incept: 2007-06-26
Royal Flush!
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100 bank failures? That's not really that many, you know....
---------- I used to play flute; I wonder if I can play a fife? I incite prosecutors to create "Bubba Sausage Parking Lot" projects Darrell Issa has a middle finger and knows how to use it - Me 2008-02-26 09:05:28
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Steviepointer Posts: 1134 Incept: 2007-07-30
WI
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Gen: Don't know if you are being sarcastic or not, but in any case: In the past 10 years, 100 failures is a lot. However, compared to previous financial crisis, it's not. Here are 2 graphs from CR: 'recent' history http://bp2.blogger.com/_pMscxxELHEg/R5u8.... including GD http://bp1.blogger.com/_pMscxxELHEg/R5u-.... I just don't see us getting through this disaster with 100 failures/12-24mo. This current disaster dwarfs S&L crisis, both in absolute and relative terms. 2008-02-26 09:35:08
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