Evidence of the US Banking System Teetering on the Brink of Collapse

[CarmelHP]

Originally Posted by ryanmercer

I wouldn't mind seeing it collapse though... sure things would be real rough, but hey I"m prepared.

I don't think you have any concept of what life would be like. It may sound romantic, but it would be ugly.

[Kirk Freeman]

Very ugly.

So, if a restaurant fails then it is it evidence of the American restaurant system collapsing?

The problem is that not enough banks are failing and that the country is privatizing profit and socializing losses.

[Justus]

Originally Posted by CarmelHP

I don't think you have any concept of what life would be like. It may sound romantic, but it would be ugly.

+1

there's nothing romantic about a collapse.
We can only imagine how bad it would be.
Zimbabwe is going thru an economic collapse right now.

[ryanmercer]

Originally Posted by CarmelHP

I don't think you have any concept of what life would be like. It may sound romantic, but it would be ugly.

Um, I spent 6 months living at a commune, where everything was grown... bunking with a bunch of other people... I know EXACTLY what life would be like.

[flagtag]

Originally Posted by ryanmercer

Yeah but I don't see it on the brink of collapse... yes it is bad, yes things need to be immediately done... and the banks are... a lot of people have noticed credit limit reductions down to their current balance or within a few hundred dollars on LOTS of lines of credit (lots of talk about it on CreditBoards (Powered by Invision Power Board) a really good forum, and site) as well as other things. It really needs to be on EVERYONE though. We've got 20 something year olds out there with credit limits close to a quarter of a million dollars... that are making 25-30k a year.

I wouldn't mind seeing it collapse though... sure things would be real rough, but hey I"m prepared. I've got my food supply, my guns, and my ammunition... only thing I don't have is a water supply (well), but I know places I could go where an extra trigger finger and work-hand would be welcomed that do have water supplies.

Sometimes it IS best - if a house is so delapidated - to tear it down and rebuild. Start anew, clean up, move on.

[SavageEagle]

Yes, I can imagine just how bad the collapse would be. LA Riots all over the Nation. Famine. Corporations leave the Country to make a bigger profit overseas. A security breakdown worse than 9/11. Governmental collapse because the people lose faith, money runs out, revolt, etc. It could be real bad. We could what-if all day long, but maybe a collapse is just what this corrupt system needs. There's no way we can fix this without it costing those who had no hand in making this happen. I don't have stocks, bonds, loans(beside a student loan), etc. I didn't buy a house or car under a bad loan. Why should I help bail these corrupt bankers out? How about the Millions of other Americans that had no hand in this? Why should we all suffer because of the greed of a few? Yes I feel bad for those middle class who lose out but they should have read the fine print. You don't sign nothing unless you understand EVERYTHING you are getting into. Simple as that. Heaven forbid worst case scenarios happen(riots, governmental collapse), but no amount of government interferance is going to stop this. The banks themselves can only delay the inevitable. These banks are going to go under. People are going to go to jail. It will happen. Mark my words.

[SavageEagle]

**** this whole Country needs a good kick in the rear and a fresh start to boot. There are too many corrupt people running this Country, too many loopholes, too many different people doing the same jobs in government, just so much crap this Country has to put up with that we shouldn't have to. We are so afraid to upset a certain group that we bend over backward not to, only to offend everyone else. When will it end? When will the Country stand up and say enough is enough...

[flagtag]

Originally Posted by SavageEagle

**** this whole Country needs a good kick in the rear and a fresh start to boot. There are too many corrupt people running this Country, too many loopholes, too many different people doing the same jobs in government, just so much crap this Country has to put up with that we shouldn't have to. We are so afraid to upset a certain group that we bend over backward not to, only to offend everyone else. When will it end? When will the Country stand up and say enough is enough...

[raiven]

Hundreds of banks will fail, Roubini tells Barron's

Sun Aug 3, 2008 3:52pm EDT
















NEW YORK, Aug 3 (Reuters) - The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron's in Sunday's edition.
Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Roubini said -- at least $1 trillion and more likely $2 trillion.
The banks will become insolvent because of mounting losses as a result of the housing bust and because they have only written down their subprime loans so far, he said. Still in front of them are their consumer-credit losses, for which they lack the reserves, Barron's reported.
He also said there are hundreds of millions of dollars outstanding in home-equity loans that could be worth zero, too.
U.S. consumers, meanwhile, are "shopped out" and saving less, while the Federal Reserve's performance in handling the crisis has been poor, Roubini said, because it failed to see that the problem extended beyond subprime mortgage debt.
Now, Roubini told Barron's, the government is overregulating, bailing out troubled participants and intervening in every market.
"The regulators should investigate themselves for bailing out Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the creditors of Bear Stearns and the financial system with new lending facilities. They have swapped U.S. Treasury bonds for toxic securities," he told Barron's. "It is privatizing the gains and profits, and socializing the losses as usual. This is socialism for Wall Street and the rich."
He said that sometimes it is necessary to use public money to rescue institutions, but in a way that does not bail out the people who made the mistakes. "In each one of these episodes, the government bailed out the shareholders, the bondholders, and to some degree, management," Roubini told Barron's.
As for the banks that will go bankrupt, they will include community banks that finance homes, stores, downtown areas, commercial real estate and other mainstays of U.S. towns and cities, Roubini said. Continued...
Hundreds of banks will fail, Roubini tells Barron's | Markets | Bonds News | Reuters

[raiven]

Columbian Bank and Trust of Kansas Closed by U.S. Regulators

By Alison Vekshin and Ari Levy
Aug. 23 (Bloomberg) -- Columbian Bank and Trust Co. of Topeka, Kansas, was closed by U.S. regulators, the nation's ninth bank to collapse this year amid bad real-estate loans and writedowns stemming from a drop in home prices.
The bank, with $752 million in assets and $622 million in total deposits, was shuttered by the Kansas state bank commissioner's office and the Federal Deposit Insurance Corp., the FDIC said yesterday in a statement.
Citizens Bank and Trust will assume the failed bank's insured deposits. Columbian Bank's nine branches will open Aug. 25 as Citizens Bank and Trust offices, the FDIC said. Customers can access their accounts over the weekend by writing checks or using ATM or debit cards.
``There is no need for customers to change their banking relationship to retain their deposit insurance coverage,'' the FDIC said.
The pace of bank closings is accelerating as financial firms have reported more than $500 billion in writedowns and credit losses since 2007. The FDIC's ``problem'' bank list grew by 18 percent in the first quarter from the fourth, to 90 banks with combined assets of $26.3 billion.
Prior to yesterday, the FDIC had closed 36 banks since October 2000, according to a list at fdic.gov. The U.S. shut 12 banks in 2002, the highest in the period, and 2005 and 2006 had no closures.
U.S. bank regulators closed Florida's First Priority Bank on Aug. 1; Reno-based First National Bank of Nevada, Newport Beach, California-based First Heritage Bank, and Pasadena-based IndyMac Bancorp Inc. in July; Staples, Minnesota-based First Integrity Bank and ANB Financial in Bentonville, Arkansas, in May; Hume Bank in Hume, Missouri, in March; and Douglass National Bank in Kansas City, Missouri, in January.
To contact the reporters on this story: Alison Vekshin in Washington at avekshin@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net.
Last Updated: August 23, 2008 00:01 EDT
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