AIG Bailout
Well another financial institution in trouble another government bailout. AIG has asked for and will receive loans from Uncle Sam totaling billions of dollars. The Whitehouse is stating that this loan is to help strengthen the economy. Of course they never mention that all the money we’ve spent on the Iraq war and the unchecked speculation of gasoline has probably done more to put a strain on the economy than anything else. Perhaps if we would look at these items then the AIG bailout would not be needed.
The AIG bailout while probably important will probably not be the last financial institution to be in rouble this year. We have seen numerous banks fail this year resulting in Billions being paid out by the FDIC. The even have a website set up to answer people’s questions on the bank failures and the way the FDIC insures deposits. Many people are looking for myfdic.gov or myfdic.com for this website. Actually the FDIC site is just fdic.gov and there is a lot of information posted on fdic.gov about the FDIc. myfdic.gov will not produce the desired results.
This has been a pretty rough week for financial institutions. Lehman Brothers, Merrill Lynch and now AIG. These bailouts and failures are really a cause for concern. What is next are we looking at the failure of our entire banking system. Are we looking at another Great Depression? Who knows but the news coming off Wall street just seems to be getting worse and worse.
We need another renewable energy source now, but since we do not have the infrastructure or technology for something to replace gasoline then we must do all we can to ensure the price of gasoline is lower. All our economy is driven by the price of fuel and if we want to advert this disaster then we have to lower the price people have to pay for gas. Otherwise expect to see more of these AIG bailout actions in the near future.
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Is Wachovia one of the troubled banks
The FDIC has about 90 banks on its troubled bank list and some analysts are wondering if Wachovia is one of the troubled banks. According to a blog post written earlier at Online Loans FAQ, Wachovia may be announcing news that Wachovia may be shutting down its Wachovia Wholesale mortgage division at the end of August. I have not found an official press release form Wachovia yet, but if this is true then its possible that the banking crisis and fears surrounding the potential of more banks to fail may not be behind us.
Last week the banking calculation also known as the Texas Ratio raised eyes when many analyst suggested that more banks are going to fail in the U.S. over the next year.
We will be looking for additional information on this potential Wachovia announcement and try to find out exactly what it means for the Wachovia employees and customers throughout the country. According to the source many employees could be out of a job as a result of Wachovia layoffs.
Wachovia is a well known brand in the banking industry and if it proves to be in trouble then that could put additional pressure on the other banks. The government has not really done anything to help this crisis. Banks are in trouble because people can’t pay their loan payments, People can’t pay their loan payments because of the high cost of consumables such as food and gas. If the congress would get off their but and actually announce some plans to start drilling for oil in US waters.
Banks at Risk Of Failure
Is your Bank at Risk of Failure? This is what is on everyone’s minds now that the banking industry is looking really shakey. The FDIC has stated it has 90 banks on its list of troubled banks and just this past week the failure of the Indymac bank has caused an uproar and many people are feeling fear. The truth is banks do fail, but not that often. Just 28 banks have failed since 2000, but those where different times than the environment today. I’m sure people who had money in those 28 banks would not say only 28 banks, but the economists don’t worry about a few banks out of over 8000, so its has not been that big of news until now. The mainstream are now looking at whether their bank may be at risk. Its not like the FDIC is going to tell you that your bank is about to fail. If it does you will just drive by your bank and see the closed sign on it. Or you could hear about your bank failure from the television. Concerns about liquidity in the banking system have raised the possibility that there will be an increase in bank failures in the next year or so. This is not good news.
The credit meltdown that has been increasing since the summer has depleted capital levels, and banks are getting stuck with mortgage-related assets. Which creates the chance that more banks will fail. Regulators have been fretting about the problem since early this year.
"Some have come to believe that the FDIC should not spend any time worrying about or planning for a large bank failure because these banks have become so well diversified and sophisticated in their risk management," said FDIC Chairman Sheila Bair in a speech to the Exchequer Club in Washington, D.C., in March. But, she added, "it does not mean we can rule out potential problems."
Banks fail because they either run out of capital to support their ongoing operations, their asset values drop below that of their liabilities, or fraud forces regulators to step in and take over. Most bank failures are of small institutions. There have been just two failed banks with more than $1 billion of assets since 2000. But just because a bank is big does not mean it can not fail. Indymac was a pretty big bank and it failed. Larger banks have more resources and are able to diversify more than smaller banks, but with the number of mortgage defaults rising along with the increasing prices in all areas of thee conomy, then more and mroe people are not able to pay their bills. This issue with the Banks at Risk is going to probably get worse before it gets better. Wall street is coming under increasing pressure and with each falling day, more liquidity is drained from the economy.
If your bank is failing, you probably won’t know about it. Regulators deliberately keep a pending closure secret to avoid a mad rush to remove deposits–a run on the bank, if you will. For one thing, a sale of the institution is often possible at the last minute, eliminating the need for federal intervention. But a buyer isn’t going to take on the deal if all the deposits rush out the door. For many customers, the first time they know their bank has been shut down is when their credit card gets declined or they walk to their branch and notice it’s closed.