416 Banks In Trouble; Oh My!
I’ve talked this year about banks that have closed. One would hope that, as the stock market is improving and the government got into it that things would start getting better for most banks. However, it was reported today that 416 banks are in financial trouble; how scared are you?
Well, it sounds weird to say this, but the industry overall recorded a loss of only $3.7 billion dollars (yeah, “only”, like it’s pocket change to me), which is the largest quarterly bank loss in history. That figure is amplified, though, when you consider that it’s really an average figure, and the figure for banks that are in trouble is around $300 billion. The Federal Deposit Insurance Corp indicated that 1 in 4 banks are in serious financial difficulties, so if you’re doing the math, that means there’s around 1,650 registered banks in the country, and if 75% of the banks can’t produce a profit against 25%, that means those banks really are in major trouble.
At this point we’re 81 banks down, with only 19 to go to hit that magic 100 mark we’ve been debating about. For all of 2008 only 25 banks failed. It’s no wonder the deficit is so high, and growing; this economy isn’t anywhere close to recovering, improving stock market or not. And this doesn’t bode well for the rest of 2009.