Akkam’s Razor

In an April 2008 post titled “Which one’s are the bad banks, anyway?”, I noted that the secretive FDIC list included some 76 institutions.  The list is currently at 171.  While both of those numbers are less than the total number of bank failures during the Great Depression and the Savings and Loan Crisis, the amount of money in play makes the case as to why this situation is comparable if not worse.

Totally anecdotal - take rumored lists via SEC filings of stores closing retail locations (almost all are either internal mall stores or larger anchors) and the list of FDIC compliance-related job postings.  The retailers who won’t be closing are drastically scaling back their plans for expansion.

For many municipalities, these malls serve as their civic center, job engines, and sources of tax revenue.  Dead malls and empty big boxes may soon litter the landscape.  The financing of these projects is usually done through regional banks.

Where to begin? For starters, Dear Leader provides proof positive of exactly how bad things are, reiterating that “we have nothing to fear but fear itself“. The comments are not very Presidential and are sure to shake the confidence of both the American people, institutions, and our global partners.

Bush’s dire words will have consequences. For starters, there’s this little bit of great news from China [Reuters] followed by a swift reversal/denial [also Reuters]:

Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

• Joe Bageant: Moving to the Center of Elite Consensus - What voters are expected to believe is that after a 30-year class war against the bottom 90% of income earners, the source of their troubles are black rappers and inner city fathers and not criminality on Wall Street or a corrupt political system. The road to the White House over the past 30 years has been paved by pretending to believe the absurdity that the individuals who pull the levers of power over people's lives are named Willie Horton, Sister Souljah and Ludicrous, and not Robert Rubin, Phil Gramm and Hank Paulson.

It goes without saying that given the stream of news through this weekend through Monday (Fannie Mae, Fannie Mac, IndyMac, and National City), the most popular post on Akkam’s Razor is this one, detailing my findings in search for the FDIC’s bad bank list.

• Study Guides and Strategies
  (tags: learning education study productivity studying howto reference)
• Men Evolving Badly: Entertainment & Culture: vanityfair.com
  American manhood is in crisis, judging by a surge of manifestos such as The Decline of Men, The Disposable Male, and Save the Males. Performing his own culture check, from High Noon to The Simpsons, the author crashes the pity party.
  (tags: books culture essay)
• FDIC: Statistics at a Glance
  Statistics at a Glance provides the latest quarterly and historical data for FDIC-insured institutions, the BIF and SAIF insurance funds, and the number of FDIC employees beginning with the June 2001 issue.
  (tags: banking Statistics federal FDIC savings loan thrift mortgage subprime)

At the very bottom of recent stories announcing the need for expanded staffing at the FDIC by 60%, with an emphasis of recruiting S&L Crisis veterans (WSJ, subscription required), was a sentence stating the following:

There are 76 banks on the FDIC’s “problem institutions” list - which would equate to about 10 expected bank failures this year. About six banks fail per year on average, FDIC officials said.