The Way of All Banks 6

FDIC-bank-closings Seven more banks have shut their doors. And they’re from all over the country: Alabama, Georgia, Minnesota, Utah, and Ohio. That’s 37 closed banks for the year.

This new wave of closures will cost the FDIC $419.3 million for just the Georgia banks. The other closures will cost less, though. Just around $232.6 million per bank. Just small change in the bucket, I suppose.

We’re on a bad path this year. Last year was of course a horrible year for banks. So many banks closed I had to start keeping my money buried in the yard. Sure, the interest rate isn’t great, but you can’t beat the security. And, of course, no ATM fees.

But this year I thought, hey, why not give the bank another try. I mean, things seem to be stabilizing. Interest rates are leveling off. And c’mon, banks will probably do everything they can to keep customers happy, right?

Well, it seems some banks just couldn’t cut it. These latest closures are hopefully the last of the worst of last year. But maybe they’re just the tip of the iceberg.

Only time will tell, but we’ve got to keep an eye out for the warning signs. If Washington needs to keep bailing out your local bank, what’s that going to do to the struggling recovery?

Share your thoughts on my blog. We all need to stick together on this one.

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6 thoughts on “The Way of All Banks

  • kryzs

    I think as history has shown. If a business is making bad investments and has to be closed , then close it. Other men and women can start new banks. Stronger banks. No different then the auto industry. There is no longer a Nash, AMC, Oldsmobile ,Pontiac, and so on. You don't need to save them. You put them out of business and let a whole different group start new ones. You take all the old licenced bank president and so on. And ban them from ever working in that business. And you would see stronger banks with better ideas.

  • yankeespringer

    I certainly hope for recovery… however, it is the same for a corporation or an industry to admit they have a problem much the same as it is for an individual with substance abuse or behavioral problems: You have to admit to yourself you have a problem and take the steps to a healing process. Banks found themselves in this dilemma because of a number of “behavioral” problems. Greediness in approving loans they shouldn't have, incorrect speculation of market values, etc…. but now, even though they are being given the opportunity to liquidate these properties through short sales and the sales of REOs, but will not be forthcoming with negotiations on offers for fear of “tipping their hand”…. I've heard of many times that offers being less than $500 from what they would sell it for, but will not convey that to the prospective purchaser. It's high time they realize they don't have the luxury of fooling around and cut to the chase so they may get these cases off of their books to improve their standings with the government….

  • TKB

    Banks are having issues, closing and letting “us” bail them out. Isn't it time for the banks to stop F'ing around with the properties they have already taken back and sell them to the investors that can help revitalize the housing market?? What can we do to get the REO's the banks are holding back??

  • Obrien69

    I think all the Short Sale and Foreclosure Investors should get together as a unified group and buy all the homes in default. Then use the profits to take over failing Bank so people can keep their credit and the Banks won't be stressing exiting Banks. when a Bank takes over a failing bank it makes that Bank unstable for a period which can cause more problems.
    We have the solution but who is going to take the lead, Short Sales help the economy but someone needs to get past the point of not thinking big enough.

    As a group we could buy them all and sure the profit like maybe 5 or 10% of each deal to help fix the financial situation of America

  • Hector Aguilar

    Banks seem to be getting bailed out daily, here's a thought, help bail out homeowners with strong mortgage balance reductions and maybe the homeowners will start making their payments to the banks so that the banks can stay in business! Its seems trivial but they view it as rocket sience!

  • Henry Brooks

    The writing is on the wall. The government will be forced to create a new type of money system soon. Right now a dollar is worth about 30 cents. If 37 US banks went out of business in one year, then very soon all the US banks will shut their doors; money will soon be thrown on the streets. It will be worthless. Read National Sunday Law by the Pacific Instit ute. The US needs every available dollar to pay for the the very expensive two wars the US is fighting simultaneously (The wars in Iraq and Afganistan). Soon there will be war against Iran. If the US and Israel try to fight the war in Iran by themselves the US will become bankrupt. Read Secret Terroists by Bob Hughes, Enemy Unmasked by Bob Hughes, Vatican Assasins, Amazing Facts. One can google search all of the aforesaid.