Start A Petition

Fear Grows as Bank Failures Multiply in U.S.

Business  (tags: George W. Bush, neil Bush, George H. W. Bush, banks, credit risk, housing foreclosures, economy, declining dollar, PNAC, Repubilcans, real estate, Fannie Mae, Freddie Mac, Greenspan, Bernanke )

- 3718 days ago -
The fear of seeing a series of regional commercial banks default even made Wall Street panic . . . does everyone remember the last Bu$h bank robbery: Silverado ... it was the greatest bank robbery in history but the Bu$h family wasn't satisfied ...


We hate spam. We do not sell or share the email addresses you provide.


Blue Bunting (855)
Thursday July 17, 2008, 1:28 pm
If the Bush administration made emergency contact with two of the largest American specialists in real estate credit, Fannie Mae and Freddie Mac, it did not truly restore confidence in the banking system. In California, hundreds of clients crowded into IndyMac Bancorp agencies on Monday, July 14, in order to withdraw their assets, despite the fact that the banking institution was picked up by federal authorities on Saturday, July 12, to avoid bankruptcy. These authorities maintained that depositors’ money was safe, but clients could not withdraw more than $100,000 per person.

The fear of seeing a series of regional commercial banks default even made Wall Street panic on Monday. Standard and Poor’s credit rating left bank values at around 10%. According to the most pessimistic estimates, 100 to 150 regional banks could shut their doors within twelve to eighteen months.

If large establishments like Citigroup and Merrill Lynch are not threatened because their failure would create a risk for the entire system, many regional banks seem to be in the hot seat. The most active on the mortgage market are confronted with more payment defaults by individuals and promoters, thus finding themselves guaranteeing assets whose value continue to decrease.

Among the institutions that are struggling are National City, Sun Trust Bank, M&T Bank Corp, First Horizon National…and even national networks like Washington Mutual, the foremost savings bank in the country, and Wachovia.

Washington Mutual stock fell on Monday, dropping 34% - or 93% since the beginning of the year. In a statement, the bank reassured that it was “well capitalized,” after a recent increase of capital that allowed them to meet their commitments. Cleveland’s National City stock, the biggest bank in Ohio, fell to just 28% on Monday on Wall Street.

New Depreciations to Come

“The majority of banks are not in danger and are solid,” stated Sheila Bair, president of the FDIC on Monday, on the television channel CNBC. But analysts pointed out that IndyMac did not even appear in the governmental list of 90 banks having problems published on March 31, 2008.

The situation is not yet comparable to the one at the end of the 1980s; in the aftermath, a real estate crisis, American authorities had to bail out around one thousand financial institutions, notably the savings bank network. The American banking system, however, seems to be more and more fragile. It has registered losses of more than 300 billion dollars since the beginning of the real estate subprime credit crisis. And new stock depreciations should be announced when the results of the second quarter are published later this week.

On the investment bank side, Lehman Brothers are the subject of true default. After a new decrease on Monday of more than 14%, the stock fell to its lowest level since the introduction of the group into the stock exchange in May 1994.
Or, log in with your
Facebook account:
Please add your comment: (plain text only please. Allowable HTML: <a>)

Track Comments: Notify me with a personal message when other people comment on this story

Loading Noted By...Please Wait


butterfly credits on the news network

  • credits for vetting a newly submitted story
  • credits for vetting any other story
  • credits for leaving a comment
learn more

Most Active Today in Business

Content and comments expressed here are the opinions of Care2 users and not necessarily that of or its affiliates.

New to Care2? Start Here.