Good afternoon
I thought I would bring this to every ones attention. The FDIC just announced that ANB Financial just failed. They had over $2 billion in assets. Here is the link to the FDIC:
"On May 9, 2008, ANB Financial, NA, Bentonville, AR was closed by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should help answer many of your questions."
Quick Take:
This was a small one but none the less its noteworthy. Expect this to be the first of many. AND Financial was about 75% invested in real estate by the way. Anyone in a bubble area that has an account with a local smaller bank needs to be aware that this type of stuff is going on and will continue to happen.
As a reminder, the FDIC will only guarantee $100,000 for any one account. If you have more then this in any one deposit account then you need to take action immediately. Spread out your money into different banks and keep each account under 100k so you are fully protected.
Prime Loans:
This is another piece of information I picked up today on prime loan delinquencies:
:The first concrete evidence that delinquencies on mortgage bills have spread well beyond those with subpar credit shows that even prime borrowers have increasingly fallen behind on their house payments.
The figures remain relatively small so far. But if they rise further, delinquencies on prime loans — given only to those with good credit — could prolong the housing crisis.
About 2.3% of prime loans were 60 days' past due in February, the highest level in at least a decade, according to data from FirstAmerican CoreLogic LoanPerformance. That's up from 1.4% a year ago."
Still, even among prime borrowers, not just delinquencies but also foreclosures are up. From the fourth quarter of 2006 to the fourth quarter of 2007, the rate of foreclosure filings for prime adjustable-rate mortgages rose from 0.41% to 1.06%, the Mortgage Bankers Association says. The rate of foreclosure filings for prime fixed loans rose from 0.16% to 0.22%."
YIKES
If this starts to get out of hand then all hell is going to break loose in the financial markets. Foreclosures have doubled on adjustable primes, and late payments are up significantly for prime loans in general. These rates are still relatively low but jeez oh man this could be bad.
You think maybe people got into homes they can't afford? Wow, I am shocked(not).
2 comments:
Jeff, a contrarian financial blogger read the original language from the 1933 government documents guarantying we will get all our money back (up to $100k) from an FDIC-insured bank in the event of a bank failure. And wouldn’t ya know it; he reports the official language does not say exactly what we had all been told all this time. But it seems we’re still likely to get more from the FDIC-guarantee (via insurance) than we ‘under-50s’ will get from social security. Is it because the FDIC has only $50 billion in its insurance fund as of early April 2008? Compare that to the $29 billion guarantee the Federal Reserve gave JP Morgan for parts of Bear Stearns. Unfortunately, that measly $50 billion is not the end of the story about the FDIC insurance. Here’s the good news: all it will take to ‘fix the FDIC-insurance’ are some new laws from Congress and new rules from the Treasury Dept. to “make us whole”. Oh, and any multiple massive bank runs need to occur while nothing is upsetting global markets or pressuring lending rates. Hmmmm… massive multiple bank runs that don’t involve upsets to global financial markets...what are the odds?
To learn more of what the FDIC can do with their $50 billion reserve for insurance pay-outs, read Michael Panzer's tax day blog from 4/15:
http://www.financialarmageddon.com/
April 15, 2008 Safe as Houses?
avl
Very well said. I have heard rumors that not even the FDIC is safe! However, I don't want to wear a tin foil hat.
I don't want financial armegeddon. I just want the financial system to reset and take the losses.
I hate the situation we are in yet I need to invest accordingly.
I want a bull market! Only when it makes sense
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