U.S. regulators seize two more banks, engineer sale

Reuters via Yahoo! News ^ | 2008-07-25 | John Poirier

[rabscuttle385]

By John Poirier

WASHINGTON (Reuters) - U.S. regulators took over two banks on Friday and sold them to Mutual of Omaha Bank, the sixth and seventh bank failures this year as financial institutions struggle with a housing bust and credit crunch.

ADVERTISEMENT Two weeks after the Federal Deposit Insurance Corp seized IndyMac Bancorp Inc (Other OTC:IDMC.PK - News), the Office of the Comptroller of the Currency said it closed First National Bank of Nevada and First Heritage Bank NA of California.

First National had total assets of $3.4 billion and $3 billion in deposits while First Heritage had assets of $254 million and $233 million in deposits, regulators said.

The FDIC said the cost of the transactions to its insurance reserve is estimated to be $862 million, adding that the two failed banks represent just 0.3 percent of the $13.4 trillion in total industry assets at about 8,500 FDIC-insured institutions.

[rabscuttle385]

A billion here, a billion there, and pretty soon you're talking real money.

Note the FDIC only has approx. $53 Billion to back almost $4-5 Trillion in deposits, and Chuck Schumer's IndyMac charlie foxtrot already cost $4-8 Billion.

This new event adds almost three quarters of a billion.

[LikeLight]

Okay, two more down. Getting to be a Friday night tradition.

[TruthConquers]

Makes me wonder if my bank goes under, will there BE any money left for the FDIC to bail out the depositors.

My guess, somewhere along the way, the answer will be NO, because they WILL run out of money. There just isn’t enough to cover all those “not marked to market” credit swaps the banks are holding.

[rabscuttle385]

My guess, somewhere along the way, the answer will be NO, because they WILL run out of money.

When the FDIC exhausts its own funds, any other claims are put to the U.S. Government and become an obligation of the FedGov.

[John123]

Is anybody wondering about Bank of America? They bought out Countrywide, Lasalle Mortgage and is on the hock for billions of off the books guarantees to companies that invest in mortgages...

[rabscuttle385]

Is anybody wondering about Bank of America?

TBTF. WaMu, on the other hand...

Eventually, one of the bank failures will hit something stuffed full of derivatives, and then the real sh*tstorm will begin.

[Orange1998]

The govt would like you to believe that but in reality the obligation goes to the taxpayers.

[rabscuttle385]

FYI, two more banks bit the dust after market closing.

[John123]

TBTF

The Feds can't bail out EVERYBODY... can they?

[rabscuttle385]

The Feds can't bail out EVERYBODY... can they?

They own and operate the printing presses. Of course, history teaches us what happens when governments exercise the Zimbabwe maneuver.

[dalereed]

“TBTF”

Type in english when I went to school 60 years ago they didn’t teach alphabet soup!

[rabscuttle385]

My apologies for the acronym usage.

TBTF = "Too Big to Fail"

[John123]

governments exercise the Zimbabwe maneuver

Kick all the white people off their farms?

[rabscuttle385]

Kick all the white people off their farms?

I was referring to the fact that Mugabe's government started printing paper money like crazy.

[the anti-liberal]

Affirmative Action Lending [aka Community Reinvestment Act]: the gift that keeps on giving!

Thank you Libtards!!

[Kay Ludlow]

I've understood that among the banks on the potential to fail list, there is one big bank. I'm thinking we'll see more Friday afternoon small bank failures, so people get used to it, then the big bank. Which one is that? I'm guessing Bank Of America. After all, not only did they buy out Countrywide, but they also were at the forefront of providing banking services to undocumented ‘workers’. Since the illegals are leaving in droves (not everywhere, but certainly many places), BoA is the bank that seems most likely to be the Big One...

[Pelham]

“A billion here, a billion there, and pretty soon you’re talking real money.”

Everett Dirksen fan club.

[John123]

I know you were... just pulling your leg there... :)

[nw_arizona_granny]

Ping.

[biff]

Bank and S&L shutdowns are always performed of Fridays. Gives the regulators two days to get things in order for re-opening on Monday under new management.