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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (106763)	2/26/2008 8:53:42 AM
From: Giordano Bruno	Read Replies (1) \| Respond to of 306849

How many rabbits can fit in a hat? FDIC to Add Staff as Bank Failures Loom By DAMIAN PALETTA February 26, 2008; Page A2 WASHINGTON -- The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen. FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas. The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement. In public, policy makers are debating what role the government should play in trying to stabilize the housing market and minimize foreclosures. Meanwhile, regulators have worked discreetly behind the scenes to closely monitor the growing number of troubled banks and thrifts considered at risk. "Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group. In job postings on its Web site, the FDIC said it is looking for people with "skill in performing duties associated with a financial-institution closing, such as receivership management, resolutions and/or asset disposition; knowledge of the resolutions process as it relates to complex financial institutions." Such positions would require "very frequent overnight travel," the posting said, and would pay up to $180,770. "The notion of bringing back some people who have been through it before is very smart," said William Isaac, who was FDIC chairman from 1981 until 1985. All told, the FDIC has roughly 4,600 employees, far fewer than the about 15,000 it had as recently as 1992. On Sunday, the FDIC ran a newspaper ad seeking companies that could service commercial loans, mortgages and student loans in the event of a bank failure. It didn't say how much a company could earn in this area. The FDIC rated 65 banks and thrifts as "problem" institutions at the end of the third quarter of 2007, up from 47 institutions a year earlier. Both figures are low by historical standards. At the end of 1993, there were 572 "problem" banks and thrifts. The FDIC is expected to update its data on "problem" institutions today. Before the housing market soured, the banking industry was enjoying one of its most profitable stretches in U.S. history. There wasn't a single bank failure from July 2005 through January 2007, an unprecedented span. There have only been four bank failures in the past 12 months, a rate the FDIC has easily been able to handle. In many parts of the country, the housing-market decline has hamstrung banks, and regulators have reported weakening performance of commercial real estate, small business and credit-card loans. Exacerbating the situation is a cash-flow crunch, which makes it harder for banks to obtain funding to originate new loans. FDIC Chairman Sheila Bair, Comptroller of the Currency John Dugan and Office of Thrift Supervision Director John Reich have warned of a pickup in bank failures. Last week, Mr. Reich reported that the thrift industry lost a record $5.2 billion in the fourth quarter. The FDIC was created by Congress in the 1930s after a series of bank runs during the Great Depression. At the end of 2007, it had $52.4 billion in its fund that backstops the nation's insured deposits. Write to Damian Paletta at damian.paletta@dowjones.com

To: John Vosilla who wrote (106763)	2/26/2008 9:28:52 AM
From: MulhollandDrive	Respond to of 306849

Santelli on CNBC thinks more likely we'll be waiting in line for our pizza and gas as they go higher and higher.. john, i caught that as well.... unless i misheard, i don't believe your interpretation was correct he was making a comparison to the stagflationary times of the 70's (and the gas lines) and asked "are you seeing people in lines for pizza or gas?"....it was in response to can these increases be passed along the answer is yes... and the answer is people will still be buying pizza and beer, it will just cost more i also think the conversation i heard this morning was off the mark....(of course you have to expect that with guys like welch and zell, and the cnbs cheerleaders, who, let's face it are in the business of promoting goldilocks out of self interest) my point is i do believe that inflationary psychology has taken hold, not just in the US, but worldwide, and so much so, that you have countries like china hoarding commodities the argument against inflation that was proffered was there is no wage inflation, nor will there be....because of global competition... i personally take no comfort in that, in fact it sounds pretty grim, ever increasing prices and little ability to earn more $$ to pay for j2p the closest i heard to any realistic assessment of that situation was when welch spoke up and said "it's a pinch" that sounds like a consumer led recession to me <vbg>