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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (398617)	7/14/2008 12:50:35 PM
From: tejek	Respond to of 1574056

Maybe things are not so bad.......may we'll only lose IndyMac, NCC and WaMu of the big banks. I guess we are a nation of whiners......getting all worked up over a few big banks. Oh wait....let's not forget FHN. As I said what's a few big banks, we have plenty more where they came from....right David? Oh yeah, I forgot about WB....of course, they're huge but so what. Right? Nervous investors mull more potential bank failures Commercial banks face heavy sell-off as analysts search for next IndyMac By John Spence, MarketWatch Last update: 12:27 p.m. EDT July 14, 2008Comments: 19BOSTON (MarketWatch) -- Bank stocks were under intense selling pressure Monday as investors and analysts worried that worsening housing and credit problems could claim more banks after the failure of IndyMac Bancorp Inc. Regional-banking shares led the decline in the financial-services sector on Monday. Among the biggest losers were National City Corp. National City shares were briefly halted Monday amid a panic-driven plunge before the company in a statement tried to quell what it called market rumors. "National City is experiencing no unusual depositor or creditor activity," the Cleveland-based bank said. Still, investors shrugged off the news and the shares were off more than 25% at last check. WaMu shares were also down over 25% in midday trading. Lehman Brothers analysts in a note Monday said WaMu could be forced to substantially boost its reserves to cover an estimated $28 billion of losses on the balance sheet, with $21 billion coming from mortgages. They said home prices and mortgage credit are showing no signs of stabilizing. IndyMac became the largest casualty of the subprime mortgage crisis over the weekend, as federal regulators shut down the troubled California savings bank in one of the largest U.S. bank failures ever. See full story. Financial stocks were in the red on Monday after the government this weekend said it would provide support to struggling mortgage giants Fannie Mae and Freddie Mac. Richard Bove, an analyst at Ladenburg Thalmann, in a research note this weekend said investors are looking beyond IndyMac to see where the next failure could be. He suggested looking at so-called non-performing assets, including the riskiest loans on the balance sheet that are in danger of going bad. One approach is to take the non-performing assets of a bank and divide that figure by outstanding loans. "A ratio above 5% suggests danger," Bove wrote. "A second approach is to divide an institution's non-performing assets by its reserves plus common equity. A ratio above 40% is the danger zone," the analyst said. Using first-quarter data, Bove calculated IndyMac's non-performing assets divided by gross loans was 10.5%, well above his cut-off for risk. Washington Mutual's ratio stood at 3.9%. Also, WaMu's ratio of non-performing assets to reserves and common equity stood at 40.6%, according to Bove. Overall, the data "indicate that the system is not anywhere near the danger that existed in the late 1980s and early 1990s despite all of the whining by public officials," the analyst wrote. "Perhaps, the second-quarter numbers will prove them right." He said none of the banks and thrifts on his coverage list are in the danger zone although Washington Mutual, which is rated neutral, "is on the edge." In March, MarketWatch reported that IndyMac was one of the financial institutions most likely to be claimed by the credit storm. See previous story. Investors are set to digest financial results from several large banks this week and will be looking for evidence of further deterioration in credit and housing markets. Companies set to report later this week include Citigroup Inc. and Zions, according to Thomson StreetEvents. Markets are forecasting more asset write-downs for the banking sector in second-quarter results. Although investors won't fixate on earnings as much as usual "given the focus on asset quality, capital and survivability for some," consensus estimates imply a median 13% reduction in earnings-per-share from a year earlier for small-cap banks, and a 20% decline for regional banks, according to FTN Midwest Securities Corp. "An emerging trend may be liquidity stress for less core funded banks," the analysts wrote in an earnings-season outlook late last week. John Spence is a reporter for MarketWatch in Boston. marketwatch.com