Happy Bank Fail Friday! (With A Little Bit of Love for Sheila Bair)
That's a great question
Who Is My BFF?
Hint: It's probably not Sheila Bair
Actually, Bloomberg, the FDIC says we're up to 106 bank failures for the year but whatever.
Shameless self-promotion warning: If you want to keep up on all the hot Bank Fail Friday action you can do so via @BankFailFriday and the official Bank Fail Friday Posterous. Extra thanks to my partners in crime @dmgerbino and @takingcharge (who also runs a pretty rad - read: useful - website over at CreditCards.com).
Anyway. Bloomberg. And shit, this doesn't look good:
U.S. regulators closed more than 100 banks in a single year for the first time since 1992, signaling the financial crisis hasn’t abated for lenders struggling with mounting losses tied to commercial real estate.
Seven banks -- three in Florida and one each in Georgia, Wisconsin, Minnesota and Illinois -- were shut today, according to the Federal Deposit Insurance Corp., pushing this year’s total to 105. That’s the most since the savings-and-loan crisis led regulators to shutter 179 institutions in 1992.
“It’s very painful, it costs a lot of money, it ruins careers,” said Gerard Cassidy, an RBC Capital Markets analyst in Portland, Maine. “But shutting down failed banks and writing off the bad loans is a necessary solution that has to be done to get the economy and the banking system back on its feet.”
Banks looking to weather the storm of bad loans have slowed lending to U.S. consumers and sought ways to preserve and raise capital. U.S. financial institutions have suffered about $1.1 trillion in credit losses and writedowns since 2007. The nation’s unemployment rate rose to 9.8 percent in September, the highest since 1983, according to the Labor Department. A record 531 lenders were seized in 1989, according to the FDIC’s Web site, which cites data back to 1934.
In August, the FDIC said 416 banks with combined assets of $299.8 billion were on its list of “problem” lenders at mid- year. It isn’t known whether the banks closed today were among them because the FDIC doesn’t release the list.
Does anyone have a good green shoots hookup? Mine got arrested the other day and I'm really really fiendin' for a hit.
Poor Sheila Bair, she thinks she's a jinx for markets. Personally I number her up there among favorites like Richmond Fed's Jeffrey Lacker and Skeptical CPA. The reality remains that some people know what they are talking about and some are absolutely fucking clueless. It's pretty obvious who is who (just read a Janet Yellen speech if you are still confused on this point and it should become fairly clear after you've gotten through just a few paragraphs of that drivel) and Sheila sort of kicks ass despite her really, really shitty job right now.
Reuters gave her a lovely write-up earlier this week:
Sheila Bair, widely lauded for her cool regulatory head amid crumbling financial markets and a rising tide of bank failures, says she should stay out of government jobs. She said she's jinxed.
"I joke that I should stay out of government service because everything I do, something bad happens," Bair, the chairman of the Federal Deposit Insurance Corp, told the Reuters Washington Summit.
She also hinted at letting someone else fill her shoes as a top bank regulator, but said that time has not quite come.
"I think these jobs are not things you should do for a lot of time. I think bringing in fresh perspectives is always important," Bair said.
"I'll be like Scarlett O'Hara. I'll think about that tomorrow. Because we've got a lot to do right now."
Bair, a 55-year-old Republican from Kansas, was plucked from academia in Massachusetts by former President George W. Bush to head the FDIC in 2006.
And Jr Deputy Accountant respectfully dedicates the following to the Care Bair.Run girl, run! Get out of the FDIC and QUICK!
Yes girl, I am rooting for you.
Rolfe Winkler tore it up over at Reuters:
An insider’s insider. That’s how Patrick Parkinson, the Federal Reserve’s newly appointed head of bank supervision and regulation, has been described.
A 30-year Fed staffer, Parkinson is a long-time defender of derivatives and an architect of Treasury’s proposal to give more regulatory authority to the Fed. His appointment is the latest indication that policy makers aren’t prepared to take bold steps to corral the banking sector.
American regulators, however, appear willing to settle for incremental reforms likely to perpetuate the status quo. Sheila Bair is intent on ending too-big-to-fail, but when I asked her at The Economist’s Buttonwood conference whether she would support policies to proactively shrink big banks she said: “No, I don’t know how we would do that.”
At the same conference, Larry Summers bemoaned the structural problems of banking, yet on policy he hedged: “Too-big-to-fail is too-big-not-to-be-regulated.”
Well fuck Larry Summers, we don't like him anyway.
And then there's homicidal maniac Alan Greenspan, as if we need to hear his fucking opinion for the bazillionth time. That guy needs to shut his piehole until he's ready to admit that he fucked us and got us all in this mess, Zimbabwe Ben included. Do you think Ben Bernanke actually enjoys working late cranking the presses? Doubtful. That dude looks like he needs a nap and I'm sure he has much better things to do than implode the dollar.
Others, including Alan Greenspan, say too big to fail is too big to exist. (Greenspan, incidentally, calls Parkinson a “superb choice” for the job)
Daniel Tarullo, who heads the Fed’s committee in charge of bank supervision and with whom Parkinson will be working closely, also says regulation is the way to go.
If regulation is the path we’ve chosen, it would make sense to hire a strong regulator.
Yet “the credentials Parkinson brings are more political connections than supervisory savvy,” contends Fordham law professor Richard Carnell. “He’s the perfect senior staff insider to help cement the Treasury’s commitment to the Fed as systemic risk regulator. But does he have the savvy to supervise banks?”
Yet one more post-climactic jerk off.
Anyway, regardless of how I feel about Sheila Bair as a person, she better figure out what the hell her agency is going to do and quick or else she's about to go under the bus faster than you can say assumed the deposits of...
The manic monetarists don't take kindly to well-informed, intelligent adversaries. Anyone claiming our nation's financial system needs a good bitchslapping is considered a threat to their wild money-printing madness after all.
Like I said, run girl. If you stick around too long I might begin to wonder if I'm wrong for thinking you're smart.