90 Banks in trouble with FDIC!

[Maxwell76]

Just heard on CNN that at least 90 banks will be in trouble as of Monday. They are not going to be releasing names due to running of money!

July 13th, 2008
IndyMac reopens, Feds eye 90 banks
Posted: 04:21 AM ET
WASHINGTON (CNN) — IndyMac Bank, closed Friday by federal regulators, will reopen Monday morning with a new charter and a new name — IndyMac Federal Bank.

Customers who found locked doors and armed guards Friday afternoon could use ATM cards over the weekend to get to their money, but an estimated 5 percent of the $19 billion deposited in the bank were not insured by the Federal Deposit Insurance Corporation (FDIC).

Indymac’s failure, which the FDIC chairman said could add up to be the most expensive U.S. bank failure ever, came as the FDIC’s list of “problem” institutions is on the rise.

The FDIC disclosed last month that it was closely watching 90 financial institutions on its “problem list,” up from 76 in the first quarter of 2008. The total assets of “problem” institutions rose from $22.2 billion to $26.3 billion, the FDIC said.

The number of troubled institutions monitored by the FDIC has grown in each of the last six quarters, starting in the fall of 2006 when there were just 47 on the list, the agency said. The last time it approached this level was in the fall of 2004 when the number was 95.

[gamecock43]

I watched that whole thing too. Why isnt this creating more of a buzz? I am very young, so I have little knowledge of what this really means to all of "us" not directly affected.
If all 3 of my banks manage to not be on this list - what does this still mean?
I assume 90 banks in trouble, and 1 huge bank already closed down- will have big reprocussions (sp?) on the economy. I am just clueless how.
Will the stocks take a big nosedive?
Will housing fall further?
Will we enter a depression type of era?
Will people lose massive amounts of jobs?
Will our daily living radically change?

I just want to know the likely effect this will have on the rest of us not directly affected.

[SusanP]

I've looked at share prices for a few of the major banks and it seems that many (if not most) of them have already taken a nosedive. Down from $45-60 per share to $10-15, lower in some cases.

Buying stock in the big butts the government will cover might be a good idea at this point. Though I don't think they can really afford to save them all, so which ones...? Of course, the simple act of buying right now could maybe have positive effects... if the price seems to be going up more people will probably buy. It would take an awful lot of investors to save them though I'm afraid.

I have no idea what to expect if most of them go under.

[psaysofavril]

Scary, huh? Well, this article provides some tips on keeping your savings safe:

How To Protect your Savings | eHow.com

[rob62521]

Scary, huh? Well, this article provides some tips on keeping your savings safe:

How To Protect your Savings | eHow.com

Thanks for the article!

Having had a history minor, I've read stories and articles on bank runs during the stock market crash, etc. It appeared what happened yesterday at IndyMac was a bank run. I think as long as the banks are FDIC insured, those folks will be OK as long as the accounts are $100,000 or less. It might make banking inconvenient for a few days if our bank closes, but it's better than losing money altogether. I guess those folks who had more than $100,000 did lose money in IndyMac -- the news said they received 50 cents for every dollar.

[rennigade]

oh well...as long as you have less than $100K and FDIC insured, you should have no problems sleeping at night. If you have more than $100K then its a different story.

[Aleta]

I just read on AOL's finance page under: FDIC SAYS US BANKS SYSTEM SAFE. Under that are more articles and one that says Is your bank safe.

The article said "if it's a joint account, each depositor is insured up to $100,000. I had always though it was $100,000. even if it was a joint account. Check it out.

[Ima saver]

No, you are insured up to $200,000 if it is in joint names. You can have up to $300,000 in 3 names and so forth! From now on, I am going to withdraw the interest on my c.d.'s and put it somewhere else.

[jIM_Ohio]

During the great depression there was a run on banks which fueled the problems. This rush caused a liquidity issue, and since then FDIC was formed, and other government offices and policies have been established to provide liquidity.

We will now see if those actions, which are 70-90 years old, are going to work.

I have my doubts. Keep you money at big banks is my advice. Not local savings and loans. Big, nationwide, type banks.

Key, Citi, Bank of America, Chase all come to mind.

[Aleta]

Early this morning, I went shopping and in the shopping center it has one of the large banks. I couldn't believe how many people were outside lined up for the ATM's and a line from outside the sidewalk for the inside. Unless you are going to need a certain amount of money for that day or the next, I wouldn't do that. That is exactly what causes the problem. (Bank runs).

I have some money in that bank, but I feel it's covered by FDIC.

[jc3900]

During the great depression there was a run on banks which fueled the problems. This rush caused a liquidity issue, and since then FDIC was formed, and other government offices and policies have been established to provide liquidity.

We will now see if those actions, which are 70-90 years old, are going to work.

I have my doubts. Keep you money at big banks is my advice. Not local savings and loans. Big, nationwide, type banks.

Key, Citi, Bank of America, Chase all come to mind.

All the FDIC does is to encourage people to put their money in crap banks like corus or indymac. If there was no fdic, people would be much more knowledgeable about putting their money in well capitalized institutions. With a government guarentee, people just don't worry about important things like capital ratios or what type of assets a bank is holding.

On a better note, I am glad to say that my local bank is doing great and in this mess they are having close to one of their best profit years ever!

[disneysteve]

I guess those folks who had more than $100,000 did lose money in IndyMac -- the news said they received 50 cents for every dollar.

I find it hard to muster much sympathy for these folks. The insurance limits are no secret. They spoke to one guy on the news who had $236,000 in his account. He'll get back $100,000 under FDIC and half of the remainder. So he will lose $68,000 which is a huge amount of money. He sounded like a reasonably intelligent guy (and he does have nearly a quarter million in the bank).

While the uninsured losses are unfortunate, they were totally avoidable.

[noppenbd]

All the FDIC does is to encourage people to put their money in crap banks like corus or indymac. If there was no fdic, people would be much more knowledgeable about putting their money in well capitalized institutions. With a government guarentee, people just don't worry about important things like capital ratios or what type of assets a bank is holding.

Doesn't the FDIC have certain capital requirements for member banks? I think the FDIC is serving its purpose now. The failure of one or two banks is hardly a reason to condemn the whole system. Having FDIC insurance allows for much more competition and consumer choice.

[DebbieL]

How odd that your joint accounts in the US are insured for more. In Canada it doesn't matter whether it's a joint account or a single account. No account is insured for more than $100,000 under the CDIC (our FDIC).