Business Idea

[genlock]

Stock certificate toilet paper. AIG, Wachovia, Bear Stearns, Leaman Brothers, GM, Chrysler, Ford, merill-lych.

Brilliant.

[cgarison]

Lucky as hell on Wachovia. It is not a "failed bank" but an acquisition so customer transactions will continue as normal.

Next up bank failure gossip: Which Ohio bank fails???

The odds on favorite, National City, is the most liquid at this time.

KeyBank refuses to take calls from the media.

5th/3rd is the dark horse in the race but is in pretty big trouble.

[genlock]

Do your magic beans say anything about West Virginia banks?

[Big Media]

I am not sure. I definitely see more mergers on the horizon. Failures.... I am not so sure. There are still some big players we have not heard from yet, including Wells Fargo, who have the resources to buy large bank shares. I doubt Chase is done yet either.

[AmpedNow]

How does BB&T look? I haven't heard anything about them.

JP Morgan / Chase looks like they'll come out on top, unfortunately. I hate them for personal reasons. Although I will concede that their skyscraper is a magnificent part of the Houston skyline...

Many of the "down home" local banks might not be able to withstand this in the long run, unfortunately.

[cgarison]

JP Morgan / Chase looks like they'll come out on top, unfortunately. I hate them for personal reasons.

Yep. I know that feeling. But it is not Chase, but it is Citi. The sad part is I have dumped Citi twice before and now with the Wachovia acquisition, once again, they have captured my account. I chose Wachovia in part because I liked their wholly owned credit card subsidiary Juniper. (sigh) And Wachovia sold Juniper to Barclays 18 months ago. And shortly after that Wachovia started messing with due dates and interest effective dates in such a way to screw me when ever they can and jerk a fee out of many any time I swipe the card. Barclays and AmEx are still good with keeping statements consistant from period to period.

I would break away and run. But the cash machine in the HEX HQ is Wachovia (soon to be Citi) so I will stay just to keep the fee free cash available. Which in turn brings me to the point last night as to why I was scared to hear that Wachovia was failing. My employer has all their principle banking ties with Wachovia. If Wachovia failed and went into FDIC receivership, it would have been a very strong possibility that HEX would have to file for bankruptcy and where would all the big girls go to get underwear! I guess I owe Citi a chance just for that reason.

Many of the "down home" local banks might not be able to withstand this in the long run, unfortunately.

The down home banks that can't weather this storm are the ones that folded AIG, Fannie Mae, Freddie Mac, Lehman Bros., and Merrill Lynch weeks ago with the bundling of ARM financing instruments and second mortgages into bonds which were sold to these big power house institutions. All of this mortgage paper turned out to be as good as junk bonds in the mid-80s. There were a few banks like this in the tri-state, but most of them have been folded into larger banks. The small banks that are left are fairly healthy if they can get the credit from the larger banks to run their day to day operations. Which is the rub to this whole disaster......

It is not that the small guy has not done everything right to save the farm, the house, the car and keep food on the table. It is the big swinging dicks of "Wall Street" that lost all the money in poor investments and pushing real estate prices into the stratosphere 3-7 years ago (depending on the market) to watch it all collapse like a house of cards as the near rich could not afford the thord mortgage on their house to pay for the summer house on LBI along with the one covered by the second mortgage out on Hatteras in addition to the rent on the condo in Miami which supplemented the primary house out in The Caldwells of north Jersey. Gluttony of a few cost the welfare of almost all of middle America. Now, NYC, Philly, Boston, LA and SF are feeling the pinch with the dollar gaining strength reducing the spending of foreign currency on our soil and capital budgets for construction have been spent and very little development is in the pipes for fall 2008 and all of 2009.

[Big Media]

Here's an answer to your question about WV banks:

W.Va. banks in a 'calm oasis' amid nation's financial crisis
Wall Street's problems apparently aren't affecting the local bank on West Virginia's Main Street, as officials say they are still making loans and business is brisk.
By Staff, wire reports

Wall Street's problems apparently aren't affecting the local bank on West Virginia's Main Street, as officials say they are still making loans and business is brisk.

State banks have been left pretty much untouched by the problems that caused national banks like Wachovia Corp. and Washington Mutual to be taken over because of losses created by adjustable-rate housing loans, said Joe Ellison, chief executive of the West Virginia Bankers Association.

http://wvgazette.com/News/Business/200809290691

[cgarison]

It looks as if BB&T is still "safe" but that is not saying much. The three OH banks plus SunTrust and Regions Financial are the next biggies on the list.

[Dr. Whiplash]

...Next up bank failure gossip: Which Ohio bank fails???
The odds on favorite, National City, is the most liquid at this time...

Looks like Ohio's largest bank ($91 billion in deposits) is holding on for now. From The Plain Dealer...

National City Corp. stock went into a freefall Monday, plunging 63 percent and closing at a stunning $1.36 amid investor speculation that more banks will fail or sell out. Other state banks including KeyCorp and Fifth Third were also hammered, but not quite as badly. National City stock was down by 50 percent even before the U.S. House of Representatives rejected the financial rescue bill.

National City Chairman and Chief Executive Peter Raskind said the sell-off, which started Friday with a 26 percent drop, isn't rational. "The market seems to be characterized by fear and, in some cases, by outright panic," he said in an interview. Nothing has changed at National City to warrant investor fear, Raskind said. "The fundamentals are no different than they were four days ago."

Raskind stressed that there are huge differences between his bank and Washington Mutual, which was seized by federal regulators last week, and Wachovia Corp., which sold Monday under stress to Citigroup in a deal brokered by the government. Wachovia's demise led investors to punish regional banks Monday out of the gate. Fifth Third of Cincinnati closed down 44 percent, at $9.11 a share. Cleveland-based Key was down 33 percent, closing at $9.80.

Banking analyst Terry McEvoy of Oppenheimer & Co. wrote in a report to investors Monday that he talked with "a number of National City's competitors and not one suggested that they are seeing an in-flow of new customers coming from National City . . .We do not feel National City is seeing a mass exodus of depositors." He said the bank has $91 billion in stable deposits - a huge number.

Another analyst, Lana Chan of BMO Capital Markets, said National City has enough capital and reserves to handle potential loan losses. While National City has some $17 billion in mortgages that it would like to sell but can't at reasonable prices right now, 95 percent of those loans are being paid on time every month. They're considered riskier because most were made to people who didn't have good credit scores or down payments.

Richlovsky noted that National City continues to have one of the highest levels of capital strength to protect against future losses. By contrast, Wachovia would have needed $19 billion in capital to match National City's position, he said. Still, National City faces tough times, said analyst Gerard Cassidy of RBC Capital Markets.

"They're in a category 5 hurricane," the Maine-based analyst said. But he added that National City executives have been working proactively to "get through this mess." More than 300 million shares of National City were traded Monday; that's 10 times the average volume.

National City has lost nearly $2 billion in the first half of this year, largely because of the mortgage market. Shares are down 96 percent from their high of $38.49 in early 2007.

[genlock]

http://www.techcrunch.com/wp-content/up ... dnessb.jpg

[Hoosier Daddy]

What's the word on WesBanco?

[Scott Reppert]

Gas at $10 a gallon and financial institutions collapsing? I'm ready...

[genlock]

The Money.
Where is the Government getting it?

OK, OK, I know that most of the money is in lines of credit that are passed back and forth electronically,
but at some poing the actual cash must change hands. There is $700 Billion for the bailout, $630 Billion for the influx of cash to the banking system in general, $100 Billion to Fannie and Freddie. $38 Billion for Bear, Stearns, and what, $60 Billion for the economic stimulus checks to the general population. That's over 2 TRILLION dollars. I figure the Fed will have to go to Scrooge McDuck's money bid to get that much cash. I bet the bankers are drooling. Every bad debt that they ever had, every losing bet (including super bowl bets) will be on the list. People who bought mansions they couldn't afford will be allowed to keep them and those of us who paid off their house and car can pay for the one's who couldn't.
I am pissed

[genlock]

I tried to send Nic Joe 2 an e-Mail but the congressional e-Mail server is overloaded.

I can't understand why.

[Hoosier Daddy]

How about ...

The CEOs and the members of the Boards of Directors for all those companies:

a) Return any bonuses, perks, benefits, etc. that can be liquidated into cash.

b) Sell all but one home - the cheapest one they own.

c) Sell or stop making payments on corporate jets, limos, or any corporate overhead.

d) Drain their savings accounts, sell their stocks, bonds, etc.

e) Put their furniture and all but one automobile per working adult in the house on eBay.

f) Give up every last penny received in a Golden Parachute arrangement.


Once all that money is collected and applied toward the "financial crisis", THEN we'll talk about the taxpayers ponying up the rest of it.

Fuck the corporate Robber Barons. When I see them bleed and die by their own hand, then I'll start worrying about what I can do to help. Right now, we take it up the ass whether Congress approves a bailout or not, and those who were on the inside and steered the Titanic into the iceberg just lay low for a while, smug and relatively untouched in their cocoons made of Dead Presidents. It's just a bunch of bullshit.

[genlock]

Angry citizens with pitchforks, torches and shovels.

[Lester]

Fuck the corporate Robber Barons. When I see them bleed and die by their own hand, then I'll start worrying about what I can do to help. Right now, we take it up the ass whether Congress approves a bailout or not, and those who were on the inside and steered the Titanic into the iceberg just lay low for a while, smug and relatively untouched in their cocoons made of Dead Presidents. It's just a bunch of bullshit.

Now, golden parachutes aside, weren't the banks forced to give sub-prime mortgages through the Community Reinvestment Act, or face some pretty stiff penalties?

[lastone]

It is my understanding that 5/3 bank is in some kind of major trouble. This is said to have led to a local car dealership failing. A former co-worker told me his new mortgage (he just purchased a new home) with them was "called in" or something, requiring him to find financing elsewhere. Nothing has been said (that I know of) locally about this except about the dealership folding.

Perhaps someone here knows more?

[Hoosier Daddy]

Fuck the corporate Robber Barons. When I see them bleed and die by their own hand, then I'll start worrying about what I can do to help. Right now, we take it up the ass whether Congress approves a bailout or not, and those who were on the inside and steered the Titanic into the iceberg just lay low for a while, smug and relatively untouched in their cocoons made of Dead Presidents. It's just a bunch of bullshit.

Now, golden parachutes aside, weren't the banks forced to give sub-prime mortgages through the Community Reinvestment Act, or face some pretty stiff penalties?

In a number of cases, yes, and that was wrong, too. Lenders should have been saying "I'm sorry, Mr. and Mrs. Smith, but you can't afford to buy any house over X price. You need to have an income of at least this much to make monthly payments, and X amount of money must be saved up first and used as a deposit. A house is a huge investment, and we can't afford to flush the country's whole banking system down the toilet by making complicated and expensive home loans to a lot of people who statistically can not afford to keep up with the payments. I'm sorry, but the bank down the street will tell you the same thing".

That's how it used to be, before deregulation and the CEO/robber barons and unchecked capitalism and feel-good government prodding and policies that ignored common sense banking principles. Our whole credit mess is a combination of personal instant gratification, ego and one-upsmanship over homes and cars and big boy play-toys, politicians (from both parties) with an agenda and a finger in the pie, slick and greedy corporate managers and attorneys who twisted and bent every rule and safeguard to give excessive amounts of credit to folks who could never pay it back, and naive citizens who trusted credit card companies, investment firms, and banks like they'd trust their family doctor to give factual, honest, paternal advice.

They're all wrong. It needs to change and change now before I'm comfortable bailing anyone out. If not, history will simply repeat itself.

[Arp2]

Dang it...why'd this have to flare up when it's time to go to bed?

As is usually the case, it's going to take at least three or four times the typing to try to state the truth than it did to interject the simplistic gripe(s). Until then, just know and believe that, if you're echoing the complaint of some idiot populist or someone running for election who needs the votes of the stupid and dependent to win, you're getting it wrong and need to spend a whole lot more time trying to understand it. And go to CNBC, the Wall Street Journal, Investors Business Daily, or Fox Business Network to do your learnin'....the mainstream media, which you know can't even get the story of a local event or business move right, is reeeeaaaally struggling with this.

Note to news outlets: although I would make this argument at any and every time with any and every issue, your absurd need to include the responses of several average ignoramuses is, more than at any time, a miserable malpractice of journalism. Literally the smartest finance people in the world are trying to figure out the better ways out of this, and you're broadcasting people double digits away from triple-digit IQs reciting overheard class warfare rhetoric and thinking they're sounding smart in the process....