From the Ramparts
Junious Ricardo Stanton
Twenty-Three and Counting
“WASHINGTON (AP) -- Regulators on Friday shut down First Georgia Community Bank, the 23rd U.S. bank failure this year. The Federal Deposit Insurance Corp. was appointed receiver of the bank, located in Jackson, Ga. It had $237.5 million in assets and $197.4 million in deposits as of Nov. 7. The FDIC said all the failed bank's deposits will be assumed by United Bank of Zebulon, Ga. Its four branches will reopen Saturday as offices of United Bank. United Bank also will buy about $60.6 million of First Georgia Community Bank's assets; the FDIC will retain the rest for eventual sale.” By MARCY GORDON AP Business Writer
On Friday December 5 the FDIC shut down another bank. This one was located in Jackson Georgia. That makes twenty-three banks that have been taken over by the FDIC bought out by other banks or the US taxpayers. Since this is early December look for more bank failures before this year is out and into the New Year. The economic situation in the US is bleak and is getting shakier every day. The real economy, the one that invents, designs, manufactures and sells things is tanking as we speak. Currently our Congress critters are grand standing, playing hard ball with the Big Three after giving Wall Street the store with a wink and a smile two months ago. If the US auto industry goes belly up, which is a very real possibility even if Congress gives them a loan, the US will experience a devastating downturn that will leave more folks unemployed. The figures released last week are staggering, they portend more defaults, more foreclosures and more folks suffering as the US economy collapses.
I predicted the bailout would turn out to be a sham, a fraud and the greatest transfer of wealth and looting of a national treasury in the history of the world. It’s class warfare at its worst. As more and more information becomes available it appears US taxpayers are now on the hook for eight and a half trillion (that’s with a T) dollars and counting. Yet not one homeowner facing default or foreclosure has been rescued as a result of Congress passing the Trouble Asset Relief Program (TARP). TARP is not going to save the US economy nor prevent more banks from failing. TARP doesn’t even come close to addressing let alone solving the real problems causing the US and global economies to implode. The unregulated and totally free wheeling Shadow Financial System with its Hedge Funds and derivatives are the cause of the implosion. These unregulated debt based Ponzi schemes could very well sink the global capitalist system.
“The most urgent matter for Treasury to address is the toxic derivatives market. The notional amount of outstanding derivatives, as noted by the Bank of International Settlements, comes close to $512 trillion. This represents a figure that is impossible to settle and is the real Armageddon which Banks are preparing for by hoarding the cash that they have received through the T.A.R.P..Unless this time bomb is defused by bringing the undeclared positions on the table, the duration and gravity of this crisis can only increase. As the underlying assets of these instruments crumble the Banks' exposure to counterparty risk increases and will lead to the inevitable collapse of even more banks and reduce the availability of investment credit even more. The underlying assets include interest rates, mortgages, foreign exchange rates, credit ratings on companies and even creditworthiness of entire countries. This is the level of insanity that has passed for ‘Leveraged Investment’” The Destructive World of "Troubled Assets": Paulson shoots another arrow into the heart of the Economy by Andrew Hughes www.globalresearch.ca/index.php?context=va&aid=11309
Not only have home owners not been helped, now Congress is playing hard to get and making the auto executives grovel and beg for a loan that most analysts feel will only postpone the inevitable; the demise of the US auto industry anyway. Years of poor judgement, arrogance and mismanagement have left Chrysler, Ford and General Motors former giants of US industry staggering and stumbling like drunken sailors. Our Congress critters will do something to assist the Big Three, because if the economy continues to implode who will be left to buy or lease a house or car? Latest figures from the US Bureau of Labor Statistics show the jobless rate increased sharply in November. “Both the number of unemployed persons (10.3 million) and the unemployment rate (6.7 percent) continued to increase in November. Since the start of the recession in December 2007, as recently announced by the National Bureau of Economic Research, the number of unemployed persons increased by 2.7 million, and the unemployment rate rose by 1.7 percentage points. The unemployment rates for adult men (6.5 percent) and adult women (5.5 percent) continued to trend up in November. The unemployment rates for teenagers (20.4 percent), whites (6.1 percent), blacks (11.2 percent), and Hispanics (8.6 percent) showed little change over the month. The jobless rate for Asians was 4.8 percent in November, not seasonally adjusted. Among the unemployed, the number of persons who lost their job and did not expect to be recalled to work increased by 298,000 to 4.7 million in November. Over the past 12 months, the size of this group has increased by 2.0 million.” http://stats.bls.gov/news.release/empsit.nr0.htm
As you can see, things don’t look good. Banks are in trouble and they reflect the overall uneasiness of the US economy. Many more banks will probably fail in 2009 and the FDIC is preparing for protracted troubled times. “The 23 U.S. bank failures so far this year compare with three for all of 2007 and are far more than in the previous five years combined. It's expected that many more banks won't survive the next year of economic tumult. The pressures of tumbling home prices, rising mortgage foreclosures and tighter credit have been battering many banks nationwide. Seattle-based thrift Washington Mutual Inc. failed in late September, the biggest bank collapse in U.S. history. It had $307 billion in assets. The FDIC estimates that through 2013 there will be about $40 billion in losses to the deposit insurance fund, including an $8.9 billion loss from the failure of IndyMac Bank in July. The agency is raising insurance premiums paid by banks and thrifts to replenish its fund, which now stands at around $34.6 billion, below the minimum target level set by Congress and the lowest level since 2003.” FDIC shuts failed bank in Georgia By MARCY GORDON AP Business Writer. Twenty-three banks have failed this year, I suspect there will be a lot more to in 2009.