U.S. banks are being shut down by federal regulators at a staggering pace this year, and yet most Americans seem completely oblivious to it. In fact, federal officials have already shut down 81 U.S. banks this year, which is about double the number that were shut down at this time last year. So why aren't more people upset about this? Well, part of the reason is because the FDIC is doing it very, very quietly. The bank closings for each week are announced every Friday, which means that they pass through the news cycle over the weekend almost unnoticed. For example, banks in Nebraska, Mississippi and Illinois with total deposits of almost $2.3 billion were shut down by federal regulators on Friday. So did you hear about it before now? If not, why not? Shouldn't the fact that we are experiencing a banking system collapse be headline news? But most Americans are more than happy to remain blissfully ignorant of what is going on. In fact, most Americans seem far more interested in what is happening on American Idol or Dancing With The Stars. But when the American Dream starts dying for tens of millions of Americans as the economy collapses perhaps more people will start to care.
So just how bad is the banking system crisis?
Well, FDIC Chairman Sheila Bair says that 775 banks (approximately ten percent of all banks in the United States) are now on the Federal Deposit Insurance Corporation's list of "problem" banks.
So should we be alarmed by that?
Well, there were only 252 U.S. banks on the FDIC's problem list at the end of 2008.
There were 702 U.S. banks on the FDIC's problem list at the end of 2009.
Now there are 775.
Do you know if your bank is on the verge of failing?
You might want to check.
But even if all of our banks fail the FDIC has plenty of money to cover our federally-insured banking accounts, don't they?
Unfortunately, they do not.
The FDIC is backing nearly 8,000 U.S. banks that have a total of $13 trillion in assets with a deposit insurance fund that is pretty close to flat broke.
It was recently reported that the FDIC's deposit insurance fund now has negative 20.7 billion dollars in it, which actually represents a slight improvement from the end of 2009.
But the bank failures on Friday drained another $313.6 million from the FDIC’s deposit-insurance fund.
And the way things are trending, the banking crisis could get a whole lot worse?
Why?
Well, Americans are simply not doing a very good job of paying their bills.
During the first quarter of 2010, the total number of loans at U.S. banks that were at least three months past due increased for the 16th consecutive quarter.
16 quarters in a row.
Just let that sink in.
If that is not a trend, then what is?
Oh, but the U.S. government will never let the entire banking system fail, right?
Well, they won't let the "too big to fail" banks go under, we have seen that.
But the small and mid size banks?
They fall into the "not big enough to bail out" category.
And where in the world is the U.S. government going to get more money to bail anyone out?
The reality is that the U.S. government is now over 13 trillion dollars in debt.
To give you an idea of just how horrific that is, if you started spending a million dollars a day on the day that Christ was born, you still would not have spent a trillion dollars by now.
That is how big a trillion is.
But for this year alone it is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars.
So, yes, pretty much wherever you turn we are facing a financial nightmare.
What should we do about all this? Feel free to leave a comment with your thoughts....
Mortgage Rates Fall To .01 Points Above All Time Historic Low June 13, 2010
The 30 year rate fell from 4.79 to 4.72 this week. This is the lowest point this year. The previous low was 4.78 reached two weeks ago. What is more interesting is that the all time low is 4.71 so just .01 points lower than current rates.
Looking at other rates the 15 year dropped from 4.20 to 4.17. The 5 and 1 year arms dropped from 3.94 to 3.92 (5 year arm) and 3.95 to 3.91 (1 year arm). These are all time lows since we have good tracking data for these mortgage products. So would it make sense to look at some of these other mortgage products since they are at all time lows? Personally I would still avoid the 5 and 1 year arm. Since mortgage rates in general are so low it makes sense to lock in for as long as possible. Below are rates from the weeks from May 13, 2010 to Jun 10, 2010.
Jun 10, 2010
30-fixed 4.72 15-fixed 4.17 5 ARM 3.92 1 ARM 3.91
Jun 03, 2010
30-fixed 4.79 15-fixed 4.20 5 ARM 3.94 1 ARM 3.95
May 27, 2010
30-fixed 4.78 15-fixed 4.21 5 ARM 3.97 1 ARM 3.95
May 20, 2010
30-fixed 4.84 15-fixed 4.24 5 ARM 3.91 1 ARM 4.00
May 13, 2010
30-fixed 4.93 15-fixed 4.30 5 ARM 3.95 1 ARM 4.02
Nov 26, 2009
30-fixed 4.78 15-fixed 4.29 5 ARM 4.18 1 ARM 4.35
So rates are one thing but it’s also informative to calculate mortgage payments. We took today’s rates and calculated a mortgage payment on a 200k house. We also did the same thing with rates from May, 13 2010 and rates from November,
26 2009.
Jun 10
30-year $1039.68
15-year $1496.47
5-year ARM $945.62
1-year ARM $944.48
May 13
30-year $1065.1
15-year $1509.62
5-year ARM $949.07
1-year ARM $957.13
Nov 26
30-year $1046.91
15-year $1508.6
5-year ARM $975.7
1-year ARM $995.62
So compared to a month ago a mortgage payment is $25.42 less a month for a drop of 2.45 percent. While that is not a huge drop it is considering rates from last week were already pretty low.
So what is going to happen moving forward? As always it’s hard to tell. If the economy continues to have a rocky recovery I would expect that rates will stay at current levels and possibly break down to new all time lows in the next few months. If the economy starts to rebound we should see mortgage rates move higher perhaps much higher. Over the next 6 months while it’s hard to know which way mortgage rates will move if they move up they could move up substantially while if they drop they do not have much room to fall.
God is very very angry with America and it’s bankers. Gods wrath and fury is coming. Be prepared,
Confiscatory tax policies and insapient tax incentives have led to this, as well as Jimmy Carter signing the Community Reinvestment Act into law. What a monstrosity that became.
On the bright side, perhaps when people fight for their freedom again the cycle of renewal will begin. I see my freedoms evaporating in the face of Bigger Government daily, on a national, state, and local level. The government is never benevolent. It can’t be.
As far as I’m concerned the banks in this country are getting exactly what they deserve. There loans are nothing more than loan sharking. Don’t be fooled by what ever rate they give you even if it is 4% they will still take over 60% of every payment you make and this is condoned by the government another business that is going to get what it deserves. Our government has been raping this country as long as it has been in place and has failed at every task it has been assigned to do. Don’t be fooled by any of the crap the news media spreads every war we have ever been involved in has been to provide money and power to a very select few while using the rest of us as cannon fodder. If you believe in any way that any war is for the betterment of the USA then you are an ignorant subject sucking from the hind tit of the government controlled media.