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Banks Are Failing At A Record Pace, The FDIC Bank Problem List Continues To Grow And Most Americans Don’t Even Realize The U.S. Banking System Is Dying

In the mainstream media, all the talk is about how the “recession” is over.  But the truth is that our economic problems are far from over.  In fact, the U.S. banking system is dying.  U.S. banks continue to fail at a record pace.  The FDIC list of problem banks continues to grow at an alarming pace.  Loans and mortgages continue to go bad at an accelerating rate at banks across the United States.  The truth is that we are in deep, deep trouble, and the vast majority of the American people do not even realize it.  But the American people better wake up soon, because if the U.S. banking system dies, the American Dream is going to die along with it for tens of millions of Americans.

So far in 2010, 127 U.S. banks have been shut down by federal regulators.  That puts us on pace to far surpass the total of 140 U.S. banks that failed last year.  And last year was the most bank failures that the U.S. had seen since back in 1992.

So when will the number of bank failures start going down?

Will it ever start going down?

Can the U.S. financial system continue to handle dozens upon dozens of bank failures?

That is a legitimate question.

Unfortunately, it looks like the number of bank failures is only going to continue to get worse.

The number of “problem banks” is increasing at a truly frightening pace.

As of the end of 2008, there were 252 banks on the FDIC problem list.

As of the end of 2009, there were 702 banks on the FDIC problem list.

As we approach the end of September 2010, there are now 872 banks (well over 10 percent of all U.S. banks) on the FDIC problem list.

Does anyone else spot a trend?

So does the FDIC have plenty of assets with which to handle all of these bank failures?

No.

Today, the FDIC is backing approximately 8,000 U.S. banks that have a total of about $13 trillion in assets with a deposit insurance fund that is basically empty.

Well, to be honest, the situation is much more dire than that.

It is actually being reported that the FDIC’s deposit insurance fund is sitting at about negative 20.7 billion dollars.

Negative 20.7 billion dollars?

That’s not good.

And things are going to get even worse.

The FDIC now estimates that the deposit insurance fund will experience a $60 billion reduction due to additional bank closings between now and 2014.

Needless to say, that is not good news.

The U.S. banking system is basically a huge disaster area right about now.

And that suits the biggest U.S. banks just fine.

You see, the truth is that when small banks fail, the big dogs pick up market share.

In an article on our sister website entitled “Are We About To Witness The Greatest Banking Consolidation In U.S. History?“, I discussed the rapidly growing market share of the banks at the top of the food chain….

Back in 2000, the “Big Four” U.S. banks – Citigroup, JPMorgan Chase, Bank of America and Wells Fargo – held approximately 22 percent of all deposits in FDIC-insured institutions.  As of June 30th of last year that figure was up to 39 percent.

That is quite an impressive decade of work for the big boys.

And as more “small enough to fail” banks continue to go under, the big banks will be sitting there ready to gobble up the leftovers.

Isn’t our system great?

Meanwhile, there are plenty of signs that part two of the double-dip housing crash has begun.

Meanwhile, health insurance companies have announced that they plan to raise premiums because of the new health care law.

Meanwhile, bankruptcy filings in the United States increased 20 percent during the twelve month period ending June 30th.

Meanwhile, millions of jobs are being outsourced and offshored and they are never coming back.

Is it any wonder that according to a new CNN/Opinion Research Corporation poll, 74 percent of Americans still believe that the U.S. economy is in a recession?

The truth is that the U.S. economy is a complete and total disaster area and we are in deep, deep trouble.

So, do any of you all think that there is much hope that the U.S. economy can be turned around?

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comments

  • Not so Mad Max

    FDIC Negative 20.7 billion dollars?
    That’s not good.

    No it’s not the big banks are just as in bad shape. I would ask the reader to go to Realty Track dot COM type in their Zip code and watch what comes up. That’s just what the banks are willing to publicly expose, the banks have a massive shadow inventory of homes on the books. That’s not counting commercial Real Estate people are walking away from bad car notes, bad credit card loans.

    The banks have a problem with Real Estate they can’t sell these homes quickly and crash the market (trust me this isn’t a real crash not yet). They have to sell these homes so to keep prices semi stable. If they sell a home they financed for $150,000.00 but sell it after foreclosure for $100.000.00 they have to take a hit on the books multiply that by a few thousand just in one state and if you know anything about fractional reserve banking you see the problem.

    I don’t see how the big boys can get out of it the small fry crashing burning really doesn’t worry me. If BOA or Well Fargo takes a death dive in the middle of a Sovereign debt crisis here in the USA that will spark a run on everybody, and we all burn.

    PS if need more to worry about click on below (You’ll never guess who’s 129th)

    http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

  • sean

    Well,folks this has been mentioned by alex jones for quite awhile,the recession has ended the depression and economic collapse has begun,grow a garden,Pray alot, store water and pray alot,Make jesus your lord and savior and prepare as much as you can,God Bless America!!

  • sean

    let’s hope and pray to jesus that he can stop this situation from getting any worse.God Bless America

  • Zack

    The entire US banking system is insolvent due to the banks loading up on phantom derivatives based on faulty mortgages. FASB removed mark to market accounting rules and the Fed bought a bunch of this garbage, granting the banks some reprieve, but eventually the chickens will have to come home to roost. I’m only surprised that there haven’t been MORE bank failures.

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  • Phlogiston

    FDIC is funded by the banks themselves. As more banks go under, FDIC needs to increase the amount it charges banks to insure their accounts, and it has with a vengance. The increased ‘premiums’ cut into the bottom line, pushing banks on the edge over the edge. And the cycle continues.

  • mart

    This is exactly what the world’s ruling Elite (you know, the people that run our Government) want to happen. All this was carefully planned out by them as a big step closer to their “New World Order” (World Government) .
    Above are the 4 banks that are part of the “Elite” and therefore part of the New World Order. Just think, these 4 banks will end up owning most of the real estate in America because of for-closers. And, also a lot of real estate around the world. That’s not to mention all their investments all over the world! These banks are a true world power! And it wasn’t lone ago they gave themselves (through our Government) billions upon billions of our dollars, in that so called Government bail out. Here is a link to a clip on youtube that does a great job explaining just how much a billion dollars is. It’s about 3 min long, but well worth you time: youtube.com/watch?v=um0guhNGPPM (You will have to copy and paste, sorry.)
    You have all seen Si-Fi movies that show the world being run by a world government? What I remember was every person had an identification chip planted in them, they had no rights, did what they were told, and very limited freedom. They were all simply robots, working for the State. Of course this was only a science fiction movie a few decades back. But now it could well represent what could happen. We all should be afraid.
    Yes, pray to God, but also think about ways to stop it. No one wants this to happen….except the Elite. It’s so sad that so few Americans even know this is happening. But what is even more sad, it that many do not care to know. God bless us all.

  • filboyd

    Now, after years of folly, it seems that the progression of financial destruction has been about the reduction, impairment, and elimination of protection, insurance, and safety.

    It began at the top. Investment banks, regional banks, insurance companies, hedge funds, etc, used credit default swaps and various OTC derivatives to “insure” against an investment gone bad. Although this toxic financial waste continues today, much of it blew up when counterparty risk soared. And Lehman croaked.

    Now, with 250+ banks failed, FDIC insurance payouts have exhausted all funds and FDIC is in the red. I guess our bank deposits are now UNINSURED.

    This week, SIPC (Securities Investors Insurance Corp) admitted the Bernie Madoff fiasco depleted its insurance fund and put SIPC in the red. I guess our stock and bond portfolios are now UNINSURED.

    Recently, Social Security started paying out more than it takes in. If the backstops of FDIC and SIPC are bankrupt, and Social Security is bankrupt, the only backstop left is the Fed and its instant money creation.

    Healthcare reform legislation was supposed to improve things, but nobody can allay the uncertainty. So, something that was supposed to offer protection, insurance, and safety, only clouds our perceptions.

    The last and foremost haven has always been the dollar. No more. Insurance, security, and safety has been destroyed. That is the story that journalists have missed. They might take notice when the US Dollar Index (USDX) falls to .72.

    If there is a run on banks, who ya gonna call when the safety net has been destroyed?

  • Mr Carpenter

    To mix metaphores, the wheels are falling off, but it is no matter since wheels aren’t needed as the whole kit and kaboodle goes over the edge of the cliff to the jagged rocks below.

    FDR, the 2nd or 3rd worst prez we ever had, once said “in politics, there are no accidents.” With that in mind, it must be realized that the powers-that-be have ruined this nation intentionally. So after most of us die off, what happens to them? They deserve whatever it is they get, and God won’t be mocked.

    Frankly, I’ve grown tired of trying to tell people (literally for 30 years) to stop, think and vote for good instead of the lesser of two evils (which is – duh – still evil). I’ve been looked at as if I were the nutjob. Well, my saying “um, told you so” while standing in the wreckage of what was once a great and Christian nation, is not what I wanted to end up doing, trust me.

    Frankly, a morally, spiritually and fiscally bankrupt peoples cannot and will not vote decent people to lead them; that’s been proven to my satisfaction over the past 50 plus years on this earth. In other words, we’re going to get what’s coming to us. What ye sow, so shall ye reap. Yep; God said it, I believe it.

    After Bible study last evening, we were discussing how close we apparently are to total collapse and my friend said something rather profound. I said the most likely people to survive (if left alone) will be the Amish; most everyone else will quite literally die. To which he said “yes, the meek shall inherit the earth.”