Did you realize there have already been 103 failed banking institutions in the United States this year?
They always happen on Friday… so expect to see a few more tomorrow.
I have been projecting out to the end of the year that we will have at least 180 failed banks for the year.
Is that a high number?
Let’s explore it. Below is a link to the FDIC website where they list all of the failed banks for the past 10 years. It’s a little bit top heavy don’t you think?
http://www.fdic.gov/bank/individual/failed/banklist.html
I will break it down by year because I haven’t done that for a while.
Year – Number of failed banks
2000 – 2
2001 – 4
2002 – 11
2003 – 3
2004 – 4
2005 – 0 (Yes that’s a Zero)
2006 – 0 (Another big goose egg!!)
2007 – 3
2008 – 25 (UH OH!!)
2009 – 140 (YIKES!!!!)
By July 24th in 2009 – We had 64 banks shut down
This year, by July 23rd – We have had 103.
Maybe you think things are slowing down a little now?… They aren’t. You watch.
By the end of 2010, we will have at least 180 failed banks… maybe more. Here is a little more detail about this year’s stats. You will notice that we aren’t slowing down, staying pretty steady if you ask me.
Month – # of bank failures in 2010
Jan – 15 Failed banks
Feb – 7
March – 19
April – 23
May – 14
June – 8
July – 17 (None just prior to the July 4th Holiday and we still have one more Friday to go as I write this)
Do you think the FDIC is concerned about this… or about the perception of the public?
I’m going to tell you that they absolutely are. Do you remember in October 2008 when the FDIC bumped up the FDIC Insured Coverage amount for deposits from $100,000 to a whopping $250,000? That was directly related to consumer sentiment about the stability of our banking system. It was a temporary measure to increase the coverage. They had said at the time this would be lowered back down on Dec. 31 2010 – projecting the crisis would be over by then.
Guess what… they just made it permanent. Well, actually it was made permanent by the “Dodd-Frank Wall Street Reform and Consumer Protection Act” signed on 7/21/2010 by the President, see the press release below.
http://www.fdic.gov/news/news/press/2010/pr10161.html
So, who are these banking institutions that are failing? Well, they are NOT the big banks. You know, the “Too Big To Fail” banks like Bank of America, Citi, Chase, Wells Fargo. Nope, these banks all got their whopping tarp money and are making a TON of money off of zero or nearly zero interest loans from the FED.
The banks that are failing are YOUR neighborhood banks. You know, the one’s with only 2 or up to maybe 10 branches. Those are the majority of the failures. This is all getting swept under the mat on the news. Nobody is even covering it. Why is that? Do you think they are being told to “Pipe Down” about the bank failures?
This would be newsworthy in any other year. For some reason, the news media does not care about it.
Well, I have an idea for you. Go talk to your local bankers and let them know what you do. See if there is a fit for you to help them or some of their clients.
If you are a Realtor, maybe you can help them with their marketing.
If you own a landscaping company, maybe you could help them clean up their REO properties to give them some curb appeal.
Are you a contractor? See if you can do some work on the houses to make them show better on the inside or outside.
If you are out of work, there IS work to be done. I’m totally serious!
Maybe, if the bank won’t pay you upfront, you could do a little profit sharing with them or negotiate with them to get paid when they sell the property.
Or, if you have no work right now, maybe you could use one of these properties as a showcase of your talents. Create a history book of the property, what you did and how it turns out.
What if there was a way that you could not only help your local bank get out of trouble, but also help the local property owner get new funding?
There is a lot of work ahead of us all to get this economy going. Housing is a huge opportunity, but start out slow if you are just getting going.
