Oldtent Archives 2007 - 2008

check the money in your pocketbook? also the silverware. [g] wj

Regulators Close Two More National Banks
By Alison Vekshin
Bloomberg News
Saturday, July 26, 2008; D01

First National Bank of Nevada and First Heritage Bank were closed by U.S. regulators yesterday, the first institutions to fail since regulators seized IndyMac Bancorp two weeks ago following a run by depositors.

First National Bank of Nevada, with $3.4 billion in assets, and California-based First Heritage Bank, which had $254 million in assets,were under capitalized, the Office of the Comptroller of the Currency said last night in a statement. Mutual of Omaha Bank acquired their deposits, according to the Federal Deposit Insurance Corp., which was named the receiver.

“All depositors, including those with deposits in excess of the FDIC’s insurance limits, will automatically become depositors of Mutual of Omaha Bank for the full amount of their deposits,” the FDIC said.

The banks, owned by First National Bank Holding Co. of Scottsdale, Ariz., are the sixth and seventh to fail this year as the financial-services industry grapples with failed loans stemming from the worst housing slump since the Depression.

Regulators closed IndyMac Bancorp, a California mortgage lender with more than $19 billion in deposits, on July 11, in the third-largest federal seizure of a financial company.

Mutual of Omaha Bank will assume all deposits and some assets of both banks, and their 28 offices in Arizona, California and Nevada will open Monday as branches of the Omaha bank, the FDIC said.

First Heritage, a national bank chartered in 2005, had three branches and mainly served corporations. First National Bank of Nevada, chartered in 1987, also operated as First National Bank of Arizona with 25 branches, the regulators said.

Lenders on the FDIC’s “problem list” grew to 90in the first quarter from 76 in the fourth quarter of 2007, the FDIC said in May. The FDIC insures deposits at 8,494 institutions with $13.4 trillion in assets. The OCC is an agency of the Treasury Department that regulates national banks.

U.S.bank regulators closed First Integrity Bank, based in Minnesota, and ANB Financial in Arkansas in May; Hume Bank in Missouri in March; and Douglass National Bank in Missouri in January. The four lenders had $2.2 billion in assets and losses estimated at $225 million.

-END-

Dave in Denver goes into action…

This story wasn’t released to the public until 13 hours ago - 10:50 pm east coast time. They clearly had been working on this Mutual of Omaha takeover for a few weeks. The story first broke late last night out of Vegas. How many people do you think will know about this today? It’s not in any of the Denver newspapers. It hit the Washington Post online, I doubt it made the editions that get delivered. I would argue that a part of the motivated takedown in gold last week was in anticipation of this event.

The 28 branches of 1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California, were closed Friday by federal regulators.

The banks, owned by Scottsdale, Ariz.-based First National Bank Holding Co., were scheduled to reopen on Monday as Mutual of Omaha Bank branches, the Federal Deposit Insurance Corp. said.

The FDIC said the takeover of the failed banks was the least costly resolution and all depositors — including those with funds in excess of FDIC insurance limits — will switch to Mutual of Omaha with “the full amount of their deposits.”

www.fox5vegas.com/money/16994819/detail.html

They were working on getting someone to assume the deposits for a few weeks. I don’t know what is happening with the liabilities, but it looks like they set up a good bank/bad bank structure with Mutual of Omaha assuming the deposits and any “good” assets. Don’t you think part of the gold smash this past week was in anticipation of having to make this announcement? And please note how the news release was timed for when no one is paying attention.

I will just say that George Orwell is rolling in his grave and smiling.

***

More from Dave…

this is HUGE news, especially in light of the fact that they clearly knew about this for a few weeks (it takes a few weeks to tee up someone like Mutual of Omaha to assume the branches), we have very little info on how the MOA deal is structured (my guess is similar to the JPM/Bear model in which MOA gets the deposits plus any decent assets, and the FDIC aka taxpayer gets the runny dog poop assets), they hid this from the public, they waited until the middle of Friday night to announce the news, and they smashed gold all week until Friday. I knew something was brewing when gold bounced mid-day yesterday.

And this is a $4billion failure with 28 branches in 3 states. This is not a small bank failure. My guess is it will soak up at least 1-2 billion of the remaining FDIC money after IndyMac.

This is an outrage that the public is being kept in the dark.

***

Dave is on a roll…

this is a disaster for people invested with big money in mutual funds that have shorter term funds with a high dividend and the funds are primarily invested in FNM debt - i.e. Pimco bond funds. this announcement shows that there’s a possibility that the subordinated bonds in FNM may be worthless. here’s the reason:

the Government is backstopping/bailing out FNM/FRE. But the amount of debt issued by FNM/FRE may be too massive for them worry about all of it. If the ratings agencies are downgrading the subordinated stuff, and the yields on them a blowing out (getting wider vs. Treasuries) it also suggests that the market place is starting to question the value of these securities.

If the ratings agencies expected that the Govt would guarantee ALL of the debt, then they would NOT be downgrading the subordinated stuff and it all would be trading at very slight spreads over equivalent maturity US Treasuries. Worst case, it should all be trading at maybe slight yield spreads over the Credit Protection derivatives on US Treasuries, which are trading at 20 basis points above Treasuries. The downgrade suggests otherwise - that the subordinated stuff might be junk.

What all this tells me is that the subordinated debt of FNM/FRE - the stuff most short term bond funds, widows and orphans are invested in, may eventually go belly up.

***

Then from Jon G in Aussie Land…

G’day Bill
I woke up this morning, blissfully unaware of the nightmare released by none other than our own National Australia Bank. I turned on my computer to find that one of our finest, had yesterday written off over a billion dollars of non-performing, off balance sheet, mortgage backed securities, taking 10 cents in the dollar for them. I find myself absolutely shocked that a banker would lie to investors about their level of exposure to these pieces of crap. Cough, cough.

(Excuse me while I swallow my fur ball).

Last year, when the sub-prime cancer spread to Australian shores, NAB CEO’s announced that they were not exposed to the sub-prime market. Yesterday, bank officials tried to polish over their lies in a video conference to investors and reporters, but there should have been no surprises to anyone watching….

How far down and into which dark corners does 10 cents in the dollar for all other derivatives gravitate? Answer……It’s turtles all the way,……… and they have just turned. US dollars anyone?……………………………………………ANYONE.???????
???????

Cowabunga dudes!!!!

See you on the other side mate and thanks for all. It’ll be my shout (I’m buying) if we ever meet. The beer, prawns and mud crabs are on me.
Regards
Jon G.

It all adds up…

US Treasury to boost 10-year note sales as fiscal deficit swells

WASHINGTON, July 25 (Reuters) - Faced with a swelling federal budget deficit as a slowing economy saps tax revenues, the U.S. Treasury is expected to boost the frequency of 10-year note sales and offer more 30-year bonds next month.

Analysts estimate the Treasury will announce plans to sell $15 billion to $16 billion in 10-year notes and $9 billion to $10 billion in long bonds at its refunding announcement on Wednesday.

“There’s a realization that these higher deficits are going to be with us for a while because the outlook for growth in the second half and into next year has deteriorated,” said Lou
Analysts widely anticipate that the 10-year note auctions will move from quarterly to monthly, with new issues and reopenings every other month. It sold $15 billion 10-year-notes and $6.0 billion in 30-year bonds in the last quarter…

-END-

Repeato time. Also from my commentary yesterday:

“The United States financial system is as fragile as can be. You can almost smell it in the air … another financial shoe is likely to drop soon. The mess is going to lead to a great deal of commotion and send gold and silver to new highs … and well beyond.”

While the Orwellians will downplay the significance of the new bank failures, the reasons to own gold and silver become clearer by THE DAY.

More on Monday.

GATA BE IN IT TO WIN IT!

MIDAS

Do I have the right person?  Isn’t this the 24/7 ment, the guy personally responsible for massive CPU overload lol.

You’ve been so busy with crusades, maybe you’ve missed my many posts on the subject.  There have been letters, petitions, radio interviews and much more.  You?

No need to change my words.  I didn’t write “take that walk alone”.  What I actually wrote, twice, was ‘walk in that direction’.  Very different meanings.

There’s nothing cryptic in my posts, no multi-level meanings (except the obvious childs) or playing with words.  Simple and straightforward.  Good for you if you’re finding double, triple and even quadruple meanings.  I guess that’s like my seeing animal shapes in the clouds!  BTW no one has to walk alone.

You’re right about one thing, my time is 100% my own, as it is for all of us.  Since my other indoor task is now finished, I’m off to do something more fun.  Carry on, old man, keep ‘em in line, lol!

tinyurl.com/5mgfoo

Exposing Bush’s historic abuse of power
Salon has uncovered new evidence of post-9/11 spying on Americans. Obtained documents point to a potential investigation of the White House that could rival Watergate.

Editor’s note: This article is part of a Salon investigative series on spying inside the United States by the Bush administration. Research support for the article was provided by the Nation Institute Investigative Fund.

By Tim Shorrock

Thanks again Ment. I’m going to do some digging.

got me… i have asked around here in seattle and get big blank looks

so i just bought alittle more gold .. it goes up faster than government paper ..

try this

www.everbank.com/000SiteMap.aspx?referId=11671

My account is with Global Resource Investments. Maybe there?

Ment, one more dumb question. Where can I buy these instruments?

yep very few can do it with double and triple meaning …and your post could be ranked with the greats of different levels of meaning i could see three .. or 4..

“take that walk alone” ..has some deep meaning and can be cyrptic to some… physical, metaphysical, and even it to the realm of zen saying’s

Thanks Ment.

canadian government paper , swiss, short term ..

What did you/will you do about it, huh? Why not use some of your abundant free time to pester the shrub, double lol!

what makes you think i have free time triple lol

i work from morning till night … you probably have more free time than the ment ..
what are you doing

Can I ask a dumb question? What does JS mean by  ” Non-Dollar Short Term Federal Currency Instruments?

Ha!  That explains everything.  Apparently you’re under the impression that the affliction which results in expressing yourself in fragmented thoughts and sentences, and compels argumentiveness, is a gift.  Oy vey!