"No ‘crisis’ at banks in state"
Did anyone else see this article in the News Tribune by the CEO of the Washington Bankers association? Those who read Calculated Risk and other blogs may recognize this kind of "reassurance" as a danger sign. Didn't IndyMac say the same thing before they went under? Not to mention he seems to completly ignore WaMu and it's exposure to subprime. Also what about our local banks exposure to construction loans both residential and commercial? Those our probably a way bigger danger than subprime loans at this point.
Comments
With a larger bank (like WaMu) they will be pushed by regulators to make a shotgun marriage with a stronger bank at a huge discounted share price. See Bear Stearns at $2 per share.
These larger banks that are in trouble (WaMu, Wachovia, National City) are too complicated for the government to handle an orderly transition. They need another similar large bank with experience to take over the assets and obligations.
Small banks are simple. They have deposits and loans.
Most of the larger banks have many subsidiaries with their fingers involved in Wall Street complex financial instruments. Unwinding that by the government would be a disaster. That is part of the reason Bear Stearns for pushed into the arms of JP Morgan Chase.
Just my opinion on how this will happen.
http://www.moneyandmarkets.com/newslett ... hrifts.pdf
Washington has 5 on the "strongest" list
Horizon Bk Skagit St Bk Washington First Intl Bk Washington FS&LA Yakima FS&LA
and 3 on the "weakest"
Americanwest Bk Sterling Savings Bank Westsound Bk
Very good fine. Gives further evidence to the fact that we are not immune to the banking crisis here as the article suggets. This is starting to sound familiar someone says "we are immune" to housing bubble/financial crisis/unemployment and then suddenly it happens.
Mr. Rogoff predicts a "whopper" bank failure in the next few months. He also predicts big inflation in the U.S. over the next few years. I really hope that he is wrong, because the consequences are not going to be pretty if he is right.
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Large U.S. bank collapse seen ahead
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The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world's biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday.
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"The U.S. is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say 'the worst is to come'," he told a financial conference.
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"We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks," said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund's chief economist from 2001 to 2004........
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