Agency (FDIC) sounds an alarm on U.S. banks' shaky outlooks

The Federal Deposit Insurance Corporation warned Thursday that the nation's ailing banking industry was likely to weaken further.

The FDIC said the combined profit of the financial institutions it regulates plunged 46 percent, to $19.3 billion, during the first three months of the year.

During that time, banks and savings institutions set aside more money to cover future losses than in any quarter in the last 20 years, the regulator said. Reserves totaled $37.1 billion — four times their level a year earlier.

...

In a statement accompanying the figures, Sheila Bair, the chairwoman of the FDIC, offered an unusually blunt assessment of the state of the industry.

"This is a worrisome trend," Bair said. "It's the kind of thing that gives regulators heartburn."

IHT

May 23, 2008

As I See It, 32 Commercial Banks and Thrifts May See the Feces Hit the Fan Blades

by Reggie Middleton

I have identified 32 banks that are $@%%. It's really as simple as that.

I have been publishing the research that I used to build my investment thesis. Thus far we have:

1. Intro: The great housing bull run - creation of asset bubble, Declining lending standards, lax underwriting activities increased the bubble - A comparison with the same during the S&L crisis
2. Securitization - dissimilarity between the S&L and the Subprime Mortgage crises, The bursting of housing bubble - declining home prices and rising foreclosure
3. Counterparty risk analyses - counterparty failure will open up another Pandora's box
4. The consumer finance sector risk is woefully unrecognized, and the US Federal reserve to the rescue
5. Municipal bond market and the securitization crisis - part I
6. An overview of my personal Regional Bank short prospects Part I: PNC Bank - risky loans skating on razor thin capital, PNC addendum Posts One and Two
7. Reggie Middleton says don't believe Paulson: S&L crisis 2.0, bank failure redux
8. More on the banking backdrop, we've never had so many loans!

... I will give you the complete list of what I call the "Deep Doo-Doo Banks".

Safehaven