Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

[Slimprofits]

There is some valuable data in this white paper. Weiss apparently submitted this to Congress for consideration during the giveaway negotiations.

Do not skip over the tables in the Appendixes!

http://www.moneyandmarkets.com/files...hite-Paper.pdf

The FDIC’s list currently has 117 institutions with $78 billion in assets... We believe a more accurate count of problem banks can be derived from our analysis of: (a) the derivative risks assumed by major banks, (b) the mortgage holdings of the largest regional banks and (c) all banks and thrifts with TheStreet.com’s Financial Strength Rating of D+ (weak) or lower.2 Based on this analysis, detailed in Appendixes A and C, we find that

• 1,479 FDIC member banks are at risk of failure with total assets of $2.4 trillion.
  
• In addition, 158 savings and loans are at risk with $756 billion in assets.
  
• In sum, banks and S&Ls at risk have assets of $3.2 trillion,3 or 41 times the assets of banks on the FDIC’s watch list.4

[..]

These data show that among institutions with $5 billion or more in total assets, there are 61 banks and 25 thrifts that are overexposed, holding $1.50 or more in nonperforming mortgages per dollar of risk-based capital.

[..]

Private sectors and local governments also own residential mortgages in substantial quantities...

• The issuers of asset-backed securities, now holding $2.1 trillion in mortgages,9
• Nonbank finance companies ($426 billion),10
• Credit unions ($332.4 billion),11
• State and local governments ($159 billion),12
• Life insurance companies ($61.6 billion),13 plus
• Private pension funds, government retirement funds and households themselves.

[..]

The current debate tends to focus exclusively on residential mortgages. But at many regional and superregional banks, much of the risk is currently in the commercial mortgage sector, where recent data denotes many of the same difficulties as the residential sector.

There are $2.6 trillion in commercial mortgages outstanding in the United States. As with residential mortgages, these are also dispersed widely beyond the banking sector — $644 billion held by issuers of asset-backed securities, $263 billion held by life insurers, $65 billion at nonbank finance companies and $37 billion at Real Estate Investment Trusts (REITs).14

[..]

There are currently $14.8 trillion in residential and commercial mortgages in America. But beyond mortgages, there is another $20.4 trillion in consumer and corporate debt.

[..]

Currently, the Fed estimates $2.7 trillion in municipal securities outstanding,15 most of which have been reliant on a bond insurance system that remains on the brink of collapse.16

[..]

The notional (face value) amount of derivatives held by U.S. commercial banks is $180.3 trillion.18

• One single institution, JPMorgan Chase (JPM), holds $90 trillion, or 49.9% of all derivatives held by U.S. commercial banks...
• U.S. banks with the greatest credit exposure to derivatives are HSBC (with $7.21 in risk per dollar of capital), JPMorgan Chase (with $4.11 in risk on the dollar), Citibank ($2.79), Bank of America ($2.15) and Wachovia ($.77).21

[Jim Nickerson]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

There is some valuable data in this white paper. Weiss apparently submitted this to Congress for consideration during the giveaway negotiations.

Do not skip over the tables in the Appendixes!

That seems to be a nice find, babbitt, and I guess trumps the three one-paragraph emails I sent to my dip-shit senators and congresswoman. I guess they all stayed up late Thursday night reading Weiss's report before tossing it into the round file.

If Weiss is anywhere near correct, the days, weeks, months ?years ahead should be interesting.

[c1ue]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

It is amusing that Everbank was on one of the lists in the appendices.

It would have been useful for Weiss et al to break out the deposits vs. bad debts.

[Mega]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

You know, these numbers are just stunning...........Its the end!

"Fidel" could just walk into America now and decare victory!

Sad end of a super power.
Mike

[Guest]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

Not bad work, for a guy who has occasionally been disparaged as a "stopped clock" in this community in the past. Apparently Mr. Weiss has his good uses, when the real meltdown begins (which he's been forecasting for a half dozen years anyway). I always found their group's research pretty good - but it seems Weiss has only recently been gaining "reputability" on these pages.

There is some valuable data in this white paper. Weiss apparently submitted this to Congress for consideration during the giveaway negotiations. Do not skip over the tables in the Appendixes!

[zoog]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

It is amusing that Everbank was on one of the lists in the appendices.

It would have been useful for Weiss et al to break out the deposits vs. bad debts.

Why the amusement?

[Slimprofits]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

It is amusing that Everbank was on one of the lists in the appendices.

It would have been useful for Weiss et al to break out the deposits vs. bad debts.

I can't complain, it is much more comprehensive than any of the other lists I've been able to find in the public domain.

Side question - do you think there is a reason, other than perhaps a political one, that the FDIC website isn't designed so that people can search through their database by specific assets and liabilities, rather than just institution names and locations? Maybe they don't want us to be able to to sort out the top 500 banks with heavy exposure to mortgage-backed securities. I can't imagine it being a technical limitation either.

[c1ue]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

Why the amusement?

Everbank has been selling itself as a foreign exchange safe haven against the dollar's fall.

But the fact that it has billions of troubled real estate related bonds...seems to be contradictory no?

Side question - do you think there is a reason, other than perhaps a political one, that the FDIC website isn't designed so that people can search through their database by specific assets and liabilities, rather than just institution names and locations? Maybe they don't want us to be able to to sort out the top 500 banks with heavy exposure to mortgage-backed securities. I can't imagine it being a technical limitation either.

Actually, in this case I think the tin foil hat must remain off.

The FDIC's job is to insure deposits and dispose of failed banks in an orderly fashion. Their job is not to help depositors determine if banks are well managed or not.

Strictly speaking their 'watch' list is just an advisory anyway - neither IndyMac, WaMu, nor Wachovia have hit the list. The former 2 have gone straight to OTS and the latter may skip even that step.

The real question is this: The government theoretically has some institution responsible for regulating banks. This is, I believe, the Fed. Why does the Fed not have such information?

[zoog]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

Everbank has been selling itself as a foreign exchange safe haven against the dollar's fall.

But the fact that it has billions of troubled real estate related bonds...seems to be contradictory no?

I see what you mean now, thanks. I looked at some of their foreign-currency and other "exotic" options, but didn't like the details. I do have a basic savings account with them. Well under the FDIC coverage, but just the same I have been thinking about moving the money to short term treasuries.

I can't complain, it is much more comprehensive than any of the other lists I've been able to find in the public domain.

Side question - do you think there is a reason, other than perhaps a political one, that the FDIC website isn't designed so that people can search through their database by specific assets and liabilities, rather than just institution names and locations? Maybe they don't want us to be able to to sort out the top 500 banks with heavy exposure to mortgage-backed securities. I can't imagine it being a technical limitation either.

Actually, in this case I think the tin foil hat must remain off.

The FDIC's job is to insure deposits and dispose of failed banks in an orderly fashion. Their job is not to help depositors determine if banks are well managed or not.

Strictly speaking their 'watch' list is just an advisory anyway - neither IndyMac, WaMu, nor Wachovia have hit the list. The former 2 have gone straight to OTS and the latter may skip even that step.

The real question is this: The government theoretically has some institution responsible for regulating banks. This is, I believe, the Fed. Why does the Fed not have such information?

The bankrate.com bank ratings tool that EJ mentioned elsewhere is, IMO, nearly as obtuse as the FDIC, except that after a lot of clickity-clickity, you do finally end up with an actual bank name and associated rating. But there's no simple way, that I could find, to say "just show me all the banks and credit unions that are rated five stars in one big nice easy to read list". If they're not intentionally making it difficult, at the very least no one is making it easy for people to find a stable place to keep their money.

[ER59]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

I have two MarketSafe CDs with EverBank. Two of them together are over 100,000.00 limit. One CD (Resources) will mature in 10 months; the second (Gold) in 2,5 years. I am a single mom trying to protect my money to be able to help my daughter with college and I am scared! Any recommendations? Thank you!

[zoog]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

I have two MarketSafe CDs with EverBank. Two of them together are over 100,000.00 limit. One CD (Resources) will mature in 10 months; the second (Gold) in 2,5 years. I am a single mom trying to protect my money to be able to help my daughter with college and I am scared! Any recommendations? Thank you!

Well, I'm hardly an expert in such things, but that doesn't usually stop me.;)

Ten months suddenly seems like a long time, the way things are going these days. I figure you could either ride it out and hope for the best, or see if you can withdraw the funds in that CD early and pay whatever fees they charge.

If I've found the right info on Everbank's site:

2.5.5. Early Withdrawal Penalties: We will impose an early withdrawal penalty on withdrawals made before the maturity date of the CD. This penalty will be equal to one-fourth of the total interest that would have been earned on the principal balance of the account if funds had not been withdrawn prior to the maturity date. Early withdrawal penalties may be waived, at our discretion, in the event of death or legal incompetence of any of the Account Holders, as shown on our records.

So hypothetically if the principle was $100,000 and the rate is 5%, you'd be making roughly $5000 in interest, so about $1250 in fees to bail out early. Doesn't seem so bad I guess, but of course you'd want to talk to Everbank and maybe a financial adviser to make sure you understand all the fees, taxes, and other implications.

[ER59]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

Thank you, zoog, very much!

Suffering a panic attack I forgot that I opened one account under the trust name and the other is under my own name for the specific reason of getting protection in case of failure. TheStreet.com gives C+ to EverBank but I am not sure about the Street rating.

From Terms and Conditions: the early withdrawals do not receive principal protection and the price WILL BE COMPUTED DIFFERENTLY FROM THE MATURITY AMOUNT. I could ask for an indicative preliminary Early Withdrawal Price from the bank to be able to make an informed decision though.

Interesting fact: the bank does not offer MarketSafe CDs any longer.

[zoog]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

Thank you, zoog, very much!

Suffering a panic attack I forgot that I opened one account under the trust name and the other is under my own name for the specific reason of getting protection in case of failure. TheStreet.com gives C+ to EverBank but I am not sure about the Street rating.

From Terms and Conditions: the early withdrawals do not receive principal protection and the price WILL BE COMPUTED DIFFERENTLY FROM THE MATURITY AMOUNT. I could ask for an indicative preliminary Early Withdrawal Price from the bank to be able to make an informed decision though.

Interesting fact: the bank does not offer MarketSafe CDs any longer.

Maybe the market isn't safe any more.:eek::p

Hm, bankrate gives Everbank four stars, but the attached list in the beginning of this thread seems to suggest otherwise. My running amateur conclusion on all this bank analysis is: nobody really knows for sure. Or if someone knows for sure, they aren't talking.

EVERBANK
JACKSONVILLE, Florida
Bankrate.com Star Rating:
Safe & Sound CAEL Rating: 2

[cschx]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

Maybe the market isn't safe any more.:eek::p

Hm, bankrate gives Everbank four stars, but the attached list in the beginning of this thread seems to suggest otherwise. My running amateur conclusion on all this bank analysis is: nobody really knows for sure. Or if someone knows for sure, they aren't talking.

EVERBANK
JACKSONVILLE, Florida
Bankrate.com Star Rating:
Safe & Sound CAEL Rating: 2

I've been wondering about this myself. I checked Bankrate and the only five-star bank they show in my area is Comerica. The tiny local credit union (where I currently have most of my money) rates four stars. Somehow I feel like the credit union has to be safer than a huge commerical bank like Comerica.

[ER59]

Re: Weiss Research: 1,479 U.S. banks and 158 U.S. thrifts are at risk of failure

I called EverBank in July when I was researching banks ratings and the bank emailed to me the following announcement: "the Everbank Corp announced record earning of $44.7 million for the first half of 2008, an increase of 162% over the $17.1 million recorded in the first half of 2007. 2008 year-to-date benefited from EverBank's gain from sale of its share of EverBank Reverse Mortgage LLC to MetLife Inc. ..." It calmed me down a bit but now I am having the second bout of panic attack