John Kanas: We'll lose 1000 banks over the next two years

[Slimprofits]

Who is Kanas?

http://www.reuters.com/article/press...009+BW20090521

Investors led by John Kanas announced today that they have invested $900 million in a new depository institution that acquired the operations of BankUnited, FSB from the Federal Deposit Insurance Corporation, as Receiver. The investors include funds advised by The Blackstone Group, The Carlyle Group, Centerbridge Partners and WL Ross & Co.

After the close of business on May 21, 2009 the Office of Thrift Supervision closed BankUnited, FSB and appointed the FDIC as Receiver. The FDIC facilitated a sale of BankUnited`s operations, deposits, and assets to the newly formed depository institution. The transaction is the culmination of a competitive four-month auction process run by the FDIC. The new institution will retain the name BankUnited and will remain headquartered in Coral Gables, Florida. The new BankUnited, one of the strongest banks in Florida as a result of this transaction, re-commits itself to serving individuals, businesses and local communities throughout Florida and the Southeast.

Mr. Kanas, who is the former Chairman and CEO of North Fork Bancorporation, will become BankUnited`s Chairman and Chief Executive Officer.

[metalman]

Re: John Kanas: We'll lose 1000 banks over the next two years

Who is Kanas?

confirmation of itulip forecast...

Ready for an epidemic of bank failures?

Even if, as we expect, another 900 or so banks fail over the next two or three years, the Treasury Department can move hundreds of billions to the FDIC. The FDIC is, for all practical purposes, an account of the Treasury Department.

Catch the Wave: Nonperforming loans are rising at alarming rates for all sizes of bank, large and small

Comparing the 1990/1991 banking crisis to the one that is developing:

1990/1991 Banking Crisis
1) Non-performing loans diverged by size of bank, with the biggest banks had the largest problems
2) As the crisis deepened, the four bank classifications by size experienced non-performing loans in a wide distribution from 2.7% to 5.7%
3) The rate of increase in nonperforming loans ranged from slow for smaller banks to rapid for medium sized banks

2008/2011 Banking Crisis
1) Non-performing loans do not diverge by size of bank as banks are experiencing a rapid rise in non-performing loans
2) The four bank classifications by size experienced non-performing loans in a narrow distribution clustered between 3% to 3.9% as of Q1 2009, and rising rapidly together
3) The rate of increase in nonperforming loans for all banks regardless of size is deteriorating through the depression in near lock step

What is apparent to even the most naive observer is that the management of all of these banks, regardless of size, all did the same stupid things together, such as backing retail commercial real estate loans during a consumer credit bubble when retail floor space increased at five times the population growth rate. What could possibly go wrong? Now they are all going down together.

Some day banks will have to figure out how to compete with each other for profits and customers at the top of a credit cycle without following one another into a hell of bad loans from which they can only later escape with tax payer money.

We estimate banks will continue to fail through the end of 2011, that more than 1,000 will fail representing a total asset loss of $900B, based on RBS estimates, information from contacts at the FDIC, and our own calculations.

This does not mean that the FDIC goes bankrupt and we sit at the precipice of another 1930s period of bank runs. If you want to know the future of the U.S. banking crisis, read this.