Monday, March 02, 2009

Problem Banks in 2008: Nowhere Close to 1990-91

The FDIC recently released data through the fourth quarter 2008 on the number of "problem institutions," and the assets of those problem banks. The chart above shows that there were 252 problem banks in 2008, out of a total of about 8,300 banks. In contrast, there were almost 1,500 problem banks in 1990, or about 6 times the number in 2008.

The chart below shows the inflation-adjusted value of bank assets at problem banks from 1990-2008. Compared to the $156 billion of problem bank assets in 2008, there were more than 8 times that amount in 1991 ($1,298 billion, or almost $1.3 trillion).


10 Comments:

At 3/03/2009 1:05 AM, Anonymous Anonymous said...

You're comparing a Savings and Loans banking crisis (fraudulent loans, horrible projects, etc) to a nationwide credit problem with elements of that. The cost was high back in the day because the S&L system collapsed. Today there are a few small banks collapsing and the big ones are being prevented from failing (the ones with all the assets). If the government 'bailouts' weren't there the losses would be massive in comparison.

That said, the fearmongering is overdone. With the number of articles questioning whether we're in a depression I would imagine it won't be long before we're out of the recession we're in.

You really should have an article on real business cycles. Recessions are part of business cycles and it seems like politicians are claiming that's not the case (helped by the lack of moderate to severe recessions in recent memory).

 
At 3/03/2009 5:59 AM, Anonymous Anonymous said...

The government bailout tab (primarily for the financial sector) is now $9.1 trillion committed and $2.1 trillion spent.

You are right. We are nowhere close to the estimated cost of $125 billion to resolve the S&L crisis. It's only a difference of magnitude. LOL

 
At 3/03/2009 9:46 AM, Blogger KJ said...

The bailout is NOT spending anonymous...get a clue...buying commercial paper and reselling is NOT spending.

 
At 3/03/2009 10:05 AM, Anonymous Anonymous said...

Whatever, KJ. The Treasury will lose more money on the AIG black hole, than the entire S&L crisis.

 
At 3/03/2009 11:49 AM, Anonymous Anonymous said...

The bailout is NOT spending anonymous ...

That's true, but Obama's "porkfest" is.

 
At 3/03/2009 12:27 PM, Anonymous Anonymous said...

Why aren't you including Citibank, Bank of America, and Wells Fargo for that matter, in your list of problem banks?

Mark

 
At 3/03/2009 1:29 PM, Anonymous Anonymous said...

Hey, KJ, a real time update.

Even Bernanke now admits that AIG is a black hole (a hedge fund attached to an insurance company). LOL

$163 billion and counting until the next (fifth) bailout.

Why aren't you including Citibank, Bank of America, and Wells Fargo for that matter, in your list of problem banks?

Because Bair at the FDIC only takes care of the little banks. The too-big-to-fail type banks are handled by Bernanke at the Fed and Geithner (formerly Paulson) at the Treasury.

Otherwise, Carpe Diem wouldn't be incessantly barking up this tree, for instance.

 
At 3/03/2009 10:16 PM, Blogger marketdoc said...

Interesting data on a problem that impacts us all. In today's world, "perception is reality." If it "feels" like things are worse than 1980, people actually will believe it. This is reinforced by a news media that seems to report more opinion than facts.

 
At 3/04/2009 1:08 AM, Blogger OBloodyHell said...

> This is reinforced by a news media that seems to report more opinion than facts.

They gave up facts decades ago.

That's why I would never be such a complete moron as to quote the NYT as a reliable source of information without some other source backing them up.

Some people, though, are a lot stupider than that. They actually read that piece of used toilet paper.

 
At 3/04/2009 7:31 AM, Anonymous Anonymous said...

Some people, though, are a lot stupider than that

Your sidekick, juandos, fits that bill, OBH. YOU WANT CORROBORATING DATA. Try Bloomberg from November last year.

Make my day, punk.

 

Post a Comment

Links to this post:

Create a Link

<< Home