Delinquency rate on bank loans up to record 6.49%

Delinquency rate on bank loans up to record 6.49%

www.marketwatch.com

"Before this recession, the highest charge-off rate had been 1.70%. Delinquency rates for real estate loans rose from 7.10% to 8.27%, the highest since the data began in 1987."

(visit the link for the full news article)

I believe this kind of loan failure rate increase will be absolutely crushing to banks. What this story means to me is that the FDIC will run out of money as they only have 13 billion left of funds right now from what I heard earlier this month. It also means that this depression is not near the bottom yet contrary to what the popular opinion is among US economists and contrary to what mainstream news outlets try to tell us.

www.marketwatch.com
(visit the link for the full news article)

Well the FDIC has access to 500 billion in additional funding if need be, but then that presents a whole host of other problems, mainly a loss in confidence in the US Dollar.

Over on the Market Data thread there were some posts with links to the Ticker Guy, and he was explaining how 5% non-preforming loans is cause for the FDIC to place banks into receivership, now the national average is 6% or whatever it is, that is not a good thing, our whole financial system is on the verge of collapsing and could come at any time.

Our economy is basically shot and whatever the treasury and the Fed are doing is only making it worse, remember way back when the bailouts started Bereneke said there wasn't a backup plan, well the reason why is because what they are doing is the only thing they can do to increase control, to make the right moves means giving up power, that isn't going to happen unless they are forced to do it.

reply to post by truthquest


Unfortunately, I agree. All of this talk of recovery, but no one mentions that in just the last five months, the US foreclosure rate has set new records three times, including in July. We're foreclosing on over 1 million homes every three months now.

Link

I'm giving this thread a bump, because not only is it devastating news to the financial industry at the base of the crisis, but this morning again there is the news "Recession has hit bottom" in Yahoo news. I've been studying the economy for over 10 years, and believe the news I posted is one of the most important pieces of news I've read in those 10 years whereas the leading economic indicator news posted by Yahoo is not important.

finance.yahoo.com...

At least once a week, if not more, each mainstream business news section will display such nonsense about recovery and many economists do believe it.

No, the recession has not hit bottom. The article points to the leading economic indicators. Once federal government debt increases have stabilized down from a country-crushing suicidal 2-trillion dollar annual rate to at least a 500 billion annual rate of increase or lower, only then can we figure out whether the economic depression is still deepening to worse points. The fact that the GDP will likely just barely crank out a positive rate for the next report with a 2 trillion annual GDP boost from Uncle Sam points to additional economic devastation ahead even after the next bit wave of bank closures and foreclosures leaving a possibly severe homelessness problem.

Even if unemployment dips back down to 8% things will still be getting worse at that point because its still not enough to stop the next wave of mortgage foreclosures, the commercial/retail real estate collapse starting just now. Even after the economy starts to pick back up we have to see what will happen when interest rates start going back up. After dealing with those two collapses finishing up we'll see whether the government will then go bankrupt after having built up such debt loads and also whether high inflation will take a further toll on the economy.

So, hitting the bottom means we are about about 1/5 of the way through this mess, as employment to take years to recover and we can expect spending not to recover until at least 2013 or later.

[edit on 20-8-2009 by truthquest]