AP Article - Small Banks Failing .

[DMZwerg]

http://finance.yahoo.com/news/Small...content/main/162632968//date/desc/11/s1981731

Saw this in the paper this morning and figured it deserved some coverage and discussion. The full article title on Yahoo was "Small banks failing as larger firms regain health", which is similar to the title given in the local paper and about as good of a synopsis as I can think of.


As I read the article I could not help but think of it in context of Dodd-Frank, HVCC, etc, and what first occurred to me was what affect AMCs had in contributing to this decline. Small banks don't have interest in AMCs yet many larger banks own at least a portion of some and said AMCs aggressively marketed themselves to the smaller banks after HVCC came into play. So, as the market crashed the larger banks, especially given the bailout money and influx of funds from AMCs, could better afford to retract in certain areas and choose to not fund the riskier loans (or shuffle them off their books to FNMA and such more efficiently). Furthermore, in the more recent mention of buying back bad loans the larger banks seemed to draw a line and refuse to buy back were as I could see smaller banks falling pray to said more easily. Net result would be an increasing trend towards the failure of local banks allowing the big to be in place to get bigger in the future when a recovery happens, and said could well have been a secondary affect of HVCC.

Bottom line in my opinion: *ALL* AMCs need to be regulated (if not eliminated) not only to aid appraisers, but also to aid small banks and promote both more equal competition between banks but also more equal avenues for employment.

Discuss

 

[Terrel L. Shields]

The small bankers are now burdened with rules designed for big banks and big banks however, get a "Bye" on those rules in large measure because we "bailed them out"...great. Screw the small bank.

I know several that are suffering wave after wave of examiners pouring over their books. They are forcing them to liquidate property prematurely or hastily; demanding reappraisals on existing performing loans, which are paid for by the bank itself not the borrower. And, one in particular, has an operating profit every quarter but nevertheless they are forcing them to put up higher and higher margins. This is insane and forebearance of the banks in the depression was necessary or they all would have failed.

If this doesn't stop then the entire banking system in the U. S. will number smaller than the number of car companies. That, in itself, destablizes the entire banks system and makes it even more vunerable to shocks. The FDIC is out of control.

 

[Meandering]

The answers are here.

http://www.youtube.com/watch?v=F3AlFe8l4OE&feature=feedrec

I'm no fan of Glen Beck, but he has it right here.

And if you're paying very, very close attention you will hear something about Goldman Sachs and green buildings.

Humm, has anyone wondered why in the middle of a deep recession, with high unemployment and record setting foreclosures, we are being asked to add value for "Green" buildings? And that everyone from Sales people to builders to appraisers is having to take classes on "green" buildings when there is more excess inventory then they could get rid of in the next 10 years?

It could not be that Goldman's building at 71 South Wacker in Chicago is also the same building of the American Appraisal Association, one of our "founding" professional organizations and a member of TAF?

Nope, couldn't be.

.
Goldman, "doing Gods work" again.

.

 

[Lakefront boater]

Wow Marion, didn't know about the chicago/goldman building thingee, thanks for the heads up.


You don't think the financial crises of 2008 wasn't going to be a convenient way to monopolize banking and rid the small ones as soon as possible and then there's the pesky credit unions that the big boys have wanted to go the way of the elevator operator for years.

 

[airphoto]

Go to "www.FDIC.gov" each Friday and review the week's listing of bank failures (7-9 per week, lately) ..

 

[Meandering]

I have never been a conspiracy theorist, actually thought most of them were nut cases. But how can we move to the new world order with so many small banks. A couple of national banks, a world wide currency, global laws, and we can all be economically enslaved forever.

 

[Green Hornet]

In this area, I am seeing many small banks fail. Usually, the State or the Feds have a buyer lined up. They move in on Friday and Monday the bank opens under a new name.

For all of the bank failures that I have see, not one of the buyers has been a national bank. It is the larger local and regional banks that are buying them. A consolidation for sure, but still many, solid local banks and credit unions.

 

[jimmyfrank]

I have never been a conspiracy theorist, actually thought most of them were nut cases. But how can we move to the new world order with so many small banks. A couple of national banks, a world wide currency, global laws, and we can all be economically enslaved forever.

Marion, I do believe you are a "conspiracy theorist" like myself. If not, it won"t be long before you are.

 

[The Warrior Monk]

The small bankers are now burdened with rules designed for big banks and big banks however, get a "Bye" on those rules in large measure because we "bailed them out"...great. Screw the small bank.

I know several that are suffering wave after wave of examiners pouring over their books. They are forcing them to liquidate property prematurely or hastily; demanding reappraisals on existing performing loans, which are paid for by the bank itself not the borrower. And, one in particular, has an operating profit every quarter but nevertheless they are forcing them to put up higher and higher margins. This is insane and forebearance of the banks in the depression was necessary or they all would have failed.

If this doesn't stop then the entire banking system in the U. S. will number smaller than the number of car companies. That, in itself, destablizes the entire banks system and makes it even more vunerable to shocks. The FDIC is out of control.

Ditto Terrel.

This is exactly what is happening. All banks are supposed to be living by the same rules, yet the large banks are getting a pass.

This is utterly insane. The number of Lis Pendens filed by the large banks vastly exceed those of the small local banks, yet the small local banks get hammered. These large lenders are the ones using AMCs, and don't know many of the markets they lend in. OTOH, the local banks do.

I'd be willing to bet my life savings that the local banks are in better financial shape the big banks...minus the too-big-to-fail government backstop that they have, of course.