The First Bank Failure of 2008

[villager]

Source: US News & World Reports

The First Bank Failure of 2008

Bad commercial real estate loans sink a small financial institution in Kansas City
By Luke Mullins

A tiny bank in Kansas City, Mo., has become the first bank in the country to fail this year—but it's unlikely to be the last.

Federal regulators on Friday shuttered Douglass National Bank, an African-American-owned bank with $59 million in assets that was named in honor of the 19th-century abolitionist Frederick Douglass. The bank, which has roots stretching back to the 1940s, had struggled of late, losing $1.3 million in 2007 and $4.3 million in 2006.

Although its recent losses were tied to bad commercial real estate loans, not residential mortgages, the bank's problems are nonetheless linked to the global mortgage crisis that has ripped through the financial services industry, says William Michael Cunningham of Creative Investment Research. "It's this secondary and tertiary impact of the crisis in the subprime market that's beginning to impact smaller institutions mainly through consumer spending," Cunningham says.

Douglass is the first bank to fail in 2008 and the fourth since February of last year. Before that, federal regulators hadn't shuttered a bank since June 2004.

<snip>


Read more: http://www.usnews.com/articles/business/economy/2008/01/28/the-first-bank-failure-of-2008.html

[grasswire]

1. wait a minute

Were blacks disproportionately affected by the predatory lending? Latinos? What's going on here?

I hate to see conspiracy to destroy our society in every move corporations/Bushco make, but damn it seems as if NOTHING is working in favor of the working class.

I recall that many of those load advertisements said "get the home you deserve" -- and that message was a deliberate ploy to sucker in those who could not afford the homes.

Bastards.

[lurky]

4. Yes, minorities are much more

affected by this than whites.

Here's an article from the Times:
http://www.nytimes.com/2007/11/04/weekinreview/04bajaj.html?_r=1&oref=slogin">What’s Behind the Race Gap?

A lot of inner city neighborhoods are becoming desirable again. Here in NYC, even Harlem and Bedford-Stuyvesant are starting to gentrify, and it seems to be happening in other cities. I'm wondering if this will be used to clear people out and accelerate the process.

[grasswire]

5. chaos capitalism

I'm more cynical than you are. I believe they see the property of black folk as easy pickings. New Orleans. Now this. Just as they (the powers that be) are very happy to have a disproportionate number of black Americans unable to vote; unable to break out of poverty.

[lurky]

8. You could be right.

NOLA is a perfect example of exploiting a crisis to "reclaim" valuable real estate.

[truedelphi]

2. Remember the reassurance we all have because after all, FDIC "guarantees" our deposits?

That guarantee matters only if three or four major banks crash.

Once five, six or seven go down, the FDIC account will be labelled "NSF"

And then the taxpayers will be asked to bail out the banks.

But since by adding a "Stimulus Package" to government activities recently, even the governement knows that we the taxpayers need help, I am not sure how this one will end.


Triple or quadruple shifts at WalMart anyone?

[amandabeech]

6. What is "NSF"? n/t

[ForPeace]

7. Not Sufficient Funds

i.e. the coffers are empty

[DCKit]

9. Non-Sufficient Funds. n/t

[amandabeech]

10. Thanks to both of you. n/t

[high density]

14. If that happens our currency is likely to be worthless anyway.

Even with the dumb subprime lending that went on, I don't see any scenario where "three or four major banks" end up failing. Even the total crap banks like Countrywide and E-Trade Bank are still operating.

[RUMMYisFROSTED]

3. Mom & Pop banks failing is the m.o. for the PTB.

For over a hundred years. See: S&L, The Great Depression, 1907, etc...

The wealth will not be shared if at all possible.

[TheWatcher]

11. Oh, but it's just a tiny bank.

Not a major bank. Those never happen.

Tiny banks are normal. Happens all the time.

Move along, nothing to see here.

Isn't American Idol on?

[7 of 11]

12. But then again

an avalanche starts when one tiny speck of sand gives way, the the two above that, then the three above that, ect....

[AlienGirl]

13. Here we go....at least I'm dressed for it.

[Wednesdays]

16. Indeed...here we go...

[Pale Blue Dot]

15. There are several stores closing in my area.

Right now it's the smaller, weaker stores, but that will change.

[daisy1957]

17. Not a good example.

This bank is not a good example.  It's been in trouble for
quite some time now.