Friday, September 26, 2008

Bank failures and the FDIC

The FDIC has a list of "troubled banks," with about 117 names on the non-public list. Does anyone find it troubling that neither IndyMac (4th largest failure?) or WaMu (largest failure ever) were not on the list? Something is wrong with this picture.


P.S. Judging from the erosion of their stock prices and the cost for credit default swaps, it looks like Wachovia, Downey and National City might be next in line.

1 comment:

alba said...

I just don't think we know what it means for investment firms to be leveraged 30:1, using packaged mortgages as collateral (I don't really). If we solely focus on the plight failed mortgages, we would probably be able to overcome, without much change. It's not just banks that made these investments, and its not just Wall Street that will suffer. I'm going mostly on intuition that says banks are just the beginning, and may not be as relevant to mainstreet as state governments, pension funds, large unions, cities, and insurance companies. Who else gambled on these investment vehicles? Who are we leveraged to?