Tuesday, November 25, 2008

FDIC Quarterly Banking Profile

Key takeaways:

--  Earnings for the industry dropped to $1.7 billion, 3rd quarter of 2007 the number was $27 billion

--  Industry coverage ratio drops to 0.85 (85 cents in loan loss reserves for each dollar of non-current loans)

--  THE DEPOSIT INSURANCE FUND RESERVE RATIO IS 0.76%.  $34.6 billion held to insure $4,544 billion in deposits.  The backstop is the Treasury and since the Treasury has no money (they borrow, $10 trillion in debt) any significant failures will increase our tax burden.

--  The FDIC is tracking 171 banks with $116 billion in assets that have significant operating issues.

--  Net charge offs total $69 billion through 9/30/08: banks have wiped these loans off the books.  Remember, the money supply HAS to decrease by roughly $690 billion as a result.

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