Details about the possible imminent failure first came this way a little over two weeks ago, and I've been doing a lot of calling and checking around since then. The individual who first told me has been a longtime (over ten years) source whose information has previously turned out to be exceptionally reliable. And all the evidence that I've been gathering over the past few weeks jibes bigtime bad with what the source has been saying.
For various reasons I'm not able to divulge the name of the bank. But this blog can report the following details:
- The bank in question is one of the top five financial institutions in the United States.I debated long and hard about whether or not to post even this much information. In the end I decided that it would be better to publish what I can talk about now, so that there'd never be the nagging in my brain that I didn't do something about this.- The bank has posted a high profit loss but this is "not even close" to how much money it has actually lost, according to others in addition to the original source.
- The biggest contributing factor to the bank's dwindling financial security has been "fast credit for every Tom Dick and Harry demanding a mortgage". This has been especially severe in the southwestern portion of the United States, where this bank has apparently loaned too much to people with little or even no collateral at all. And apparently this bank has thrived on business with people who weren't even supposed to be doing business in this country at all: parse that as you will.
- Some branches of this bank have already told customers that it might be days or even months before they can access their funds. You read that right. I've spoken with enough customers and one branch manager who confirmed this to be able report it as factual information.
- FDIC "could never" fully compensate depositors if/when this bank goes down. Source says that it will be like IndyMac but "much worse".
There's not much else to say at the moment other than this: it seems a trend lately that bank failures are only reported on late Friday afternoons or early evenings, after the markets have closed for the weekend. I'd wager a dollar (however much that's actually worth these days) that if/when the institution under discussion takes a dive, that'll be when you first hear solid word about it.
I'll try to write more about this as it becomes available.
