Busted: Bankers and The Global Economy

July 3, 2009

U.S. Banks, Economy Continue Up in Smoke

Filed under: banking, economy, money — Tags: , , , , , , , , , , , , , — digitaleconomy @ 10:28 am

economic fire sale

economic fire sale

Even though this website hasn’t been dwelling on bank closures lately, the number of bank closures is definitely on the increase. In anticipation of the holiday weekend, seven U.S. banks have been closed, bringing the total of banks closed this year to 52.

What has made the closures this week unique is that many of the banks have been financially interlinked, which has exposed them to closure because of CDOs and loan losses. Local banks, not too large to fail, have been hit especially hard during the economic crisis, as a drop in home values has devalued mortgage-backed assets. The rising unemployment numbers have also impacted the banks, as more consumers are defaulting on their loans.

What really highlights the current economic crisis to me was a visit to a large retailer yesterday. I spent an hour in the store and as I shopped, I heard all manner of phone conversations and scuttlebutt between employees about the economy, economic failure, job losses and financial family crises. This snapshot in time on a Thursday afternoon would seem to indicate that the nation is enduring some uncommon suffering as you read this commentary. While I was shopping, I wasn’t looking for what I discovered. The conversations, many of them quite loud, were impossible to ignore. ~ E. Manning

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