U.S. bank failures almost certain to increase in next year

[Amerigo Vespucci]

Source: CNN

SAN FRANCISCO, California (AP) -- Here's a safe bet for uncertain times: A lot of banks won't survive the next year of upheaval despite the U.S. government's $700 billion rescue plan to restore order to the financial industry.

The biggest questions are how many will perish and how they will be put out of their misery, whether it's outright closures by regulators scrambling to preserve the dwindling deposit insurance fund or in fire sales made under government pressure.

Weakened by huge losses on risky home loans, the banking industry is now on the shakiest ground since the early 1990s, when more than 800 federally insured institutions failed in a three-year period. That was during the clean-up phase of a decade-long savings-and-loan meltdown that wound up costing U.S. taxpayers $170 billion to $205 billion, after adjusting for inflation.

The government's commitment to spend up to $700 billion buying bad debts from ailing banks is likely to save some institutions that would have otherwise died, but analysts doubt it will be enough to avert a major shakeout.

Read more: http://www.cnn.com/2008/US/10/05/shaky.banks.ap/index.html

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[Just-plain-Kathy]

1. My fear is one day we'll wake up and all our bank accounts are cleared.

[OhioChick]

2. My fear, too. n/t

[harmonicon]

3. well, no shit

This is what I've been saying since the beginning of this crap.