Ailing Banks May Require More Aid to Keep Solvent

Via: NY Times


Two smart and meticulous financial analysts - Reggie Middleton and Mish - argue that Wells Fargo is insolvent. In yesterday's update to his June 11, 2008 analysis, Reggie shows that the lion's share of Wells Fargo's assets are in mortgages in the California, Florida and Arizona markets, which are all tanking. Mish, who has also been covering Wells for a long time, wrote on February 2nd that Wells is drowning in loan defaults, and has hidden staggering amounts of toxic losses off of its balance sheets, just like Citigroup: [Despite its claim that it is saving mortgages by reworking their terms,] 30% of Wells Fargo's reworked mortgage loans are 90 days past due or longer, one year after loan modification.

Banks in Florida, Maryland and Utah are being closed, this trend continues...

By Ari Levy

Jan. 31 (Bloomberg) -- Banks in Florida, Maryland and Utah were closed yesterday as regulators wrapped up the busiest month for failures since the housing slump began in 2006. Ocala National Bank in Florida and Suburban Federal Savings Bank of Crofton, Maryland, were shut by federal regulators, according to statements sent by the Federal Deposit Insurance Corp. MagnetBank of Salt Lake City was seized by the Utah Department of Financial Institutions. The banks had total assets of $876.4 million and deposits of $790 million. Six banks have failed this month as tumbling home prices and a 16-year high in unemployment boost foreclosures. The FDIC classified 171 banks as “problem” in the third quarter, a 46 percent jump from the previous period amid the worst housing crisis since the Great Depression.

Entire Bloomberg Article, CLICK HERE