Reply #41: More from Shedlock [View All]

[DemReadingDU]

5/19/09 900 Small to Mid-Sized Banks Face Losses of $200 Billion

A Wall Street Journal Study of 940 Lenders Shows Potential for Deep Hit on Commercial Real Estate. Please consider Local Banks Face Big Losses.

That $200 billion is in addition to the $599 billion that the 19 stress-tested banks could face if the adverse stress test scenario comes true.

Given the baseline scenario was more like a cake-walk than a stress test, it is reasonable to assume another $800 billion is going to be needed by banks. 58 banks have been seized since 2008, 33 of them this year. More are coming and the FDIC is preparing for them.

Expect a wave of failures starting no later than September.
more...
http://globaleconomicanalysis.blogspot.com/2009/05/900-small-to-mid-sized-banks-face.html


5/19/09 Local Banks Face Big Losses
Journal Study of 940 Lenders Shows Potential for Deep Hit on Commercial Property

Commercial real-estate loans could generate losses of $100 billion by the end of next year at more than 900 small and midsize U.S. banks if the economy's woes deepen, according to an analysis by The Wall Street Journal.

Such loans, which fund the construction of shopping malls, office buildings, apartment complexes and hotels, could account for nearly half the losses at the banks analyzed by the Journal, consuming capital that is an essential cushion against bad loans.

Total losses at those banks could surpass $200 billion over that period, according to the Journal's analysis,
more...
http://online.wsj.com/article/SB124269114847832587.html#mod=testMod