Five more banks fail - 120 for the year
Banks in California, Georgia, Michigan, Minnesota and Missouri were shuttered, costing the FDIC a total of $1.5 billion.
NEW YORK (CNNMoney.com) -- Five banks failed late Friday, bringing the 2009 tally to 120.
The biggest to fall was United Commercial Bank of San Francisco, which had 63 U.S. branches as well as operations in Hong Kong and Shanghai. The bank held deposits totaling $7.5 billion.
East West Bank of Pasadena, Calif., agreed to assume all of United Commercial's domestic branches, as well as its international subsidiaries.
United Security Bank of Sparta, Ga., closed its doors for the last time on Friday. Moultrie, Ga.-based Ameris Bank will assume control of all United Security's deposits.
Home Federal Savings Bank of Detroit also failed late friday. New Orleans-based Liberty Bank and Trust Co. will assume control of its deposits.
Prosperan Bank of Oakdale, Minn., failed and will be taken over by Grand Forks, N.D.-based Alerus Financial.
Gateway Bank of St. Louis, Mo., also failed. Central Bank of Kansas City will take over its deposits.
Customers of the failed banks are protected, however. The FDIC., which has insured bank deposits since the Great Depression, currently covers customer accounts up to $250,000.
Customers can access their money over the weekend by writing checks or using ATMs or debit cards. Checks will continue to be processed, and borrowers should make mortgage and loan payments as usual.
What happens to the banks. United Commercial's failure will cost the FDIC's Deposit Insurance Fund an estimated $1.4 billion. East West Bank paid the FDIC a premium of 1.1% for the right to assume United Commercial's deposits, and the two organizations agreed to share losses on around $7.7 billion of the failed bank's assets.
An average of 11 banks have failed per month this year, and the federal coffer is thinning under the massive strain. The fund now stands below $10 billion, down significantly from $45 billion a year ago.
When the FDIC factors in expected closures, the agency says the fund is in the red and will likely remain there through 2012. Bank failure costs are expected to total $100 billion over the next four years.
So far 2009 has seen more than four times the number that were closed in 2008. It's the highest total since 1992, when 181 banks failed.
Ameris Bank will pay the FDIC a premium of 0.36% to take control of American United's $150 million in deposits.
United Security had $157 million in assets, and the FDIC and Ameris entered into a loss-share transaction on $123 million of those assets. The agreement means Ameris will share in the losses on the assets covered.
The failure is expected to cost the Deposit Insurance Fund an estimated $58 million. The two branches of United Security will reopen Saturday as branches of Ameris.
Liberty Bank and Trust will assume Home Federal Savings Bank's $14.9 million in assets and $12.8 million in deposits. The failure cost the FDIC fund $5.4 million. The two branches of Home Federal will reopen Saturday as branches of Liberty.
Alerus Financial will pay the FDIC a premium of 1.02% to take control of Prosperan's $175.6 million in deposits. Prosperan had $199.5 million in assets, and the FDIC and Alerus entered into a loss-share transaction on $173.9 million of those assets.
The failure will cost the FDIC $60.1 million. The three branches of Prosperan will reopen Saturday as branches of Alerus.
Central Bank will assume Gateway Bank's $27.7 million in assets and $27.9 million in deposits. The failure cost the FDIC fund $9.2 million. The single branch of Gateway will reopen Saturday as a branch of Central. 
First, the Comex fouled up its open interest reporting. Now, clearly they have their gold Commitment of Traders report botched up…
*The large specs increased long positions by 6,578 contracts and also increased shorts by 7,036.
*The commercials increased longs by 2,482 contracts and decreased shorts by 2,855.
*This is what is whacked. They say the small specs decreased longs by 19,548 contracts AND decreased shorts by 20,379. These numbers are so far out of the norm they defy any sort of belief.
end.
I cannot believe that they can send us at a critical time compromised data. Looks like there is a lot of fire and smoke over at the CFTC.
I will now report on the Open Interests:
The gold comex OI basis Thursday fell by a very small margin to the tune of 1180 contracts. The new gold OI rests at 510744.
The silver comex OI blew me away. It rose by an astonishing 3900 contracts to rest at 139400.
Please note that this was basis Thursday, not yesterday's OI. We always get OI 24 hours later than the fat cats on Wall Street.
To me it looks like a continual liquidation by smaller commercials who have shorted gold. They do not like what they see.
Judging from the COT report, the powers to be do not want us to see this as well.
In Silver, what can I say other than JPMorgan continues to supply the massive paper and the many long speculators out there, are
accumulating the silver on the long side in a slugfest which may be resolved in the delivery process commencing Dec 1.09.
In gold, we are witnessing an epic battle of two super powers. May the best man win.
In silver, I leave it up to you what is going on. I do not think a central power is behind the purchases of silver.
However, we are witnessing a scarcity of silver metal on the exchanges and also seeing great movements from warehouses.
Again, Dec 1.09 will be the key date for both silver and gold. Also remember that the month of December is the only month
of the year that both silver and gold stand for delivery on both Comex and LBMA.
stay tuned if a commercial failure is upon us.
OK lets go to yesterday's trading day. Here are some numbers:
The euro closed down .0037 to 1.4839.
*The dollar closed higher, up .06 to 75.80 (the pound rose .0034 to 1.6605, while the yen was the winner for the day, up .87 to 89.92).
*Crude oil lost $2.19 per barrel to $77.43.
*The CRB gave up 4.86 to 269.44, as the grain/soybean complex was drilled.
The yield on the 10 yr T note is 3.51%.
The DOW bucked the bad news and closed up 17 to 10,023. The DOG gained 5 to 2111.
end.
With gold rising JOhn Brimelow reported this:
MarketVane’s Bullish Consensus for gold and the HGNSI were both unchanged at 85% and 53.8% respectively. The GLD ETF reported shedding 0.05464 tonnes - 1,757 ozs.
end.
As I told you in previous commentaries expect an attempted raid whenever the GLD sheds gold.
The jobs report is a day that gold and silver are always whacked. The cartel attempted this again
yesterday and for two straight jobs reports, their efforts were nullified.
end
OK lets go to the big story of the day, the jobs report. Here is the official story:
08:30 Oct nonfarm payrolls reported (190K) vs. consensus (175K); unemployment rate 10.2% vs. consensus 9.9%
Sep nonfarm payrolls revised to (219K) from (263K)
* * * * *
Oct payrolls fall 190,000, jobless rate 10.2 percent
WASHINGTON (Reuters) - U.S. employers cut a deeper-than-expected 190,000 jobs in October, government data showed on Friday, driving the unemployment rate to 10.2 percent, the highest in 26-1/2 years.
The Labor Department said the unemployment rate was the highest since April 1983 and October's non-farm payrolls loss was the smallest since August last year. It revised job losses for August and September to show 91,000 fewer jobs lost than previously reported.
Analysts polled by Reuters had expected payrolls to drop by 175,000 and the jobless rate to edge up to 9.9 percent from 9.8 percent in September. The labor market is being watched for signs whether the economic recovery that started in the third quarter can be sustained without government support. The economy grew at a 3.5 percent annualized rate in the July-September period, probably ending the most painful U.S. recession in 70 years.
Payrolls have declined for 22 consecutive months now, throwing 7.3 million people out of work since December 2007, when the recession started. However, the pace of layoffs has slowed sharply from early this year, when nearly three-quarters of a million jobs were lost in January. In October, job losses were across almost all sectors, with education and health services and professional and business services bucking the trend.
Manufacturing employment fell 61,000 last month, while construction industries payrolls dropped 62,000.
The service-providing sector cut 61,000 workers in October and goods-producing industries slashed 129,000 positions. Education and health services added 45,000 jobs, while government employment was flat.
-END-
08:30 Oct average hourly earnings 0.3% vs. consensus 0.1%; average weekly hours 33.0 vs. consensus 33.1
Sep average hourly earnings unrevised from 0.1%; average weekly hours unrevised from 33.0
* * * * *
end.
And now for the real story behind the numbers:
In the report you will notice that the unemployment rate went from 9.8% to 10.2%
Also in the report you will notice that 190,000 souls lost their jobs.
However, the Bureau also announced that from their housing survey 558,000 souls lost their jobs.
Here are two stories that try and make sense of what these doorknobs are reporting and the discrepancy in
the two numbers:
A Reader Asks "How Did 558,000 People Lose Their Jobs When Only 190,000 Jobs Were Lost?"
An astute reader noticed that the BLS press release says that 190,000 jobs were lost from payroll employment, but the number of unemployed persons increased by 558,000. What's up with that?
http://jessescrossroadscafe.blogspot.com/2009/11/read
er-asks-how-did-558000-people-lose.html
***
click on the blue for the full story.
We also heard from Frank Venerosa on the subject. His account parallels Jesse's account:
From: Frank Veneroso
November 6, 2009
Executive Summary
1. According to BLS, payrolls fell at a 188,000 a month rate over the last three months. But their own household survey says employment fell at a 589,000 a month rate.
2. Why the discrepancy?
3. Chris Manning of the BLS told us last month that payrolls were overestimated in the twelve months ending March by 824,000. The source of this error was the birth/death model. BLS used "plug" numbers for the number of births and deaths. These "plug" numbers were wrong. They led to estimated positive contributions to employment that were too high. Most of the error (675,000 out of a total 824,000 jobs) occurred in the first quarter of this year. The birth/death model was adding significantly to payrolls when all other payrolls were falling. In reality the contribution from net births and deaths was in fact negative.
4. Manning told us that the faulty birth/death model was still being used for the months after March of this year. The implication was that the faulty birth/death model would continue to overstate payrolls and understate the payroll job losses in the months since March.
5. And, in fact, the BLS is doing just that. For the last three months they are assuming net birth/deaths have added 18,000 jobs a week. Last year over the same period they assumed it added 17,000 a week, the year before 18,000 a week, and the year before smack in the middle of the economic boom 18,000 a week.
6. It is obvious what BLS is doing. They are simply plugging in an extrapolated figure with zero adjustment for the most severe labor market contraction in three generations. And, worse yet, they know the birth/death number they are using is pure baloney.
7. NUTS!
8. Therefore, reality probably lies somewhere between the payroll survey monthly rate of job loss of 188,000 and the noisy household survey rate of job loss of almost 589,000. A best guess would be that jobs continue to be lost at a rate of 300,000 a month or more.
end.
The jobs report releases what we refer to as U3 data. It adds a plug B/D figure which fabricates
job creation after you loose your job. The death is your job loss and your birth is job creation, thus B/D.
The Bureau has been fabricating this plug since Clinton's time.
However, the Bureau also releases data on U6 which takes out the B/D plug and adds underemployment
The U6 figure which is a lot closer to the truth came in at 17%.
John Williams does a thorough analyis on the underemployment figure. He adjusts the U6 figure to come
close to reality. His analysis yesterday determined that the real unemployment figure is 22%.
I will now highlight for you the Williams analysis:
John
Williams'Shadow Government Statistics
Analysis Behind and Beyond Government Economic Reporting
Home - Latest & Archives - Primers - Alternate Data - CPI Calculator - Updates - Contact Us - 
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No. 256: Updated General Outlook, Employment/Unemployment, Money Supply November 6th, 2009
• Annual Payroll Loss Rivals End of World War II Production Shutdown • Unemployment Jumps to 10.2% (22.1% SGS) • Systemic Liquidity Problems Still Intensifying • Fed Continues to Explode Monetary Base More ...
No. 255: Brief Update - Friday’s Employment/Unemployment Release November 4th, 2009
• Employment Situation
Consumer Liquidity - Special Report S
you can find the report at:
o. 256: Updated General Outlook, Employment/Unemployment, Money Supply"
http://www.shadowstats.com
It is well worth reviewing!!
end.
As you can see, the economy recovery if it is one, is a jobless recovery.
Lets see other important news releases yesterday:
Consumer credit contracted again. How can the economy grow if
the consumer is just not spending. Here is the report:
15:00 Sep Consumer Credit ($14.8B) vs. consensus ($10.0B)
Aug figure revised to ($9.9B) from ($12.0B)
* * * * *
U.S. consumer credit falls $14.80 bln in Sept
WASHINGTON, Nov 6 (Reuters) - Total U.S. consumer credit dropped by a bigger-than-expected $14.80 billion in September, Federal Reserve data showed on Friday, indicating households prefer to reduce debt and are still reluctant to spend.
September consumer credit outstanding fell at a 7.19 percent annual rate to $2.46 trillion. August's figures were revised to show a $9.86 billion drop, previously reported as a $12 billion fall.
Analysts polled by Reuters had forecast consumer credit dropping by $10.0 billion in September. Consumer credit has now declined for eight consecutive months, the longest downward streak since the series started in 1943, according to the Fed.
While the economy resumed growing again in the third quarter, possibly ending the most brutal recession in 70 years, there are concerns that sluggish consumer spending and a weak labor market could hobble the recovery.
The pace of job losses has slowed markedly from early this year, but the unemployment rate jumped a 26-1/2-year high of 10.2 percent in October.
Nonrevolving credit, which includes closed-end loans for big-ticket items such as cars, boats, college education and holidays, fell $4.87 billion, or at a 3.72 percent annual rate, to $1.57 trillion.
Revolving credit, made up of credit and charge cards, dropped $9.93 billion, or at a 13.26 percent rate, to $889 billion, the data showed.
-END-
For those who think that inflation is on the horizon (and not deflation), looks what this think tank revealed
yesterday:
US inflation rises to one-year high in Oct - ECRI
NEW YORK, Nov 6 (Reuters) - A monthly gauge of U.S. inflation pressures rose to a one-year high in October, pulled up by higher commodity prices, a research group said on Friday.
The Economic Cycle Research Institute's U.S. Future Inflation Gauge (USFIG), designed to anticipate cyclical swings in the rate of inflation, rose to 91.7 in October from an upwardly revised 91.0 in September, which the group originally reported at 90.6.
"While the USFIG remains in a cyclical upturn, indicating a further dissipation of any deflation danger, we are not on the verge of an upsurge in U.S. inflation," said Lakshman Achuthan, managing director of ECRI.
The October USFIG annualized growth rate, which smooths out monthly fluctuations, rose to 17.3 percent from an upwardly revised 12.9 percent in September.
end.
USA wholesale inventories are declining again as retail sells are just not there. The consumer is just not spending.
Here is this very important report:
U.S. wholesale inventories fall for 13th month
WASHINGTON, Nov 6 (Reuters) - U.S. wholesalers continued liquidating their inventories in September, with stocks falling for the 13th consecutive month and sales increasing for the 5th straight month, Commerce Department Data showed on Friday.
The drop in inventories, 0.9 percent, was smaller than the 1 percent decline analysts polled by Reuters expected. August's drop remained unrevised at 1.3 percent.
Sales rose a stronger-than-expected 0.7 percent in September after increasing 1.1 percent in August, which was previously reported as 1 percent.
The shrinking stocks pushed the inventory-to-sales ratio, or a measure of how long it would take to sell off stocks at the current pace down to 1.18 months' worth from 1.20 months' in August. That was the lowest since a matching 1.18 months' last September.
end.
Fannie Mae is in trouble again. It lost 18 billion dollars of funny money and they need to come to the well again.
It looks like they need another 15 billion of Zimbabwe -like money:
Fannie Mae Loses $18 BILLION, Needs $15 BILLION More In Aid (FNM)
WASHINGTON (AP) -- Fannie Mae is asking for an additional $15 billion in government aid after posting another big loss in the third quarter as taxpayers' bill from the housing market bust keeps getting bigger.
http://www.businessinsider.com/fannie-mae-loses-18-bil
lion-needs-15-billion-more-in-aid-2009-11
end.
Here is Bloomberg's Dawn Kopeckie article on the subject of Fannie Mae
Fannie’s Draws From Emergency Treasury Fund Reach $60 Billion
By Dawn Kopecki
Nov. 6 (Bloomberg) — Fannie Mae, the mortgage buyer seized by regulators, plans to tap emergency U.S. capital for a fourth time this year, bringing its draws of taxpayer money to $60 billion as the company sees no immediate end to its losses.
Fannie Mae will seek $15 billion in Treasury Department financing after posting an $18.9 billion third-quarter net loss, according to a Securities and Exchange Commission filing late yesterday. The Washington-based company, which posted $101.6 billion in losses over the previous eight quarters, has already tapped $44.9 billion from the $200 billion emergency lifeline.
“They’re going to need that $200 billion in capital, if not more, when this thing’s all said and done,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.
The Treasury Department is also holding up an agreement Fannie Mae reached in the third quarter to sell about $2.6 billion in low-income housing tax credits, the company said. The company may have to write down the value of the credits and take a charge if it can’t find a use for the credits.
Losses will continue and the company remains “dependent on the continued support of Treasury to continue operating,” Fannie Mae said in the filing. The company said any profit it does make would be eaten up by $6.1 billion in annual dividend payments owed on the Treasury borrowings, a cost that exceeded its annual net income for five of the past seven years.
Besides the trillions of dollars spent by the government for bailouts, this is the dollar amount the government guaranteed
to prevent a financial calamity: 4.3 trillion dollars.
(this does not include the swaps with other countries)
US govt backed $4.3 trln in assets in crisis-report
WASHINGTON, Nov 5 (Reuters) - The U.S. government guaranteed as much as $4.3 trillion in financial assets last year, making such backstops the biggest and riskiest part of Washington's response to the financial crisis, a bailout watchdog panel said on Friday.
The Congressional Oversight Panel said in its latest monthly report that the asset guarantees from the U.S. Treasury, the Federal Reserve and the Federal Deposit Insurance Corp helped calm panic in financial markets at minimal cost to taxpayers so far.
To date, the programs have generated fees of about $17.4 billion, while only up to $2 million is expected to be paid out for a default under the FDIC's bank debt guarantee program…
-END-
The total dollars pledged and spent is 13.7 trillion usa dollars.
This is Jim Sinclair's version of the big banks:
Filed under: In The News
Jim Sinclair’s Commentary
If you go to www.jsmineset.com
you will see a video that first was reported by CNBC's Trish Regan.
The video outlines massive shortages of flu vaccine for hospitals and Dr's clinics.
However amply supplies were provided to our banker elite on Walll Street..nothing but
unmitigated gall.
Next week expect gold to penetrate the 1100 level but not without a battle from our cartel members
The next 4 weeks will no doubt tell the tale.
I wish everyone a grand weekend and I will report to you on Monday
Harvey.
