Contact Us

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

WASHINGTON – Despite signs of an improving economy, the nation's banks are still struggling — in fact, the pace of bank failures has accelerated.

What would it take to turn the banking sector around? And what can people do to protect their savings in the meantime?

Here are some questions and answers about the wave of U.S. bank failures, as the latest quarterly snapshot of the industry painted a grim picture.

Q: How bad is this wave of failures?

A: A cascade of collapses began last year as the financial crisis struck.

Eighty-four banks have fallen so far this year as tumbling home prices and spiking unemployment pushed loan defaults upward. That's the largest number in a year since the early 1990s, at the apex of the savings and loan crisis. It compares with 25 bank failures last year and three in 2007.

The failures have sapped billions from the federal deposit insurance fund, which guarantees account holders' money when banks go under. The fund stood at $10.4 billion in the second quarter, its lowest point since 1992.

The biggest failure this year: Colonial Bank, a heavy regional lender in real estate development based in Montgomery, Ala., which became the sixth-largest bank failure in U.S. history on Aug. 14. The Federal Deposit Insurance Corp. seized Colonial and sold its $20 billion in deposits, 346 branches in five states and about $22 billion of its assets to BB&T Corp.

Some analysts believe another 100 to 300 banks could fail before the crisis runs its course, largely because of souring loans for commercial real estate. The number of institutions on the FDIC's internal "problem list" — those rated by examiners as having very low capital cushions against risk and other deficiencies — jumped to 416 at the end of June from 305 in the first quarter, the agency reported Thursday.

Q: What's behind this?

A: Banks around the country have run into trouble on their loans for construction and development, the fastest-growing category of troubled loans for U.S. banks, especially in overbuilt areas. Many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans.

Lots of banks have heavy concentrations of these loans in their lending portfolios, and some small banks are considered by regulators to be particularly vulnerable. Delinquent loan payments and defaults by commercial and residential developers have surged to the highest levels since the early 1990s, during the S&L crisis.

At the same time, some recent failures have been smaller banks brought down by garden-variety loans that have soured during the recession. Regulators say they're concerned about growing delinquencies on prime, conventional home loans.

Q: So even though the economy is starting to recover, banks are still struggling?

A: The condition of the banking industry is what economists call a lagging indicator: It falls behind the state of the economy because the problems take longer to percolate through banks, as opposed to other signposts such as consumer spending, gross domestic product or permits for building construction.

That means the pain will continue to weigh on the banking sector while the economy rebounds.

FDIC Chairman Sheila Bair offered a reminder on Thursday: "Banking industry performance is, as always, a lagging indicator."

Q: What will it take to turn the banking industry around?

A: Not much other than time, experts say.

"The only thing you could do is ... to ignore the losses that are already there," said Karen Shaw Petrou, managing partner of Federal Financial Analytics in Washington. That would be a terrible mistake, she said, noting that regulators' blind eye in the 1980s prolonged the S&L crisis.

"The best thing for the banking industry is just to take it on the chin and move on," she said.

Q: What about me? What can I do to protect my money in the bank?

A: Accounts are insured by the FDIC up to $250,000 per depositor per bank. Joint accounts are insured up to that amount for each co-owner of the account; individual retirement accounts, or IRAs, held in banks are also insured.

If you have multiple individual accounts at one bank, it's important to structure them carefully so they don't exceed the limits. The FDIC has a calculator on its Web site called the electronic deposit insurance estimator, or EDIE, that can help determine how much money in deposit accounts, if any, exceeds the insurance limits. You can find it here: http://tinyurl.com/lt3aok.

For any money in a failed bank's deposit accounts that exceeds the insured limits, you become essentially a creditor of the bank. You would eventually recover some of your money, but the amount can range from 40 cents on the dollar up to the full amount. Recovery of the money could take months.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The release of the Papal Encyclical “Caritas in Veritate” (Charity in Truth) on July 7, 2009 is a social statement of the papal views on the economy and other social issues. In it Benedict called for a “world political authority” wrote the Edmonton Journal, “to manage the global economy.” The pope said that the world political authority “would have to be ‘regulated by law’ and “would need to be universally recognized and be vested with the effective power to ensure security for all, regard for justice and respect for rights.”

In other words, the pope is calling on the nations of the world to recognize a world political authority and give it legal powers to control the global economy. This is consistent with the recent plan of the G-20 meeting that was held in London in April. Essentially the pope is calling for the globalization of politics (which is already a long way toward being implemented), and the economy (which is now in the process of being developed through the G-20 and other internationalist organizations). The construction of the three-legged stool (global politics, economy and religion), requires international bodies that control all social and economic life on the planet. The Papal interest in this is central to the fulfillment of prophecy. There can be no globalized religion if there is no globalized politics and economy.

The pope conveniently blames unbridled capitalism and unregulated market forces which led to a “thoroughly destructive” abuse of the system, saying that the “current economic crisis is ‘clear proof’ of what he branded as ‘pernicious effects of sin’ in the economy.” Socialism has a different set of abuses that are just as destructive, but that is not the subject of “Caritas in Veritate.”

“‘The economy needs ethics in order to function correctly – not any ethics whatsoever, but an ethics which is people-centered,’” the pope said.” The papacy is referring to ethics defined by Rome, not by the international bodies that would control the world economy.

USA Today was more pointed. “Pope Benedict XVI today called for reforming the United Nations and establishing a “true world political authority” with “real teeth” to manage the global economy with God-centered ethics…” He also said that “to reach a sound global economy every responsibility and commitment must be rooted in the values of Christian truth.” In other words, the world political authority should develop its ethics and rules around papal pronouncements and definitions. “Without that, he says, ‘there is no social conscience and responsibility.’ He added, “That though the church has no ‘technical solutions to offer,’ he asserts that religion has a role in the public square.”

In other words, the Vatican is demanding a role in regulating world politics and economy based on its Christian ethics. The Holy See is trying to become the moral authority of the world.

He also said that previous economic, social and political systems “trample upon personal and social freedom, and are therefore unable to deliver the justice that they promise.” The new global authority, he said “should ‘revive’ damaged economies, reach toward ‘disarmament, food security and peace,’ protect the environment and ‘regulate migration.’”

In other words, the pope is urging that all these areas of life should be controlled by global authorities. Even the ability to move from one place in the world to another should be managed as well as the food we eat, and the way we spend our money. Yes, he even mentioned the way individuals as we as industry and governments use their money should be regulated.

“The pope’s views,” says political scientist Thomas Reese, a Jesuit priest and senior fellow at the Woodstock Theological Center at Georgetown University in Washington, D.C. “are ‘to the left of Obama in terms of economic policy,’ particularly in calls for redistribution of wealth…”

The papacy has been pressing for a redistribution of wealth for quite some time. This means taking money away from wealthy nations and giving it to poor nations. This is done through taxation and various domestic and global aid packages. But taxation is a drag on the economy, so there is a lot of pressure against more taxes. The overall intention is to bring the United States and other wealthy nations to a lower standard of living.

The pope also called for a greater role for trades unions. Trade unions should “be honored today even more than in the past,” wrote Benedict, “as a prompt and far-sighted response to the urgent need for new forms of cooperation at the international level, as well as the local level.”

In other words, trade unions should take on a more international and global role, thus expanding their power and influence. Rome knows which organizations will help her accomplish her goals. Trade Unions are apparently among them. If Rome helps the trade unions, they will help her. Many leaders and members of trade unions are Roman Catholic, giving Rome more power if trade union policies are implemented on a global basis. “Trades unions will be formed, and those who refuse to join these unions will be marked men.” Country Living, page 10.

Remember, it was the trade unions in Poland that worked with Solidarity and Pope John Paul II to destabilize the communist regime that led to the collapse of the European communist system. Rome is consistently uniting with trade unions to promote her agenda. Even as recently as the push for Sunday rest laws in Europe late last year, the trade unions united with the Vatican and other churches to pressure parliament to protect Sunday as a day of rest.

This is also prophetic. “The trade unions will be one of the agencies that will bring upon this earth a time of trouble such as has not been since the world began.” Manuscript Releases, volume 4, page 88.

“Satanic agencies are becoming more determined in their rebellion against God. The trade unions will be the cause of the most terrible violence that has ever been seen among human beings.” Manuscript Releases, volume 4, page 23.

With all the talk about the economy and wealth redistribution, it is not apparent that the Catholic Church intends to sell some of her valuable paintings and release some of her gold bullion to charitably assist developing countries out of their economic crisis. Apparently the church sees this as the work of wealthy nations other than Rome. Rome is seeking to control and manage the nations through her claims to moral principles, but hardly is she willing to reduce her own standard of living and wealth in order to lead the way. “Caritas in Veritate, is really quite empty of genuine leadership.” This hypocrisy goes unnoticed by most of the media.