While the Dow Jones falls below 10,000, it is not only your investment, which could be in danger.
Your bank may be, too.
Let's face it: The world economy is still raw. The debacle of European debt continues to spread from one country to another, without any good where it will end one. Here at home, the recovery is softer.
The best way is to evaluate the economy, the hodgepodge of indicators that are released every day and focus on measuring what matters most to ignore.It's not like chain stores reported sales and the unemployment rate, but it is still the best indicator of how the economy is doing.
This indicator is called "rate of net charge-offs. It 's the level of bank loans that borrowers can not repay, and I think that the most significant way to measure the real economic health of the nation. Say, unemployment has fallen from 10% to 5%. Are not people still can not afford to repay their loans, then the country really become stronger, do you have?
L 'Depreciation is 1.94%, and has grown incredibly, five times since early 2007. In a typical year, banks should expect about 32 cents for every $ 100 that damage to lose. At the moment, but banks are losing $ 1.94 to $ 100 loans.
This problem is exacerbated by the Bank's financial situation deteriorated. In early 2007, the banks $ 1.80 in cash reserves were for every dollar of loans that were late. So even if all those loans bankruptcy - and not all overdue loansbe - the banks were covered. Today, banks have only about 80 cents for every dollar of loans.
Do not be ridiculous to think that the worst of the financial crisis is over. Some banks are just beginning. Eat all the bad loans hurt all banks and many others are doomed to failure. The Federal Deposit Insurance Corp. (FDIC) says 77% of the banks are profitable. But that leaves 23%, which are bleeding cash.
The FDIC now has 775 banks on its "problem. Bank-listed so far this year 83 banks have failed, about half of them so in the second quarter, this is a truly frightening number than in the past. More than a third of the banks that have failed since 2000, so he done in the first five months of 2010.
The FDIC does not release its list of problem loans, but only says how many banks are on it. But with a special relationship that a bank can borrow money (the forerunner of the loans that are ultimately paid), the measures of investordetermine with a high degree of accuracy if their bank is safe.
It's called "Texas ratio." E 'was developed by a financial officer at RBC Capital Markets named Gerard Cassidy, using correctly predict bank failures in Texas in 1980 the recession in New England again in the recession of the early 1990s.
The Texas ratio is calculated by dividing the distressed assets of the bank by its shares of common equipment and provisions for loan losses. Tangible common equityEquity less goodwill and intangible assets. As the ratio approaches 1.0, the Bank increased risk of failure.
Any bank that has not in the second quarter, was a Texas ratio of greater than 0.90. In fact, the average was about 5.0.
Bank failures are set to announce on Friday afternoon, after the end of the activities of the week. 5 The Bloomberg News reported in June that three banks had failed: Tierone Bank in Nebraska, Arcola Homestead Savings Bank in Illinois and First National Rosedale,Mississippi. On June 11 it was reported that another bank, Washington First International Bank, was seized. It was June 18 Nevada Security Bank.
Frankly, none of these failures should be a surprise. After all, Rosedale Texas has the highest ratio of any bank in the country at 15.78. Tierone was 4.05, and Arcola was 0.91.
Investors can not afford not to know if your bank in one of the ten banks when it is in great danger, which is in me.It 'important to ensure that all investors, the list of banks with regard to their money is safe. And if your bank is a high or even higher than the average of Texas has money, then for heaven's sake, tomorrow, and close the accounts. It 's always better to get out of Dodge first farce.
This highly accurate barometer of the health of the bank, I not only reassures me that my bank - the highest rating Amarillo National - is safe and sound, I also made a list of ten banksmore likely to fail. If you bank at one of these organizations or friends or relatives who do, please pass this information along to them:
The ten banks in danger of failure, of 9 June 2010:
1. U.S. Bank, Port Chester, New York
2. First Commerce Community Bank, Douglasville, GA
3. SouthWestUSA Bank, Las Vegas, NV
4. High Desert State Bank, Albuquerque, NM
5. Bank of Ellijay, Ellijay, CA
6. Eastern Savings Bank, Hunt Valley, MD
7. ISNBank, Cherry Hill, NJ
8. Habersham Bank, Clarksville, GA
9. Ravenswood Bank, Chicago, IL
10. First National, Savannah, GA
I do not want to see go to any bank. But the fact that there are many, and many more will be how the financial system through its mountain of bad loans. The best way to predict which bank is in hot water is to use the ratio of Texas.
The good news is that the 20 banks listed in the S & P 500 have low ratios of Texas.
Institution -Ticker - Texas Value
Northern Trust - NTRS - 0.04
Peoples United - PBCT - 0.11
Hudson City Bancorp - HCBK - 0.15
Comerica - CMA - 0.20
Fifth Third - FITB - 0.23
Citigroup - C - 0.25
KeyBank - KEY - 0.27
M & T - MT - 0.29
First Horizon - FHN - 0.32
Marshall & Isley - MI - 0.37
Regions Financial - RF - 0.37
Bancorp Zion - Zion - 0.42
JP Morgan Chase - JPM - 0.45
PNC Financial - PNC - 0.45
BB & T - BBT - 0.45
Huntington - HBAN -00:48
Suntrust - STI - 0.54
Bank of America - BAC - 0.55
U.S. Bank - USB - 0.60
Wells Fargo - WFC - 0.64
And again, if you have friends or relatives, the Bank in one of the institutions where this information, please have it immediately.
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