The widespread discussion of the subprime mortgage lending market is
bordering on obsession today, so I thought I'd throw in a few numbers from
the Federal Deposit Insurance Company (FDIC), which knows a thing or two
about the state of the U.S. banking industry.
Each quarter, the FDIC discusses is "Problem List," which reflects those
banks that the FDIC sees as having difficulties. In the FDIC's latest
Quarterly Banking Survey for the end of September 2006, the FDIC notes that
there were 8,743 insured institutions reporting results down from 8,778
reporters as of June 30.
No FDIC-insured institution failed during the
quarter, extending the record-setting streak of no failures to nine
quarters. As a further sign of industry health, the number of institutions
on the FDIC's "Problem List" declined from 50 to 47, and assets of "problem"
institutions shrank from $5.5 billion to $4.0 billion. Both the number and
assets of "problem" institutions were at historical lows.
To add to this, the FDIC notes that banks were very well capitalized, saying
that noncurrent loans measured just 0.70 percent of total loans, the lowest
such ratio in the 22 years these data have been collected. 1 At that same
date, the industry's Tier 1 Risk Based Capital Ratio was 10.72%, near a
historic high for this ratio. In addition, no FDIC-insured institution has
failed in over two years -- the longest such period in the FDIC's history.
P.S. Will you be there when Cramer makes his next move?
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Tony Crescenzi Blog Natural Gas Draws More Than Expected 2/8/2007 10:48 AM EST Total working gas is within the five-year historical range.Plus additional details from the Energy Information Agency.
Tony Crescenzi Blog Wholesale Inventories Plunging 2/8/2007 10:24 AM EST Businesses are cautious about production schedules.
Tony Crescenzi Blog Construction Job Losses Offset in New Data 2/8/2007 9:15 AM EST The absence of any material effect from the slowdown in thehousing sector is most interesting.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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