Whoa! List of Problem Banks Grows Even With Solid Net Income


Inquiring minds are looking on with concern as CNBC.com reports that the list of problem banks grows despite solid net income:

The FDIC says its list of troubled banks rose to 860 in the July-September quarter from 829 in the previous quarter.

At the same time, the FDIC says banks earned $14.5 billion during the third quarter. That was a decrease from the previous quarter’s result of $21.4 billion, but well above the $2 billion banks earned a year earlier.

And as forecasted:

The amount of bad loans, those 90 days or more past due, declined for the second consecutive quarter, the agency said in its latest quarterly report. The balances for these loans declined by 2.1 percent, or $8.3 billion, in the third quarter.

And why wouldn’t the number decline? Once again, remember the ‘two humped’ camel:

It is unbelievable that these bankers and regulators are so myopic that they don’t see the next wave coming. It can even be seen now in the newest foreclosure data. Unfortunately, since this scenario has never happened before, these fools ‘don’t see it’. They are fighting yesterday’s war instead of learning about today’s enemy.

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