The major business press underplays news from the FDIC that its troubled-banks list soared to more than 550 in the third quarter. The FDIC now considers seven percent of all banks in the U.S. “troubled.” And that number’s growing rapidly—by 33 percent from the second quarter.
But The New York Times stuffs it on B4 and The Wall Street Journal buries it on A10. The Washington Post gives it 385 words on A14. The Financial Times, for which 385 words is approaching thumbsucker length, puts it inside, but gives it 499. So mixed signals from them.
This is a big story. Troubled banks hit a 16-year high last seen in the wreckage of the S&L Crisis. And it comes at a time that banks are failing in droves. Fifty failed last quarter, the worst since 1992. The FDIC’s reserves are in the red, also for the first time since 1992, meaning as Louise Story says in an NYT podcast, “they’re overdrawn.” And banks are lending less—much less. Loans fell in the third quarter faster than at any time on record (which only goes back to 1984). Meanwhile, the troubled loans and leases hit a 26-year high. The arrows are all pointing the wrong direction.
Take that story and stuff it inside!
It’s hard to tell if this a case of crisis fatigue or what, but these numbers sound like deep doo-doo to The Audit.
Ryan, we at the Huffington Post thought it was big news, and we played it high (top splash on the front page). The story got 3,400 comments. Here's a link:
http://www.huffingtonpost.com/2009/11/24/in-crazy-new-landscape-fo_n_369177.html
Thanks,
Shahien
#1 Posted by Shahien Nasiripour, CJR on Wed 25 Nov 2009 at 03:43 PM
Thanks for pointing this out, Shahien. I think there's a lesson in here on connecting with readers. 3,400 comments for you guys, 34 for The Wall Street Journal's.
#2 Posted by Ryan Chittum, CJR on Wed 25 Nov 2009 at 06:13 PM
The alternative press and related critics -- Huffington Post, Salon, Dollars & Sense, Democracy Now, FAIR, and others -- have been canvassing this for over a year and the CJR is only now figuring out that the Times, Post, Journal and others are burying the story?!
#3 Posted by Hugh Sansom, CJR on Wed 25 Nov 2009 at 10:36 PM
It should also be mentioned that the FDIC is in the red and that premiums have to be raised for the good banks because of the behavior of bad banks.
http://www.npr.org/blogs/money/2009/11/fdic_in_the_red.html
And because the banks lobbied to prevent the FDIC from collecting its premiums for the last decade.
http://www.boston.com/news/nation/washington/articles/2009/03/11/now_needy_fdic_collected_little_in_premiums/
Banksters. The press should start using the word.
#4 Posted by Thimbles, CJR on Wed 25 Nov 2009 at 10:49 PM
Well Said! And I think the news is worse. I think there are 100's of banks that the FDIC knows are going under. Why don't they take them over? Because they cant find banks that want their deposit base, branches and certainly not their loan portfolio. What's the FDIC to do?
#5 Posted by Say What, CJR on Thu 26 Nov 2009 at 01:36 AM
Why don't they take them over?
Because, for a vast amount of Americans who get spastic over Palin book signings and Pimp my Community Association videos. Nationalization sounds too much like National Socialization. The two would get confused and the masses would rise up to defend the bankers that ripped them off because Hilter had banks too or something.
Plus, Obama is a jerk. He wants to put his good buddy Jamie Dimon in charge of the Treasury. I have no idea why he loves the progressives so little and loves free market hacks who put the global economy into a swan dive so much, but it is what it is.
Whatever happens to the economy and the banks, don't blame us libs and leftists.
He doesn't listen to us AT ALL.
#6 Posted by Thimbles, CJR on Thu 26 Nov 2009 at 12:44 PM
Ryan,
See Reggie at http://boombustblog.com/ you will be in for a real eye opener as to the financial status of our banks.
#7 Posted by Scott Carlo, CJR on Thu 26 Nov 2009 at 08:59 PM
Firedoglake does a story which I first heard about on NPR's planet money. Basically, the Obama Admin came out with programs to help home owners keep their houses and negotiate the interest rates on their falling in value homes.
And the Banks are making this program very hard on people:
http://firedoglake.com/2009/11/29/predatory-lending-has-an-ugly-tail-end/
She also accuses the NYtimes of burying the lead.
The response to this is that home owners are becoming more angry at banks and, more importantly, judges are becoming more angry at banks.
From many I've read don't pay your spiraling upward mortgage on a spiraling downward house. Some are saying walk away. others are saying squat and make the bank produce the documents which say WHO OWNS THE LOAN?
And if they don't have them, judges have been free about canceling the outstanding debt altogether
#8 Posted by Thimbles, CJR on Mon 30 Nov 2009 at 01:34 PM