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 Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.