Where have all the banks gone?
Source: George Ure's "UrbanSurvival"
http://www.urbansurvival.com/week.htm
Precise Thinking Dept: Meantime, Back in the Depression
In case you're still skeptical of my assertion that the US is in a replay of the first Great Depression and is presently in the grips of Depression #2, I'd offer as confirmation the report from the FDIC that three more banks failed this week.
America West Bank, Layton, UT
Citizens Community Bank, Ridgewood, NJ
Silverton Bank, N.A., Atlanta, GA
Something that slapped me 'upside the head' this morning while discussing this with Zeus the Cat: when people talk about the bank failures of the 1930's Depression, I seem to recall that branch banking was not as highly developed an art form as it is today, so I've decided to do a little analysis of this for Peoplenomics subscribers (in addition to the piece on computational democracy) this weekend.
But just to show you what I mean, a check of the FDIC press releases reveals that that a lot more 'banking surface' was closed that just saying "three banks closed this week".
For example, America West Bank in Utah, we read in the government's press release had three offices.
I'll admit that Citizens Community in New Jersey was a single office operation. But, on the other hand, Silverton Bank National Association had six offices and had 1,400 client banks in 44 states.
Add up the number of bank branches and we find that 10 offices closed this week, which in case you're thinking "Gee, ten banking centers closing sounds a lot more grim than 3 banks closing, doesn't it.
Not to put too fine a point on it, but if this (admitted too small to be meaningful) sample reveals that an average of 3.33 office per closing has been taking place, then the 32 "bank closings" so far this year might imply something like 106 offices closing down this year, we could be on track to see more than 300 bank offices close this year. But wait! How do we calculate the equivalency of ATM's closing to bank closings in the Depression? Moreover, what's the equivalent of online banking sessions...they are after all bank faces right? Things you do online now had an analog (in some cases) in the 1930's - it's just that you'd have gone physically into the bank to do them.
Granted, that doesn't come near the 9,000 banks that had failed in 1932-1933 in the first Depression, I'd argue that at least several of the super banks of today which have gone to the federal teat to stay alive would have closed or failed without government intervention. In which case, at least from where I sit, it sure looks like a rhyme off the 1930's event.
Is my assertion wrong? As a taxpayer, how do you feel about the possibility of another $10-billion going to Citi? That'd be (at one point) 1,400 branches and 3,800 ATMs and Lord knows how many ATM's. And what about those 1,400 client banks of Silverton?
Now you know why some of these banks are too big to fail? Because it would confirm the second depression so instead, we'll just print up some more 'assets' for 'em.
Next time someone says "This isn't another Depression because not too many banks have failed by comparison..." look 'em in the eye and ask "How many billions do we have to fork over from the public coffers to count as a bank failure?"
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