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FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!

 
Cyndexia
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11/28/2009 08:40 PM
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FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
U.S. banks are earning money again, but they're writing fewer business loans, threatening a fragile economic recovery.
The Federal Deposit Insurance Corp. reported Tuesday that U.S. bank loans fell by $210.4 billion or 2.8% during the third quarter the biggest drop since the FDIC started keeping records in 1984. Banks booked $2.8 billion in third-quarter profits, reversing a second-quarter loss of $4.3 billion. "We need to see banks making more loans to their business customers," says FDIC Chairman Sheila Bair. "This is especially true for small businesses."

Loans to businesses fell 6.5%, and real estate loans plummeted 8.1%.

"Until small businesses are able to borrow, we can't have a robust economy, because that's your largest source of jobs," says Richard Posner, a law professor at the University of Chicago and a federal circuit judge. The Small Business Administration has said that small businesses created 64% of new jobs in the past 15 years.

Banks are reluctant to make new loans until they've cleared off the bad ones they made during the housing boom. Back then, they paid "insufficient attention to certain kinds of risky loans," says Edward Kane, finance professor at Boston College. "You can't expect them to turn around and turn the lending machine back on."

Non-current loans rose more than 10% during the quarter to $366.6 billion or nearly 5% of all loans, the highest rate on record. Banks charged off nearly $51 billion in bad loans last quarter, the 11th straight quarterly increase and up more than 80% from a year earlier. "Loan losses will continue to climb as long as foreclosures keep rising and homeowners, builders and developers continue to hurt," says Kate Monahan, banking analyst at Aite Group.

Banks don't expect things to get better anytime soon: Two out of three banks set aside more reserves for losses during the quarter, reserving a total of $62.5 billion, 22% higher than last year. Banks are hoarding money in super-safe Treasury securities, and, "Businesses were not as eager to take on debt," says FDIC chief economist Richard Brown.

[link to www.usatoday.com]
"Sometimes the object of the Journey may not be the end, but the Journey itself"


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ANNONYMOUS
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11/28/2009 08:44 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
bump

For a good read!
Cyndexia  (OP)

User ID: 744081
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11/28/2009 08:48 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
bump

For a good read!
 Quoting: ANNONYMOUS 825313

Thank You
hf
"Sometimes the object of the Journey may not be the end, but the Journey itself"


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Anonymous Coward
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11/28/2009 08:52 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
Why lend money?
The Fed is paying these banks interst to sit on it.
If they wanted the banks to lend they would not give them incentive to hold it.

Complete proof this is by design.
Anonymous Coward
User ID: 503157
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11/28/2009 08:52 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
U.S. banks are earning money again, but they're writing fewer business loans, threatening a fragile economic recovery.
The Federal Deposit Insurance Corp. reported Tuesday that U.S. bank loans fell by $210.4 billion or 2.8% during the third quarter the biggest drop since the FDIC started keeping records in 1984. Banks booked $2.8 billion in third-quarter profits, reversing a second-quarter loss of $4.3 billion. "We need to see banks making more loans to their business customers," says FDIC Chairman Sheila Bair. "This is especially true for small businesses."

Loans to businesses fell 6.5%, and real estate loans plummeted 8.1%.

"Until small businesses are able to borrow, we can't have a robust economy, because that's your largest source of jobs," says Richard Posner, a law professor at the University of Chicago and a federal circuit judge. The Small Business Administration has said that small businesses created 64% of new jobs in the past 15 years.

Banks are reluctant to make new loans until they've cleared off the bad ones they made during the housing boom. Back then, they paid "insufficient attention to certain kinds of risky loans," says Edward Kane, finance professor at Boston College. "You can't expect them to turn around and turn the lending machine back on."

Non-current loans rose more than 10% during the quarter to $366.6 billion or nearly 5% of all loans, the highest rate on record. Banks charged off nearly $51 billion in bad loans last quarter, the 11th straight quarterly increase and up more than 80% from a year earlier. "Loan losses will continue to climb as long as foreclosures keep rising and homeowners, builders and developers continue to hurt," says Kate Monahan, banking analyst at Aite Group.

Banks don't expect things to get better anytime soon: Two out of three banks set aside more reserves for losses during the quarter, reserving a total of $62.5 billion, 22% higher than last year. Banks are hoarding money in super-safe Treasury securities, and, "Businesses were not as eager to take on debt," says FDIC chief economist Richard Brown.

[link to www.usatoday.com]
 Quoting: Cyndexia



Thanks for the report.

also saved your statment

"Sometimes the object of the Journey may not be the end, but the Journey itself"

Cyndexia

on my PC. very true...........
Anonymous Coward
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11/28/2009 08:55 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
At the same time, GOVERNMENT LOANS, aka debt, has increased by unlimited amounts!
Cyndexia  (OP)

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11/28/2009 09:00 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
Thanks for the report.

also saved your statment

"Sometimes the object of the Journey may not be the end, but the Journey itself"

Cyndexia

on my PC. very true...........
 Quoting: Anonymous Coward 503157

Your Very Welcome and pass along the Statement.... hf
"Sometimes the object of the Journey may not be the end, but the Journey itself"


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Cyndexia  (OP)

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11/28/2009 09:02 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
Why lend money?
The Fed is paying these banks interst to sit on it.
If they wanted the banks to lend they would not give them incentive to hold it.

Complete proof this is by design.
 Quoting: Anonymous Coward 743646

You have hit the nail on the head....
I thought this too when I read this article.
America has always flourished with the small business owners. Now we will all work for the government....
Very Sad
"Sometimes the object of the Journey may not be the end, but the Journey itself"


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Anonymous Coward
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11/28/2009 09:04 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
Why lend money?
The Fed is paying these banks interst to sit on it.
If they wanted the banks to lend they would not give them incentive to hold it.

Complete proof this is by design.
 Quoting: Anonymous Coward 743646


Yep. The Fed 'loans' banks billions at zero percent interest. Then the banks 'buy' Treasuries that pay 2-3%. Nothing but profit. No risk. The US gov't gets buyers for debt. The farce continues.
Cyndexia  (OP)

User ID: 744081
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11/28/2009 09:07 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
Why lend money?
The Fed is paying these banks interst to sit on it.
If they wanted the banks to lend they would not give them incentive to hold it.

Complete proof this is by design.


Yep. The Fed 'loans' banks billions at zero percent interest. Then the banks 'buy' Treasuries that pay 2-3%. Nothing but profit. No risk. The US gov't gets buyers for debt. The farce continues.
 Quoting: Anonymous Coward 829405

It has been rumored in the Real Estate community (yes I am an agent) that the Feds will open the loan doors again for homes the same way that they did before the bust happened. There intention is to jump start the Real Estate boom again before the 2012 election for Obama.
So that his Looking Good Looks Good......

Problem is 5 years from now this shit that happened now will look like a picnic at the park compared to the damages we will see ahead.....
"Sometimes the object of the Journey may not be the end, but the Journey itself"


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Anonymous Coward
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11/28/2009 09:12 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
All the banks are setting around the poker table called the stock market. Playing with our (bailout) money and we are left outside looking through the window. There is going to be a day in America when you won't want to be a banker.
Anonymous Coward
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11/28/2009 09:12 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
Why lend money?
The Fed is paying these banks interst to sit on it.
If they wanted the banks to lend they would not give them incentive to hold it.

Complete proof this is by design.


Yep. The Fed 'loans' banks billions at zero percent interest. Then the banks 'buy' Treasuries that pay 2-3%. Nothing but profit. No risk. The US gov't gets buyers for debt. The farce continues.
 Quoting: Anonymous Coward 829405



When I try to explain this mess to my sheeple friends/family this is the point I stress.

Simple and easy to understand.
Cyndexia  (OP)

User ID: 744081
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11/28/2009 09:17 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
All the banks are setting around the poker table called the stock market. Playing with our (bailout) money and we are left outside looking through the window. There is going to be a day in America when you won't want to be a banker.
 Quoting: Anonymous Coward 793891

applause2
"Sometimes the object of the Journey may not be the end, but the Journey itself"


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Cyndexia  (OP)

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11/28/2009 10:14 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
At the same time, GOVERNMENT LOANS, aka debt, has increased by unlimited amounts!
 Quoting: Anonymous Coward 829394

"Sometimes the object of the Journey may not be the end, but the Journey itself"


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Dirtfarmer

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11/28/2009 10:30 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
Another good reason if you are a small business owner to operate with cash, and not rely on credit.
How fortunate for governments that the people they administer don't think.
Adolf Hitler

When the government fears the people there is liberty; when the people fear the government there is tyranny.
Thomas Jefferson

"Expose yourself to your deepest fear; after that, fear has no power, and the fear of freedom shrinks and vanishes. You are free." Jim Morrison
Cyndexia  (OP)

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11/28/2009 10:44 PM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
Another good reason if you are a small business owner to operate with cash, and not rely on credit.
 Quoting: Dirtfarmer

I agree with that.....
But the bankers made so much money off the backs of the small business owner with credit that the business owners became reliant on loans to get them thru the tough times.
"Sometimes the object of the Journey may not be the end, but the Journey itself"


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Cyndexia  (OP)

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11/30/2009 11:59 AM
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Re: FDIC Reports Biggest Drop for Business Loans on Record!!!!!!!!!!
bump
"Sometimes the object of the Journey may not be the end, but the Journey itself"


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