IMF Says Credit Crisis Threatens Economy

[mimo_100]

IMF Says Credit Crisis Threatens Economy

http://biz.yahoo.com/ap/080408/imf_economic_forecast.html


"… The U.S. mortgage and credit crises could cause almost $1 trillion in financial losses, the IMF said …"

I do not know the percent of total loans that the “typical” bank has on the books that are uncollectable. But it seems to me that the typical bank would be able to survive if, say, 10% of their loans went sour. So what is the big deal?

[billyjoe]

mimo,
In my part of the state the small hometown banks seem to have sold most of their mortgages to....... in my county Deutsche Bank and Wells Fargo. A vast majority of the foreclosure sales here are from those 2 banks. Multiply those many 6 figure losses by 88 (counties in Ohio) and they're losing billions in Ohio alone not to mention the other 49 states. Maybe the IMF is counting on a major trickle down effect that eventually reaches the local banks, but as you say the little guys seem not to be getting hit too bad so far.

-------------billy

[riverbabe]

National City Bank's in real trouble over the mortgages. They are looking for a buyer. Fifth Third Bank appears interested. Thumbing nose at KeyBank.

[billyjoe]

River,
Did I read in The Plain Dealer that Natl City was valued at 130billion and would sell for 1/2 that or less? My cousin is a corporate pilot for Key Bank. He tells the story of flying one of the big shots to Europe, a few months later the ex big shot was indicted for imbezzling something like 14 million. They have a nice hanger from another failed company bought dirt cheap at Hopkins Airport We toured one of the new jets and had to take our shoes off so as not to disturb the carpeting. Never flew in it but the kids got their pictures taken at the controls.

--------------billy

[riverbabe]

River,
Did I read in The Plain Dealer that Natl City was valued at 130billion and would sell for 1/2 that or less? My cousin is a corporate pilot for Key Bank. He tells the story of flying one of the big shots to Europe, a few months later the ex big shot was indicted for imbezzling something like 14 million. They have a nice hanger from another failed company bought dirt cheap at Hopkins Airport We toured one of the new jets and had to take our shoes off so as not to disturb the carpeting. Never flew in it but the kids got their pictures taken at the controls.

--------------billy

I just love your stories! They make me smile.

[mimo_100]

How does a bank determine how much money they can loan? Do they loan vs. savings deposits? At what point do they stop loaning first mortage money since it becomes reckless? Is there any federal law that legislates a ceiling on total loan portfolio?