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Colonial BankGroup Faces Federal Investigation, FDIC To Be Appointed Receiver Shortly
The semi-too big to fail are starting to do just that. Earlier, the bank filed an 8-K disclosing that it was the "target of a federal criminal investigation relating to the Company's mortgage warehouse lending division and related alleged accounting irregularities. The Company has been informed that the alleged accounting irregularities relate to more than one year’s audited financial statements and regulatory financial reporting." Also, "earlier in 2009, BancGroup provided documents to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) in response to a subpoena issued by SIGTARP" and "the SEC has issued subpoenas to BancGroup seeking documents related to, among other things, BancGroup’s disclosures related to its participation in the U.S. Treasury Department’s Troubled Asset Relief Program and BancGroup’s disclosures respecting accounting for loan loss reserves. BancGroup has provided, and continues to provide, documents in response to these subpoenas."
Lastly, one has a pretty good advance look on today's FDIC Failure Friday compliments of the last bit of disclosure in the 8-K:
"On August 5, 2009, the Alabama State Banking Department provided notice to Colonial Bank that the Alabama State Banking Board will meet on August 12, 2009, at which time Colonial Bank will be asked to consent to the Superintendent’s exercise of his statutory authority to appoint the FDIC as receiver or conservator for the Bank if and when the Superintendent deems such appointment to be necessary. In the meantime, the Company continues to explore all possible capital-raising alternatives that would position it and Colonial Bank to comply with the requirements of the Orders to Cease and Desist to which they are subject."
A cursory glance at Colonial's most recent balance sheet indicates $26.4 billion in assets, and $20.2 billion in total deposits. There goes the FDIC's Deposit Insurance Fund. But at least the 247,000 people who are no longer employed are buying up any and all related stocks.
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Just tying to lighten it up a little
I have been a member of this blog for 4 weeks and 20 hrs at this writing. I have learned a great deal from the people who are active bloggers on this site. There is so much to learn about the topics of the blogs. A technique I used in college to test my retention skills of new words, ideas and theories was to write short papers using all of the new things I had heard.
Here is a sample.
The end of another exhausting week, Mr. Durden had laid a bevy of new words and graphs on me and for days my mind had been reeling like a Zebco 101 with a 10 pound bass on board. Cheeky Bastard trashed two of my best blogs and Debt Bitch threatened to come to my house and stomp my geeky buttocks into the next depression if I ever commented on one of her blogs again. I feel like I have been hung from the rafters and beaten with a baseball bat.
I shuffled into my favorite watering hole, The Dark Pool. My longtime buddy Flash was working behind the bar. Flash has always been good to me. He would hold up other orders just to fill mine. I always ordered straight through him indirectly. He served up my usual 101 over ice.
The regular crowd was in. The intrinsics were hovering at the corner booth pointing out possible critical support opportunities. Old man Skew was sitting alone, tighter than Dick’s hatband. The Quant girls were pretty well lit up. They were laughing into their hands as they categorized the guys into what ever categories women put men into. The fembots were sitting at the EXHVOL table gazing into each others eyes and twisting their bangs. I took a look at the finger food trough. The spread was mixed-less systemic and more idiosyncratic at the end.
I went back to my perch; the quant girls had called me a birdbrain. There were three new patrons sitting at the bar, a woman named Dxy and her two friends Bea and Vix. Bea and Vix were girlfriend/ boyfriend. We talked for a while. I was getting sea sick from Vix constantly getting up and down for no apparent reason. It was like he was on coke for the first time. And Bea, the woman never shut up. She just went on and on about indicators of reality and the need to be flexible in our methods of description to simple folks on how we interpret the meaning of our experiences. They finally went and sat at the volatility table with the fembots.
I turned to Dxy. I asked her what she had been doing lately. She said mostly going down. I said that is too bad. How long has she been going down? She gave a big sigh and said it began in early 2002, but with the help of a lot of her friends she was able to hide it. I was real popular in 2005 and 2006- everybody wanted me she said. But it was just a dream, like being in a bubble bath all year long. Now no one wants me now. No one with any sense anyway.
lol
you forgot. The Anonymous stole your wallet while you were engaging people with an identity.
Good stuff.. Just be glad Marla did not wander into your bar - err...story - and well I'll let you finish that what if
Pete
Dear Waterdog: I am not! Bea
Dear Waterdog: That's actually a southern name, Sweet Cheeky Bastard. Like Bobby Jo McAlister. You say, "Bobby Jo" or "Sweet Cheeky".
WAAAAAAAAA
lol ... awesome ... thank you for mentioning me ...
He said during his speech at the awards ceremony.
Write a book.....just don't try to be 100% factual:)
So good, I had to read it twice. Well Done
let's make soap and prepare.
Pretty soon, Colonial will be like AIG - claiming record profits w/in a few months time.
Too stupid to exist = Too big to fail.
Sorry:)......i'm too stupid to exist, should i fail?
NBER says recession may have ended in July
(political pressure to make such a call so early)
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTtraQnso0YU
(and I am getting tired of the CAPTCHA math - while trying to trade and share what I hear or see on the finanical networks the last thing i need is to bring out my grade five arithmetic book) F CAPTCHA
create an account
And the "needed process of consolidation" of the regional powers into the TBTF institutions continues apace.
I am sure that JPM is looking for additional market penetration in the south.
What a bunch of kleptocratic funded, oligopoly fueled mayhem.
What's the over/under on bank failures today?
3 - same as last week. Over's won with 4.
I will again say 17 so it will be the over!
Seems Colonial and Guaranty are getting special treatment to avoid FDIC insolvency headlines. TD, those 247,000 newly unemployed aren't buying stocks.
NEW YORK, Aug 7 (Reuters) - Mohamed El-Erian, chief executive of bond fund manager Pacific Investment Management Co, said on Friday that U.S. stock markets are on a "prolonged sugar high" and that the bull market is unlikely to last.
http://www.reuters.com/article/bondsNews/idUSN0740965820090807
Hell and all this time I thought it was just good old fashioned market manipulation.
The sugar high was over mid-last month. This is the IV-connected drip meth high.
well he's right about the sugar - 28 year highs on the soft
almost time to short it.
Some overtime for Shiela Bair this weekend. Lookout for 5 more bank failures. O yeah, that is good news.
At least. And people used to look forward to Friday afternoons during the summer.
Outstanding Waterdog!
I laughed; I cried; It became a part of my Life.
SB.V09.E
http://www.reuters.com/article/bondsNews/idUSN0740965820090807
I'll be damn no wonder the price of sugar is going parabolic.
LOL
what are the odds anyone in msm even mentions that the fdic is out of money. Sure, congress will not allow that to last, but I think its pretty funny no one is even watching.
Congress is out of session now, which is ominous considering they would need to vote on a FDIC funding increase wouldn't they? If that is the case, they might be heading for the hills and we might be heading for a banking holiday?
don't they have a $500b unfunded line of credit from treasury?
GS Share in RED TANKING NOW!!! Its a leading indicator!!! Get your short orders ready guys!!!
GS shorts its own stock. I am neo. I know.
It's Friday! Time for Goldman Sachs employees to kill puppies with claw hammers.
can you post the latest bank failures graph? You had one up a few weeks ago that was showing an upward slope. is that continuing to grow?
http://www.fdic.gov/bank/individual/failed/banklist.html
Stunning headline from MSM:
Too much rally, too soon?
Love you guys, you brighten my day. If i ever make a profitable trade that exceeds my cost of being stupid, then ZH will get a cut! (all in cash now so Tyler starves:))
Ever been to a fish farm? The rest is redacted because it might recriminate the author:)
The Colonial failure should cost the FDIC insurance fund between $8-10 Billion. That's no problem since Congress gave them a $500 Billion line of credit - more than enough to carry them through the end of 2009.
BTW. Colonial got in trouble because mortagage securitizers stopped buying the crummy Florida loans originated by Colonial's "warehouse facility." Looks like these loans were not only poorly underwritten but also fraudulent.
Makes me wonder if the securitizers knew that the loans were fraudulent but only stopped buying when the MBS/CDO market collapsed.
Wooops! Colonial is just the tip of the iceberg.
Lewis Black said it best when I saw him last year some time in between binges and blackouts:
"Take people that can't even pay their rent and ask them: "do you want a mortgage? They shake their heads and blither (as only Lewis can accurately mimic) and say: "Sure!""
That was a slow pitch over the middle of the plate. The question is who wants to buy their crap? Look at the 8K and pity the poor fool (whoops that could be us the taxpayers!) who eats 66.7% of their business which just happens to be down here in the Sunforeclosure State.
This one will leave a mark. Add in Corus and Guaranty and we're talking another crater.
Good thing the recession is over!
Looking at the link to the financials, the loan loss provision for the current statement wiped out current year earnings and put retained earnings into a deficit. There could be more but I only spent five minutes looking at the report.
Was any fraud alleged or just bad fortune?
Please excuse me. That link goes to a 3/31 dated statement. I can only assume things are worse now, and they were bad then. Glad the fed can help out with a printing press. In Monopoly, would this be "Bank Goes Broke. Sell 4 Hotels" Except in real life the hotels would go for 30 cents on the dollar due to hedge fund gouging and the fact nobody is going anywhere now?
It is characterized as a criminal investigation
these stupid 'regulators' are so incompetent, just like TV clowns from CNBC.
while FDIC is trying to keep those 500 problem banks afloat, management of those banks just keep funneling money to their cronies.
short the stock market hard
19 banks failed in July. Since the recession is over probably only 30 or so will fail this month.
http://www.fdic.gov/BANK/HISTORICAL/BANK/index.html
Evan says hi
http://www.ocala.com/article/20090803/NEWS/908039996/1406/NEWS?Title=FBI...