BIG DEPOSIT: This could end up as one of the largest suburban leases of the year, but it can't be good. The Federal Deposit Insurance Corp. has leased 150,000 square feet, the entire building, at the Woodfield Corporate Center, 200 N. Martingale in Schaumburg. The federal guarantor of bank accounts needs what it calls a "temporary Midwest satellite office" as it processes receiverships and asset sales involving Midwestern banks. The FDIC said it will move in beginning in March and that the office will have up to 500 workers(Schaumberg just outside of Chicago, to the northwest). It doesn't take a genius to read into the meaning of this. I think we can expect a surge in bank failures throughout the rust-belt region this year. If you keep more than a checking account with enough money to pay your bills each month, it would probably be a good idea to either move your money to a too-big-to-fail bank or, even better, pull your money out and buy gold and silver bullion with it.
A reader in the comment section inquired about other FDIC "satellite" offices that have been opened: "The FDIC has similar offices in Irvine, Calif., and Jacksonville, Fla., and the number of bank failures in those states picked up dramatically after the FDIC opened those quarters. Here's the link from the Chicago Tribune: LINK
This also means that we can expect the FDIC to receive massive funding from Banana Ben's printing press via the U.S. Treasury.
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Dave,
ReplyDeletethis is the worst headline I have seen in some time. If extend and pretend cannot keep these banks open.......
Actually, and this comes from someone who is a senior officer and director of a regional bank out here, what is happening is that the FDIC goes into a situation, forces closure and let's a 2-big-fail cherry pick the good assets, while the FDIC aka the Taxpayer takes on the shit.
ReplyDelete...these banks should be tanked anyway, but the FDIC should be set up to take on the good assets as well. The Taxpayer should not pay the bill for shitty business loans made by overpaid retards.
ReplyDeleteNo doubt there is an impending avalanche of midwestern bank failures.
No doubt this is not good news, but do we have any perspective to compare this FDIC site to? Where are the other major FDIC offices and how big are they? Those seem like important things to understand to truly see the impact this will have.
ReplyDeleteGood point. See the addition to my post.
ReplyDeleteapparently there is around 150 million sq feet of indl space available in chicago area (heard that from commercial realtors) -
ReplyDeleteso i hope the fdic got a good lease rate.
we all know the issues of cre valuation and that banks have not taken the hit yet. On the other hand, the smaller banks which are effectively more closely held--they, or some, are more cautious of how they lend money so I expect a mixed bag on this front.
still, Illinois, Michigan, Ohio and Wisconsin --state and local govts cutting back so I do not see a bottom here yet.
perhaps one day we wake up and magically the bottom has been put in.
I was at a steakhouse near O Hare for dinner last night--pretty crowded and hte bucks were flowing--inside that oasis you would not think things are tough.
But 2 hotels nearby--one closed down and the other in BK. And stories all over the place about the others.
The FDIC guarantees deposits to 250k.
ReplyDeleteStay away from the TBTF banks unless you're above the insurance limit - as a social statement if nothing else.
Agree about buying gold and silver though.
Overall I agree. But first, the FDIC $250k level is not necessarily permanent, although it's looking like it might stay there for a long time. And agree on the principle of not keeping money at TBTF banks.
ReplyDeleteHowever, at some point, there will be so many banks tanking that it might take some between when your bank tanks and when you get access to your money there. During the S&L crisis, a lot of people had to wait as long as 1 1/2 years to get their FDIC insured money.
If you are in a high-risk area like the rust-belt, you might be better off having your money in a bank you know won't be closing any time soon.
Dave and Anon,
ReplyDeleteGreat catch and follow up I never would have come across this, thanks for the great work.
gyc, you know what they say..."a day without reading Midas is like having to listen to the Super Bowl on the radio"
ReplyDeleteNo. Even better: A day w/out reading Midas is like taking a Vancouver luge run without a helmet.
ReplyDeleteIt looks like the longs are getting sucked in just in time for op-ex. Same drill every time. One would think the longs would do like Dan Norcini said and stand for delivery to force the shorts hand. Why do you think they never do?
ReplyDeleteJoe M.
"Hope" springs eternal. "Hope" got an incompetent, corrupt liar elected President
ReplyDeletejust plain conspiratorial drivel from Dave. FDIC covers up to $250K. Fear always sells doesn't it Dave.
ReplyDelete