So you believed that the banks which are making money by being in the business of money are the safest bet in the stock markets for investments? Think again. In just first 8 months of 2008, there are as many as 11 banks which have closed down. Below we provide a consolidated list of US based banks which closed down or failed, due to the credit crisis or other factors. The latest 2 to add to the list of these existing 11 closed banks are Wall Street biggest investment banks: Lehman Brothers filed for Bankruptcy & Merrill Lynch which is sold out to Bank of America .
Below is the list of US Banks which closed down in 2008:
Silver State Bank
Henderson, Nev.
Closed: Sept. 5, 2008
Assets: $2.0 billion
Cost to FDIC: $450 - $550 million
Integrity Bank
Alpharetta, Ga.
Closed: Aug. 29, 2008
Assets: $1.1 billion
Cost: $250 - $350 million
The Columbian Bank and Trust
Topeka, Kan.
Closed: Aug. 22, 2008
Assets: $752 million
Cost: $60 million
First Priority Bank
Bradenton, Fla.
Closed: Aug. 1, 2008
Assets: $259 million
Cost: $72 million
First Heritage Bank & First National Bank of Nevada
Closed: July 25, 2008
Costs: $862 million
First Heritage Bank
Newport Beach, California
Assets: $254 million
First National Bank of Nevada
Reno, Nev.
Assets: $3.4 billion
The costs of the two banks were combined since both are units of First National Bank Holding.
First Integrity Bank
Staples, Minn.
Closed: May 30, 2008
Assets: $54.7 million
Cost: $2.3 million
ANB Financial
Bentonville, Ark.
Closed: May 9, 2008
Assets: $2.1 billion
Cost: $214 million
Hume Bank
Hume, Mo.
Closed: March 7, 2008
Assets: $18.7 million
Cost: Not Available
Douglass National Bank
Kansas City, Mo.
Closed: Jan. 25, 2008
Assets: $58.5 million
Cost: $5.6 million
Friday, July 10, 2009
Wednesday, July 8, 2009
Fin Min: Choppy Crude Spoils India's Fuel Reform Hope
NEW DELHI -- India's plan to roll out economic reforms remains intact, but volatile global crude prices are limiting efforts to deregulate local fuel prices, Finance Minister Pranab Mukherjee said Wednesday.
Monday's federal budget - which projected a record deficit, leaned heavily in favor of spending to spur domestic demand and shied away from large reforms - was poorly received by financial markets.
Investors hoped the newly elected government would use its strong victory in May's election to push through long-stalled reforms to attract foreign investment, while putting a lid on borrowing.
However, Mr. Mukherjee said the budget was not the government's only option for introducing economic reforms.
"The Union Budget is not the only instrument available to the government to outline reform initiatives," Mukherjee told the UTVi television channel in an interview.
He said the government was waiting for global crude oil prices to stabilize before beginning to align local and global fuel prices.
Nymex-traded crude's August contract was at $62.24 a barrel, its lowest level since May 26, after posting the largest quarterly percentage gain in the second quarter since July-September 1990.
Currently, India subsidizes state-run fuel retailers, who must sell their products at a discount to the prevailing global price.
High subsidy payouts in the form of oil bonds and fertilizer bonds blow a hole in government finances, limiting productive spending.
The government has indicated its willingness to resort to market-driven fuel prices and on Thursday hiked retail diesel and gasoline prices in line with a spike in global crude.
While Mr. Mukherjee raised personal income tax exemption limits to keep more money in the hands of consumers, he didn't change corporate tax rates in the budget.
"This was not the time for making major changes in tax structures," Mr. Mukherjee said in the interview.
However, minor adjustments in the tax structure outlined in the budget will have some "accommodative positive impact" on the corporate sector, he added.
Mr. Mukherjee scrapped the Fringe Benefit Tax - a tax levied on some executive perks - but hiked the Minimum Alternate Tax by 5%.
"If you read between the lines, indications are there that there may be some changes in (corporate and personal) tax structures," Mr. Mukherjee said, without elaborating.
Monday's federal budget - which projected a record deficit, leaned heavily in favor of spending to spur domestic demand and shied away from large reforms - was poorly received by financial markets.
Investors hoped the newly elected government would use its strong victory in May's election to push through long-stalled reforms to attract foreign investment, while putting a lid on borrowing.
However, Mr. Mukherjee said the budget was not the government's only option for introducing economic reforms.
"The Union Budget is not the only instrument available to the government to outline reform initiatives," Mukherjee told the UTVi television channel in an interview.
He said the government was waiting for global crude oil prices to stabilize before beginning to align local and global fuel prices.
Nymex-traded crude's August contract was at $62.24 a barrel, its lowest level since May 26, after posting the largest quarterly percentage gain in the second quarter since July-September 1990.
Currently, India subsidizes state-run fuel retailers, who must sell their products at a discount to the prevailing global price.
High subsidy payouts in the form of oil bonds and fertilizer bonds blow a hole in government finances, limiting productive spending.
The government has indicated its willingness to resort to market-driven fuel prices and on Thursday hiked retail diesel and gasoline prices in line with a spike in global crude.
While Mr. Mukherjee raised personal income tax exemption limits to keep more money in the hands of consumers, he didn't change corporate tax rates in the budget.
"This was not the time for making major changes in tax structures," Mr. Mukherjee said in the interview.
However, minor adjustments in the tax structure outlined in the budget will have some "accommodative positive impact" on the corporate sector, he added.
Mr. Mukherjee scrapped the Fringe Benefit Tax - a tax levied on some executive perks - but hiked the Minimum Alternate Tax by 5%.
"If you read between the lines, indications are there that there may be some changes in (corporate and personal) tax structures," Mr. Mukherjee said, without elaborating.
.S&P: May Lower India Rating If Fiscal Consolidation Delayed
MUMBAI -- Rating agency Standard & Poor's said Wednesday India's federal budget hasn't eased concerns on the government's fiscal deficit and it may lower the country's sovereign rating if fiscal consolidation is delayed.
"We continue to believe that such high levels of government deficits are unsustainable in the medium term, although we weren't surprised by the number itself," S&P said in a statement.
Monday, federal Finance Minister Pranab Mukherjee said that the fiscal deficit for the financial year through March 2010 is likely to be 6.8%, sharply higher than 5.5% estimated in the interim budget in February.
S&P estimates the total deficit of the federal and state governments and after considering off-budget items such as fertilizer and oil bonds to be about 12% of gross domestic product.
India currently doesn't include in the budget the bonds given to fertilizer producers and state-run oil companies to compensate them for selling products below market price.
S&P currently has a BBB- rating - its lowest investment grade rating - on India with a negative outlook. Any downward revision will reduce the rating to junk grade, which will affect foreign investors' interest.
The agency said that it may raise the rating outlook to stable if India achieves fiscal consolidation over the next two to three years.
A strong economic recovery and medium-term growth prospects will help faster fiscal consolidation through higher revenue and lower expenditure growth, it said.
But, higher inflation and interest rates could increase the cost of borrowing and affect the size of deficit.
"A material deterioration in India's strong external position - considered unlikely at this stage - could also put pressure on the ratings," the agency said.
"We continue to believe that such high levels of government deficits are unsustainable in the medium term, although we weren't surprised by the number itself," S&P said in a statement.
Monday, federal Finance Minister Pranab Mukherjee said that the fiscal deficit for the financial year through March 2010 is likely to be 6.8%, sharply higher than 5.5% estimated in the interim budget in February.
S&P estimates the total deficit of the federal and state governments and after considering off-budget items such as fertilizer and oil bonds to be about 12% of gross domestic product.
India currently doesn't include in the budget the bonds given to fertilizer producers and state-run oil companies to compensate them for selling products below market price.
S&P currently has a BBB- rating - its lowest investment grade rating - on India with a negative outlook. Any downward revision will reduce the rating to junk grade, which will affect foreign investors' interest.
The agency said that it may raise the rating outlook to stable if India achieves fiscal consolidation over the next two to three years.
A strong economic recovery and medium-term growth prospects will help faster fiscal consolidation through higher revenue and lower expenditure growth, it said.
But, higher inflation and interest rates could increase the cost of borrowing and affect the size of deficit.
"A material deterioration in India's strong external position - considered unlikely at this stage - could also put pressure on the ratings," the agency said.
Budget 2009: For India to grow, Govt will have to continue spending
7 Jul 2009, ET Bureau
This year’s budget numbers ought to have been printed in red. The fiscal deficit was a huge 6% of GDP in 2008-09 and is slated to go up to 6.8% for
2009-10, the highest ever. Add the states’ borrowing, which is roughly 4% of GDP, and off-budget financing of assorted subsidies, the combined fiscal deficit is likely to be close to 12% of GDP.
Scary? Well, it’s like a shot of brandy for someone who’s come out of rehab for alcohol abuse, but gets caught in a freezing snowstorm: right now, that jolt of liquid fuel is needed, but the patient needs to be swiftly weaned off the stuff. When the global economy still stalls, for India to continue to grow, the government must continue to spend.
The problem is that the government has not indicated how it would bring down the fiscal deficit to 5.5% of GDP next fiscal and 4% of GDP in 2011-12. Talking to ET NOW, the finance minister said that he expects growth and tax reforms to do the trick for him. This is not entirely unrealistic, given that the government gives away 69% of the tax due to it, on account of assorted concessions, bringing down the effective rate of tax barely above half the nominal rate. But such aggressive correction of the tax structure is not envisaged in the medium term fiscal policy projection that tax receipts would go up to 12.4% of GDP in 2011-12.
The government’s response to global developments last year — oil price spikes and, later, financial meltdown and economic slump — led its total expenditure to go up 20% over original budget estimates, even as its revenues fell short of BE levels by 9%. The fiscal deficit for 2008-09 shot up to 6% of GDP, 3.5% higher than the budgeted level. Worse, the revenue deficit, which had shrunk to 1.1% of GDP, shot up to 4.4%. This is slated to go up further to 4.8% of GDP now, thanks to a deliberate decision to lower the Centre’s tax burden on the economy to 10.9% of GDP from 11.6% achieved in 2008-09, to keep the economic momentum going.
Interest payments account for 56% of the projected fiscal deficit. What this brings to the fore is the urgency to speed up disinvestment. While disinvestment works exactly like government borrowing when it comes to mopping up private sector savings and creating a possible liquidity crunch for the private sector in the year in which it takes place, in subsequent years, it would help to bring down interest outgo. And there is the efficiency increase that would be brought about in the running of PSUs that are partly owned by the public.
Pranab Mukherjee’s budgeting is quite conservative. The budget numbers assume a nominal GDP growth rate of 10.8%. Assuming that the economy grows by 7% in real terms, that puts inflation at a meagre 3.8%. The FM could have shown a marginally lower fiscal deficit by assuming a larger nominal growth rate of GDP without losing his moorings in reality. Central government expenditure is now budgeted to grow 13% and soar to over 17% of GDP. Plan expenditure is slated to grow even faster, at 15% of GDP.
This year’s budget numbers ought to have been printed in red. The fiscal deficit was a huge 6% of GDP in 2008-09 and is slated to go up to 6.8% for
2009-10, the highest ever. Add the states’ borrowing, which is roughly 4% of GDP, and off-budget financing of assorted subsidies, the combined fiscal deficit is likely to be close to 12% of GDP.
Scary? Well, it’s like a shot of brandy for someone who’s come out of rehab for alcohol abuse, but gets caught in a freezing snowstorm: right now, that jolt of liquid fuel is needed, but the patient needs to be swiftly weaned off the stuff. When the global economy still stalls, for India to continue to grow, the government must continue to spend.
The problem is that the government has not indicated how it would bring down the fiscal deficit to 5.5% of GDP next fiscal and 4% of GDP in 2011-12. Talking to ET NOW, the finance minister said that he expects growth and tax reforms to do the trick for him. This is not entirely unrealistic, given that the government gives away 69% of the tax due to it, on account of assorted concessions, bringing down the effective rate of tax barely above half the nominal rate. But such aggressive correction of the tax structure is not envisaged in the medium term fiscal policy projection that tax receipts would go up to 12.4% of GDP in 2011-12.
The government’s response to global developments last year — oil price spikes and, later, financial meltdown and economic slump — led its total expenditure to go up 20% over original budget estimates, even as its revenues fell short of BE levels by 9%. The fiscal deficit for 2008-09 shot up to 6% of GDP, 3.5% higher than the budgeted level. Worse, the revenue deficit, which had shrunk to 1.1% of GDP, shot up to 4.4%. This is slated to go up further to 4.8% of GDP now, thanks to a deliberate decision to lower the Centre’s tax burden on the economy to 10.9% of GDP from 11.6% achieved in 2008-09, to keep the economic momentum going.
Interest payments account for 56% of the projected fiscal deficit. What this brings to the fore is the urgency to speed up disinvestment. While disinvestment works exactly like government borrowing when it comes to mopping up private sector savings and creating a possible liquidity crunch for the private sector in the year in which it takes place, in subsequent years, it would help to bring down interest outgo. And there is the efficiency increase that would be brought about in the running of PSUs that are partly owned by the public.
Pranab Mukherjee’s budgeting is quite conservative. The budget numbers assume a nominal GDP growth rate of 10.8%. Assuming that the economy grows by 7% in real terms, that puts inflation at a meagre 3.8%. The FM could have shown a marginally lower fiscal deficit by assuming a larger nominal growth rate of GDP without losing his moorings in reality. Central government expenditure is now budgeted to grow 13% and soar to over 17% of GDP. Plan expenditure is slated to grow even faster, at 15% of GDP.
India makes fresh bid for UNSC seat
8 Jul 2009,
NEW DELHI: India launched a renewed campaign for a seat in the UN Security Council using the forum of the G-8 summit.
In an unusually feisty article written for the compendium of the G-8, prime minister Manmohan Singh said, "The Security Council has not changed at all and its present structure poses serious problems of legitimacy. The system of two-tiered membership, which gives a veto to the five permanent members ie the nations that emerged victorious after the Second World War, is clearly anachronistic."
In his article, the PM made a strong case for reforming all international institutions, from the Security Council to institutions of global and financial governance. "The problems faced by the institutions of governance charged with handling the financial system are also relevant for other international institutions dealing with political and security issues, trade, climate change, etc. They need to update structures and upgrade work methods; reform decision-making and ensure effective delivery," he said.
PM Manmohan Singh has clearly not revised his opinion of the G-8, describing the grouping whose summit he is currently attending as a "group of countries with common interests, not necessarily representative of the global community". In Heilegendamm, the PM had dismissed the G-8 outreach exercise saying he wanted to be there as a "partner" not a "petitioner".
Groupings like G8, he argued, came out of the "unworkability of the existing structures". On the expansion with the G-5 and now African countries, Singh said, "This suffers from two limitations. The expanded group is not cohesive since the countries included for purposes of outreach do not participate fully in the proceedings or the preparations, and the expanded group therefore does not have a composite identity. Second, these groupings do not have any special legitimacy within the UN system."
In the wake of the financial crisis, the PM said the world decided to start yet another mechanism, the G-20, which he complimented for achieving "a great deal more than normal meetings of this type, especially in two respects".
"First, it succeeded in expanding the perimeter of financial regulation and endorsing the establishment of global standards to which national standards can be aligned. These standards will be developed by the Financial Stability Forum (now renamed the Financial Stability Board), which has been expanded to include all G-20 countries that were not members earlier. Second, it achieved a significant expansion in funding for the Bretton Woods Institutions," he said.
None of these measures, he added, led to any significant reform of the international financial institutions.
NEW DELHI: India launched a renewed campaign for a seat in the UN Security Council using the forum of the G-8 summit.
In an unusually feisty article written for the compendium of the G-8, prime minister Manmohan Singh said, "The Security Council has not changed at all and its present structure poses serious problems of legitimacy. The system of two-tiered membership, which gives a veto to the five permanent members ie the nations that emerged victorious after the Second World War, is clearly anachronistic."
In his article, the PM made a strong case for reforming all international institutions, from the Security Council to institutions of global and financial governance. "The problems faced by the institutions of governance charged with handling the financial system are also relevant for other international institutions dealing with political and security issues, trade, climate change, etc. They need to update structures and upgrade work methods; reform decision-making and ensure effective delivery," he said.
PM Manmohan Singh has clearly not revised his opinion of the G-8, describing the grouping whose summit he is currently attending as a "group of countries with common interests, not necessarily representative of the global community". In Heilegendamm, the PM had dismissed the G-8 outreach exercise saying he wanted to be there as a "partner" not a "petitioner".
Groupings like G8, he argued, came out of the "unworkability of the existing structures". On the expansion with the G-5 and now African countries, Singh said, "This suffers from two limitations. The expanded group is not cohesive since the countries included for purposes of outreach do not participate fully in the proceedings or the preparations, and the expanded group therefore does not have a composite identity. Second, these groupings do not have any special legitimacy within the UN system."
In the wake of the financial crisis, the PM said the world decided to start yet another mechanism, the G-20, which he complimented for achieving "a great deal more than normal meetings of this type, especially in two respects".
"First, it succeeded in expanding the perimeter of financial regulation and endorsing the establishment of global standards to which national standards can be aligned. These standards will be developed by the Financial Stability Forum (now renamed the Financial Stability Board), which has been expanded to include all G-20 countries that were not members earlier. Second, it achieved a significant expansion in funding for the Bretton Woods Institutions," he said.
None of these measures, he added, led to any significant reform of the international financial institutions.
P.M.pitches for India's place in emerging world order
Ahead of the G8 summit in Italy, Prime Minister Manmohan Singh has made a vigorous pitch for reform of the UN Security Council and underlined that India will seek its due place in the emerging international order.
"The structure of United Nations Security Council must evolve to become true representative of the global community," the prime minister argued in an article he has written for 'The Vision of Emerging Powers - India'. It has been published in the compendium brought out by the G8 nations on the eve of its summit in Italy.
Contending that the present veto power system is outdated, the prime minister wrote: "The system of two-tiered membership, which gives a veto to the five permanent members i.e. the nations that emerged victorious after the Second World War, is clearly anachronistic."
"Germany and Japan, which have significantly larger economies than Britain and France, both permanent members, are excluded. China is the only developing country in the P-5 and it is there for historical reasons, not as a large and economically important developing country," he wrote.
"It is obvious that if the system was being designed today it would be very different," he said while critiquing the sluggish movement in the crucial area of reforms of international institutions.
Making a case for the inclusion of emerging and developing countries in the Security Council and global financial institutions, the prime minister outlined his vision of India's place in the international order.
"India, as the largest democracy in the world and an emerging economy that has achieved the ability to grow rapidly, remains deeply committed to multilateralism," Manmohan Singh said.
"It has been an active member in global institutions - the United Nations, Bretton Woods Institutions, World Trade Organisation, International Atomic Energy Agency and so on. It will continue to be so in the decades ahead, based on commitment to principles and values that define these institutions."
"India will seek its due place, play its destined role and share its assigned responsibility, giving voice to the hopes and aspirations of a billion people in South Asia," the prime minister underlined.
Manmohan Singh stressed that India will continue to strive for the UN reforms to make it more democratic and address a host of global issues, including international terrorism, piracy on the high seas, climate change, creating a new financial architecture and an early conclusion of the Doha Round of trade negotiations.
"The structure of United Nations Security Council must evolve to become true representative of the global community," the prime minister argued in an article he has written for 'The Vision of Emerging Powers - India'. It has been published in the compendium brought out by the G8 nations on the eve of its summit in Italy.
Contending that the present veto power system is outdated, the prime minister wrote: "The system of two-tiered membership, which gives a veto to the five permanent members i.e. the nations that emerged victorious after the Second World War, is clearly anachronistic."
"Germany and Japan, which have significantly larger economies than Britain and France, both permanent members, are excluded. China is the only developing country in the P-5 and it is there for historical reasons, not as a large and economically important developing country," he wrote.
"It is obvious that if the system was being designed today it would be very different," he said while critiquing the sluggish movement in the crucial area of reforms of international institutions.
Making a case for the inclusion of emerging and developing countries in the Security Council and global financial institutions, the prime minister outlined his vision of India's place in the international order.
"India, as the largest democracy in the world and an emerging economy that has achieved the ability to grow rapidly, remains deeply committed to multilateralism," Manmohan Singh said.
"It has been an active member in global institutions - the United Nations, Bretton Woods Institutions, World Trade Organisation, International Atomic Energy Agency and so on. It will continue to be so in the decades ahead, based on commitment to principles and values that define these institutions."
"India will seek its due place, play its destined role and share its assigned responsibility, giving voice to the hopes and aspirations of a billion people in South Asia," the prime minister underlined.
Manmohan Singh stressed that India will continue to strive for the UN reforms to make it more democratic and address a host of global issues, including international terrorism, piracy on the high seas, climate change, creating a new financial architecture and an early conclusion of the Doha Round of trade negotiations.
Friday, July 3, 2009
Mamata's railway budget 2009-10 makes common man smile
3 Jul 2009
NEW DELHI: The man on the street appeared happy with Railways Minister Mamata Banerjee on Friday and also a trifle relieved that she had not announced a fare hike in her rail budget.
Raju, 28-year-old daily wage labourer, was all praise for her new scheme that makes a monthly season ticket of Rs.25 available for travel up to 100 km for those in the unorganized sector with monthly incomes not exceeding Rs.1,500.
"I have to travel from one place to another as and when work comes up. So this scheme is of great use to me," said Raju, who hails from Bihar, lives in Delhi and often goes to Haryana for work.
Homemaker Sushila Sharma pointed out that at a time when everything was becoming more expensive, Banerjee had at least spared train travel.
"With the prices of everything skyrocketing, the freezing of passenger fares is a real highlight. For the middle class it will be a relief in such times," said Sharma who travels by train at least twice a year for family holidays.
People have also given a thumbs-up to Banerjee's decision to make unreserved tickets available at 5,000 post offices across the country.
"Now we will not need to go to the railway station for tickets. I can buy a ticket from a nearby post office," said 80-year-old Dayanand Arora, who lives in a Haryana village.
Sahil Makhija, a 23-year-old Delhi based professional, also welcomed the installation of 200 automatic vending machines at key stations.
"Though we have online ticketing, everybody is not comfortable using it. The automatic ticket vending machine will surely take away the rush from booking counters."
The railway minister's announcement that a doctor would be present on long distance trains was also applauded by the common man.
"Long journeys in trains are sometimes very risky for the ailing and the elderly. The presence of a doctor will surely help," said Rajesh Gupta, an east Delhi resident.
However, there were certain issues which according to people still remain to be addressed.
"I expected the fares to go down but that did not happen. But the overall budget was good. More could have been done in terms of traffic management, which again was neglected. Punctuality is a big problem and needs to be sorted out soon," said Jalaj Bansal, a teacher.
NEW DELHI: The man on the street appeared happy with Railways Minister Mamata Banerjee on Friday and also a trifle relieved that she had not announced a fare hike in her rail budget.
Raju, 28-year-old daily wage labourer, was all praise for her new scheme that makes a monthly season ticket of Rs.25 available for travel up to 100 km for those in the unorganized sector with monthly incomes not exceeding Rs.1,500.
"I have to travel from one place to another as and when work comes up. So this scheme is of great use to me," said Raju, who hails from Bihar, lives in Delhi and often goes to Haryana for work.
Homemaker Sushila Sharma pointed out that at a time when everything was becoming more expensive, Banerjee had at least spared train travel.
"With the prices of everything skyrocketing, the freezing of passenger fares is a real highlight. For the middle class it will be a relief in such times," said Sharma who travels by train at least twice a year for family holidays.
People have also given a thumbs-up to Banerjee's decision to make unreserved tickets available at 5,000 post offices across the country.
"Now we will not need to go to the railway station for tickets. I can buy a ticket from a nearby post office," said 80-year-old Dayanand Arora, who lives in a Haryana village.
Sahil Makhija, a 23-year-old Delhi based professional, also welcomed the installation of 200 automatic vending machines at key stations.
"Though we have online ticketing, everybody is not comfortable using it. The automatic ticket vending machine will surely take away the rush from booking counters."
The railway minister's announcement that a doctor would be present on long distance trains was also applauded by the common man.
"Long journeys in trains are sometimes very risky for the ailing and the elderly. The presence of a doctor will surely help," said Rajesh Gupta, an east Delhi resident.
However, there were certain issues which according to people still remain to be addressed.
"I expected the fares to go down but that did not happen. But the overall budget was good. More could have been done in terms of traffic management, which again was neglected. Punctuality is a big problem and needs to be sorted out soon," said Jalaj Bansal, a teacher.
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