Bear Market Investing » Featured

2010 Bank Failures Expected to Outpace 2009 Failures

Big Bear — Tue, 31 Aug 2010 16:53:27 +0000

The Federal Deposit Insurance Corp. (FDIC) said Tuesday that they expect 2010 bank failures to outpace 2009 failures, where 140 failed. To date, 118 banks have failed in 2010.

The FDIC also revealed that the list of problem banks reached 829 during the 2nd quarter of 2010. This is 54 higher than the 775 banks on the list in the 1st quarter.

The FDIC Chairman, Sheila Bair says, “Particularly given economic uncertainties we believe that all banks should continue to exercise caution and maintain strong reserves. The high level of troubled loans reflects the ongoing challenges that many banks face.”

Long Term Resistance in Silver Sets Up Trade

Big Bear — Tue, 31 Aug 2010 16:28:22 +0000

There’s an interesting post on Investor Place today. The other points out that Silver is nudging a
long-term resistance level within a year-old channel.
He offers one way of playing this – an option trade on SLV (the iShares Silver Trust ETF).

Trade: SLV September 18/19 call spread.

Target Entry Price:

Right now the spread is paying about 57 cents or so. I think an
aggressive limit order at 59 cents has a good chance of being filled.

Exit Forecast:

If the assurances the Fed Chairman made on Friday about the U.S.
economy are taken seriously by traders over the next two weeks, this
trade should play out nicely. However, we would not expect SLV drop
below $17 a share. Therefore, we would exit if the underlying met that
price in the near term.

Read the article

Paulson’s Attempt to promote Financial Stability

Big Bear — Tue, 14 Oct 2008 13:34:43 +0000

From Time -

“Last Friday Paulson embraced sprinkling banks with billions of dollars, announcing at a press conference that he intended to pursue this plan “to promote financial market stability.” Which leads to an obvious question: Are banks failing now?

The obvious answer is yes. Banks are failing — 13 have gone under so far this year — and they’re going to continue failing. One hedge-fund star said the markets are now pricing the chance of a default in the next five years by Morgan Stanley or Citigroup at 45% and 21%, respectively.

The FDIC has a clear message for Americans who are beginning to awaken to the size of the problem: Don’t panic. Banks will fail, but it is highly unlikely that depositors will lose their money. The FDIC now guarantees up to $250,000 in individual deposits at the banks it insures. And by law it gets its hands on a failed bank’s assets before any other creditors do. FDIC chair Sheila Bair is eager to talk about how no insured depositor has ever lost a penny of his or her deposits”