by Pat D.
Member since:
June 29, 2006

Game - What financial institution will go under next?

September 29, 2008 09:22 AM EDT (Updated: September 30, 2008 12:19 PM EDT)
views: 405 | rating: 10/10 (3 votes) | comments: 14
It looks like the $700 Billion federal government plan may be too little too late. The dominos are beginning to fall fast.

Fortis, a big European bank had to be rescued by a consortium of EU countries.

Bradford & Bingley's mortgage portfolio was nationalized by the British Government over the weekend for a cost equivilent to $73 billion.

Wachovia, rumored to be under pressure was taken over by Citibank this morning.  This is complicated deal.  The FDIC is not going to have to pay anything, but that could change depending on how valuation of the assets goes.  It looks to me like this deal will bring down Citigroup unless they sell a big chunck of the liabilities through the $700 rescue/bail out/ stabilitzation plan.

So who's going down next?
The stock market is indicating that the next casualty will be National City (symbol NCC), a regional bank based in Michigan.

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Comments: 14

Amy B. Sep 29, 2008, 9:38am EDT
Sh*t... Hate to see that about NCC. My mother's entire estate was in NCC stock and she had it in a trust that didn't allow us heirs to sell the stock for five years. It was trading at $38 when she died two years ago, and now it's been trading in the $3-$5 range. We've already lost a bundle - now I guess there will be nothing left of my inheritance.
Pat D. Sep 29, 2008, 10:04am EDT
Amy - thats awful, but I think you may be right
Chuck M. Sep 29, 2008, 10:09am EDT
National City Bank is hurting. I don't feel bad for them. I pulled all of my money out of NCB a few years ago and put it all into a local credit union. National City's fees became outrageous and the interest that they payed out was pathetic. Best move I ever made was putting my money into a local credit union. I get charged nothing for the exact same setup I had at NCB and I get about 3 times more than I did in interest for about the same amount of money I have in there.
Pat D. Sep 29, 2008, 10:12am EDT
I agree Chuck. We have a National City here, and they are awful.
I know the company has a lot of non-performing commercial and residential loans on the books.
Ishbel R. Sep 29, 2008, 10:13am EDT
My personal savings are in B&Bingley. They are safe, and are being transferred to another Bank, owned by the Santander group (Spanish). I'm not happy about that and will remove my savings and put them in another British bank. My shares in the B&B (worth about 15,000 GBP a few months ago) are worth almost nothing.
Amy B. Sep 29, 2008, 10:15am EDT
National City has been a pain in the butt for me to deal with as well, but Mom's trust had me tied to them. The stock paid excellent dividends a few years ago, which is why my Mom had all her money in that stock (despite the pleas of her children to diversify). Part of me wishes Mom were hear so I could yell at her, but I'm also glad she didn't see her life savings disappear. She had no financial worries while she was alive, and this would have been devastating for her. So I'm glad she was spared having to worry.
Pat D. Sep 29, 2008, 10:27am EDT
Ishbel - why move your money now? As far as I can tell, the problems there have been dealt with.

Amy - It is good that your mom was spared this problem. MY late MIL was the same way.
Thomas Millington Sep 29, 2008, 1:03pm EDT
The entire world, as we know it, is out of order. The whole of mankind is morally bankrupt. Nothing less than God Himself has the remedy. Seven hundred billion United States dollars won't fix the problem. The remedy to today's problems - financial, social and moral, was set into motion in 1844. It looms on the horizon waiting for mankind to embrace it and put it into action.
Ishbel R. Sep 29, 2008, 5:30pm EDT
I do not trust Santander. The housing market in Spain is imploding. Santander is involved in many of the speculative builds on the Costa Blanca, Costa Brava and inland.

I want my money in a British owned bank. I'm probably going to move my funds to BankofScotland.
Nora Davenport Sep 29, 2008, 7:49pm EDT
Oh no, I hope NOT National City Bank! I just opened an online checking and savings account there, with a credit card!!!! Geesh, don't need to hear this, just after finding out that another bank account has been pilfered by a jerk to the tune of about $1,200!!!!!!!!!
I have to start "fraud proceedings" in the morning.......this was the account we were going to use for doing some house improvements.......
Think I'm gonna open a Swiss bank account!!!!
Pat D. Sep 29, 2008, 10:42pm EDT
Nora - I don't know about the fraud thing, but your money will be safe even if something happens with National City.

Ishbel - Do European banks have deposit insurance? Here in the states there is a system to deal with bank failures and sales so the depositors are not penalized.
Ishbel R. Sep 30, 2008, 3:38am EDT
Yes we do, Pat. Savings in any one bank are indemnified by the British Govt up to 35K GBP (about 45 plus USD).

The trouble is: I bought into B&B, not just as a saver, but a small-time investor. Those shares which a few months ago were 6 GBP each are now worth 20pence each! Effectively, I've lost 15,000 GBP. I was only a small investor - and it's us SMALL investors who will be hurting most at the loss of the bank.
Ishbel R. Sep 30, 2008, 8:55am EDT
Judging by the markets overnight and the LSE this morning - it certainly isn't over...
Kerry (A tree, not a lemon) .. Oct 21, 2008, 3:49pm EDT
I'm a little late to this article, but I just want to say....

I'm glad to find I'm not alone in my seething displeasure of National City! I pulled all of my money out of NCB years ago as well because of their "fees". They've legally "stolen" so much money from their clients over the years it makes me grin with delight at the prospect of them going under.
We've lost a huge chunk of our retirement during this economic glich but it's atleast a small consolation prize if NCB takes a nose dive. yaya

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