Fed Close Banks in California, Minnesota,Michigan, Georgia and Missouri

Another week another round of bank closings. This weeks of parade of Bank closures includes United California Bank based in San Francisco this largest to closes this week and the largest for the month November so far.

United California served largely Asian American community in California, New York, Georgia. UCB was also an international bank with branches in The People’s Republic of  China, Hong Kong and Taiwan. UCB had $11 billion in assets and $7.5 billion in deposits. Pasadena based East West Bancorp. Inc is the new owner.

United Security Bank  a very small bank in middle Georgia and it’s Atlanta area subsidiary Bank of Woodstock were closed by Georgia authorities. They were promptly sold to Ameris Bank.

Home Federal Savings Bank of Detroit was sold to Liberty Bank  of New Orleans. Home Federal was Detroit oldest Black owned bank. Home had two branches both will become branches  of Liberty.

Prosperan Bank of Oakdale,MN was closed by FDIC  quickly sold to Alerus Financial of Grand Fork, ND. Prosperan has three bank branches in Minneapolis-St. Paul suburbs all will be Alerus  Financial branches. The Oakdale and Maplewood branches re-opened today while Minnetonka re-opens on Monday.

Gateway Bank in St. Louis  was  closed by the Missouri Division Finance on Friday. Gateway’s lone branch will become a branch of Kansas City based Central Bank. Gateway Bank has $27.7 of assets and $27.9 deposits.

This brings numbers of bank closing to 120.

Yahoo Finance

Minneapolis Star-Tribune

Comcast.net Finance

KTVI-TV/HD “FOX 2 News”

Gold is Racing Toward 11,000 as India’s Central Bank buys 200 Tons

Gold continued is impressive run on Wednesday crashing the 11,000 barrier before retreating to closed at 10, 086.70 after India’s central bank bought 200 tons of the shiny stuff worth $6.7 billion and it’s head saying the US and European markets “collapsed”

The news show Asian markets are quickly moving away from the US dollar.

The purchase by the New Delhi Reserve Bank  form the International Monetary Fund may spur other Central banks across Asia to join India to buy gold and drop the dollar.

Inida’s Finance Minister Pranab Mukherjee says the purchase by India show how strong the Indian economy compared to the west. “We have money to buy gold. We have enough foreign exchange reserves.”

Mukerjee points out India’s strength versus west. “Europe collapsed and North America collapsed.”

“This is a landmark trade,” said Jonathan Spall a director at Barclays Capital and a gold ­specialist. “Central banks are conservative institutions and India’s move is a sign for other central banks and sovereign wealth funds that were contemplating buying gold.”

India gold purchases come after the People’s Republic of China bought their fail share of  golden commodity  over the last six years.

Traders and miners  believed that China and Middle East soverigen wealth funds will  buy more gold.

Financial Times.

Wal-Mart Tries Again to Land In Cities

Two Years ago Wal-Mart enter the city of Chicago with limited fanfare in the Austin and Galewood neighborhoods. Today, it’s one of the most profitable store in the Company. Chicagoans came from miles around hardscrabble working class neighborhood getting necessities at lower prices.

Back then Wal-Mart want to open two or three stores in the city. City leaders opposed Wal-Mart’s entry because the salaries are below unionized workers standard and the stores strong anti-union sentiment. Wal-Mart had plans to open a store in Chicago’s Chatham neighborhood on the Far South Side. They backed out due to heavy criticism by United Food and Commercial Worker Union and its supporters on the Chicago City Council.

Today, not only want expand in major cities it a major priority according to Mike Duke, Wal-Mart CEO. Wal-Mart is developing  political relationships in Philadelphia, while eying the big prize entering the highly coveted New York City market.

Wal-Mart US  Divisions Chief Eduardo Wright says urban market could bring billions of dollars of untapped revenue in under served communities.

“We already have in our real estate programme a robust plan to go after those,” he told analysts in October. Wal-Mart stores are not in New York City or Boston.

Wal-Mart push comes as the retailer has changed perceptions, including strong performance sales.

Leslie Dach, director of corporations said Wal-Mart abilities in serving working class neighborhood during the economic crisis “new respect from politicians, from economists and from the media”.

Wal-Mart is engaged in environment concerns which bring the retailer in recent years has led, Covalence’s rankings of global retail ethical standard from the bottom to second  behind the UK retailer Mark and Spencer.

Wal-mart has created a more regionalized management structure system to respond to local needs. They hired local political consultants to work their real estate department. Became more political savvy in it charitable giving through the Wal-Mart Foundation to African-American and Latino organizations in New York, Chicago, and Philadelphia. Also encourage minority supplierd to work with Wal-Mart at recent event in September in Philadelphia addressed by Mayor John Street .

Financial Times

Bailout Was Not Enough for CIT Group Files For Bankruptcy

CIT Group one of the nations leading banks filed for Chapter 11 bankruptcy protection  on Sunday. This comes after last minute negotiations to restructure it’s debt broke down.   CIT  had about 90% of all of its  debtors  agreeing to lend billions of dollars to keep CIT afloat.

However, a small group of debtors opposing granting additional funds stood in the way. CIT took  the only route possible by filing for Chapter 11.

“The decision to proceed with our plan of reorganization will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy,” CEO Jeffrey Peek said in a statement.

CIT creditors approve the bankruptcy.

Now CIT will receive Debtor-In-Possession financing.

CIT Group is the largest lender to small and medium businesses in the nation.

Wall Street Journal (Subscription Required)

Denver Business Journal

Feds Closes 9 Bank Subsidaries of Chicago’s FBOP Corp.

On Friday, the Federal Deposit Insurance Corporation closed Oak Park,Ill based FBOP Corporation. FBOP had nine regional banks in California, Arizona,Texas and Illinois. The closure of FBOP was the fourth largest bank to fail to this year.

Minneapolis based US Bancorp acquired FPOB subsidiaries:

California National Bank with 68 branches based in Los Angeles.

Pacific National Bank  with 17 branches based in San Francisco.

Park National Bank with 30 branches  based in Chicago.

San Diego National Bank with 28 branches based in San Diego.

FBOP own some smaller banks in Texas and Arizona with one or two branches including: Bank USA based in Phoenix,AZ;  Citizens National Bank of Teague, TX; Madisonville State Bank , Madisonville, TX,  North Houston Bank based in Houston,TX; and Community Bank of Lemont, Lemont,Ill.

These banks re-opened as branches of US Bank on Saturday.

Los Angeles Times

FBOP Corporation

Wikipedia

Stimulus Jobs were Overstated.

White House has overstated the number of jobs saved or created  from the $787 Billion Stimulus package are in  the thousands . The White House will correct it later reports to Congress.

The White House first review of the jobs claimed by the stimulus was overstated by 5000. According to the AP review of  the report.

Here are some examples :

• A company working with the Federal Communications Commission reported that stimulus  money paid for 4231 jobs, when about 1000 jobs ere created.

• A Georgia Community College reported creating 280 jobs with recovery money, bu none was created from the Stimulus spending

• A Florida child care center said its stimulus money saved 129 jobs but used the money on raises for existing employees.

The AP found no evidence of the White House manipulated with the numbers in the report. However,  the Fed used the numbers to show that the stimulus is working.

Ed De Seve,  an Obama adviser on the stimulus jobs program says the administation is working with companies,  organizations and local and state government on the accounting problems.

“If there’s an error that was made, let’s get it fixed,” DeSeve said.

AP via My Way News

Wealthy are Fleeing New York’s High Taxes

New report has found that wealthy New Yorkers has decided to flee New York for greener pastures and its losing tax revenue.  More than 1.5 million has fled the state between 2000-2008 according to the Empire Center for the  Study New York Policy.

The overwhelming majority of those who have left are from New York City. 1.1 million have  moved away. This is equivalent of one out seven New Yorkers have moved away.

“The Empire State is being drained of an invaluable resource — people,” the report said.

What does it mean?  Those who have left paid in taxes $93,264. The newcomers earn a lot less about $72,726. A difference of $20,538 for missing from borough of Manhattan. The only other county or borough that suffered a loss of this magnitude is  Staten Island which loss $20,066 difference between newcomer and emigrants.

In 2006-2007 the  New York state tax rolls lost an estimate $4.3 billion in revenue in out migration.

So where are people headed to? Florida and New Jersey.  Florida gained 250,000 new immigrants while New Jersey 172,000 people who fled.

A warning to Governors Patterson , Schwarzenegger, Quinn , Corzine and others whats happening in New York and to a lesser degree California people with money have the ability leave the state and they are leaving.  They are going to states like Florida, Texas, Nevada with no state income tax or go to state with lower taxes like Idaho, Colorado or business friendly states like Oklahoma, Virginia and North Carolina. Be prepared to continuing to lose tax revenue.

New York Post

Chicago Tax Cheats Beware City Wants you to Pay Up and Will Use Snitches to Get it Done.

Chicago tax scofflaw be aware the city is coming for you with a twist. They are ready to pay people to rat you out if you owe back taxes. The city is calling it a “tax whistle blower” program that will pit neighbor versus neighbor on business scene.

City hall will pay cold hard cash to these informants based on a percentage of  what the tax cheating businesses owe to the city.

“It’s just another way of bringing people into compliance,” Revenue Department spokesman Ed Walsh told the Sun-Times.

“It would probably be … a business knowing that a competitor is not remitting a tax. An employee [of the tax-dodging business] could know that, too. Typically, you need to provide some type of incentive.”

Chicago Sun-Times via WMAQ-TV/HD “NBC 5 News”

Over 100 Banks fall for 2009

Today the Federal Deposit Insurance corporation shuttered six banks in the Midwest and the southeast US to day the largest number of closing on one day in years. Three banks in Florida, one in Georgia, Minnesota; Wisconsin and Illinois each.

The bank failures has slowly drained the FDIC insurance fund. So far the closures have cost the fund over $25 billion. By 2013 bank failure could cause the federal government up to $100 billion. To build up the fund the FDIC is demanding that banks  pay in three years advance a total of $45 billion.

The growing list of banks in trouble as of June is 416 up from 252 from beginning of the year. On the other hand the number of banks closing seems to slow down for example in July the FDIC shuttered 24 banks, in September 11 were closed and in October so far 11.

Whenever a bank fails to maintain operational set by the FDIC, the fed swoop in and immediately shut the financial institution and find a buyer or take over the deposits. The quickly reopen the bank between 24 and 72 hours.

The FDIC’s main priority, spokesman Andrew Gray said, is to keep up the confidence of the American People with the banking industry. “As evidenced by the stability of insured deposits throughout last year, the mission has been a success.” He said.

Those in banking and law industries say the FDIC’s main goal to provide confidence in banking. That means the fed uses a go slow approach not to cause fear or panic in the minds of the public.

“The FDIC was set up to create confidence and prevent bank runs,” says Mark Williams, a former bank examiner for the Federal Reserve. Being too aggressive about bank closing “can be counter to the mission.”

Maryland banking regulator Sarah Bloom Raskin says, Technically it’s the states who decide, but in reality it’s the FDIC calling you and to say” when the bank will closed.

Small banks have hard hit by bad real estates, commerical and industrial loans that went south during this recession.

Here are the banks in question that have been taken over by the feds.

Partners Bank and Hillcrest Bank Florida, both based in Naples were closed on Friday and its assets have been bought by Stonegate Bank in Fort Lauderdale both banks and branches will become branches of Stonegate Bank. Partner Bank had only  two branches both in Naples. Hillcrest Bank Florida had six branches they will become  Stonegate Bank.

Flagship National Bank based in Bradenton was closed by the FDIC and is assets and  four branches in Sarasota,Bradenton. First Federal Bank of Florida in Lake City will take the assets and branches of Flagship National and will open as branches of First Federal Bank Florida.

American United Bank in the Atlanta suburb of Lawenceville,GA was shut by regulators on Friday. This bank has only one branch. It will be come a branch of Ameris Bank of Moultrie, Ga and assume all $111 in assets.

Racine based Bank of Elmwood was closed by regulators and it’s assets and 5 branches in Racine and Kenosha will become a branch of  Tri-City National Bank of Oak Creek, Wisconsin near Milwaukee.

Riverview Community Bank based in Minneapolis suburb was shuttered by regulators. Otsego based Central Bank will assume all assets and two branches of Riverview Community.

and Lastly First DuPage Bank in the Westmont, IL a western suburb of Chicago was closed by state and federal regulators Friday. It’s sole branch will become a branch of First Midwest Bank based in Itasca,IL also in the western suburbs of Chicago.

AP via My Way News

Chicago Tribune

Marco News Eagle

South Florida Business Journal

Market Watch

Minneapolis Star-Tribune

Pay Master Meet the Pay Czar: Feds to Cut Salaries of Bailout Companies CEO’s

Attention bailout companies get ready Washington is coming for your  wallets. According the New York Times Kenneth Feinberg the US Treasury special appointee for executive compensation will order salary cut up to 90% of the 25 highest paid employees this would include benefits, salaries and bonuses.

This affect the following institutions including Citigroup, Bank of America, American International Group,General Motors and Chrysler and their finance houses. For example AIG which received $180 billion in bailout funds. The top executives will make no more than $200,000 . Imagine a person going from tens  of million of dollars to a fraction of that. Wow!

If that not enough if an executive that want any perk that is over than $25,00 including limousines, private jets, joining a country club or company car they must get permission from Feinberg.

The Fed demand AIG to get back about $200 million in bonuses from AIG financial service division.

New York Times via CNBC