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Date: August 29, 2008
Subject: G&G Financial T.O.W. - "Latest FDIC report: Banks Look Dismal"


This is
G&G Associates
Tax & Financial Consulting Services
e-Newsletter

Latest FDIC report: Banks Look Dismal

Every three months the Federal Deposit Insurance Corporation (FDIC) puts out "Quarterly Banking Profiles (QBP)." Most investors have never heard of them. The mainstream press has largely ignored them. Even Wall Street traditionally pays them little heed.

But not me! The QBP provides a wealth of information about the state of the U.S. banking industry. It tells you about the credit quality of the loans on the books of U.S. banks, what's going on with bank earnings, how much money the FDIC has on hand to resolve failing institutions, and more.

I've been reading these things for a long time, and reporting on the details to you. I've noted how the numbers were progressively getting worse. I even told you that based on some of the data I was seeing, we could be facing a "New Savings and Loan Crisis."

Now, Wall Street is "FINALLY" paying attention. Heck, the release of the second-quarter QBP was a major media event — CNBC covered it live. Why?

Because The Latest QBP Reads Like A Banking Industry Horror Story!

It's chock full of creepy statistics, spooky charts, and downright scary surges in all kinds of delinquency and default indicators

- U.S. bank income sinks 86.5%!

- Loan losses nearly triple!

- Assets of banks on the FDIC’s most-likely-to-fail list TRIPLES!

- Wall Street Journal: FDIC may soon need Treasury bail-out! WHAT...the FDIC may need to be bailed out.

"The FDIC just dropped a bombshell on Wall Street: Its shocking second-quarter analysis of the U.S. banking industry."

And there is simply no way to put lipstick on this pig. Even FDIC chairman Sheila Bair was forced to admit that the U.S. banking industry’s second-quarter results were — quote — “Dismal!”

The facts:

- Bank income PLUNGED 86.5%! Insured commercial banks and savings institutions reported net income of $5.0 billion for the second quarter of 2008 — down a whopping 86.5% from a year earlier.

- Loan loss provisions QUADRUPLED! Loss provisions totaled $50.2 billion, more than four times the $11.4 billion quarterly total of a year ago. Second-quarter provisions absorbed nearly one-third of the industry’s net operating revenue — the highest proportion in 19 years.

- Actual loan losses nearly TRIPLED! Bad loan losses soared to $26.4 billion in the second quarter. That’s almost triple the $8.9 billion that was charged off in the second quarter of 2007 and the highest quarterly charge-off rate in 17 years.

- Credit card losses rose 47% ... commercial and industrial loan losses more than doubled, increasing 128% ... home equity loan losses jumped 633% ...

- Plus, loan defaults on residential mortgage loans soared 822%.

And get this: Bad construction and land development loans skyrocketed a staggering 1,227%!

It gets worse

The Wall Street Journal is now reporting that, for the first time in 13 years, the "FDIC" may have to borrow money from the U.S. Treasury Department to see it through an expected wave of bank failures. (Let's put it this way...I've already moved my money out of the bank...what about you).

Bottom line: This great credit crisis is nowhere near over. It’s not even slowing. It’s accelerating wildly! Millions of Americans now owe more on their mortgages than their homes are worth ...

So millions are defaulting and just walking away, handing banks billions more in loan losses, and:

The glut of repossessed homes on the market is driving home values through the floor ... giving millions more homeowners a reason to default on their mortgages ... and setting the banks up for even greater losses as far as the eye can see!
This is why we’ve repeatedly urged you to take two crucial steps while you still have time ...

WHAT TO DO TO PROTECT YOUR WEALTH

FIRST, to achieve true safety for your money, don’t wait one more day to take the steps I set forth for you in my recent “Bank and Brokers” List when you become a G&G Investment Society (GGIS)Newsletter subscriber. Move your money from those failing banking institutions.

SECOND, once you’ve got most of your money — even as much as 90% — in safe, conservative investments, you have the opportunity to USE this crisis to multiply your money many times over by "Buying Gold & Silver NOW!"

If you don't already own gold or silver, I strongly suggest you buy some now. Buy gold & silver for the long-term and protect your paper dollars pronto. As I have suggested in my past newsletters, and on previous conference calls, I would seriously consider allocating 20-30% of your net worth to gold and silver investments. You might want to put 2/3 in pure gold and silver investments, and the other half in mining shares.

Visit the following site www.publicgold.com/gngpreciousmetals in order to purchase Gold & Silver Eagles at a 25-35% discount instantly propelling your investment into a double digit gains instantly. While others are watching their portfolios lose at double digit numbers.

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If you are not yet a member of the GGIS paid newsletter service...Become an exclusive member of the G&G Investment Society subscription for USD ($99). But wait, if you listen to last weeks conference call before the end of the week you'll get instructions on how to get a 20% discount off the regular susbcription price. So....Sign up today!!!

To become a member of the G&G Investment Society newsletter subscription, please send an e-mail to GGIS@gngassoc.com for sign up instructions. DON'T WAIT ANOTHER DAY!

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Thanks

Gary Gray
Tax & Financial Consultant, RFC
G&G Associates
877-817-6031 toll-free
866-361-3872 toll free fax
www.gngassociates.net

"A Prudent man foresees the difficulties ahead and prepares for them; the simpleton goes on blindly and suffers the consequences."
Proverbs 22:3 -- Living Proverbs



LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. G&G Associates gets paid a commission from a membership purchase at www.publicgold.com/gngpreciousmetals.


 

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