From the Wall Street Journal:

Regulators shut down Silver State Bank, the latest in a series of bank failures and one that could ripple through the presidential campaign.

 

Until recently, the son of Republican nominee Sen. McCain sat on Silver State's board and was a member of its three-person audit committee, which was responsible for overseeing the company's financial condition. Andrew McCain left the Henderson, Nev., bank July 26 after five months on the board, citing "personal reasons." He is Sen. McCain's adopted son from his first marriage.

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From CNBC , that bastion of financial news stuffs:

Pimco’s legendary bond investor Bill Gross said during “Street Signs” Thursday that his firm would be staying out of any and all bank offerings for the foreseeable future.

Banks the world over have raised $400 billion in capital, Gross said, and may need to raise much more. The problem, though, as yesterday’s $1.5 billion preferred offering at Wells Fargo showed, is that the institutional buyers are full, leaving only small investors to pick up the slack.

As Gross said, “There’s only so many billion and a half small investor bank capital deals that can be done from this point forward.”

 Don't say I didn't warn you about Wells Fargo (no wonder why they're raising capital) - see my Wells Fargo work: drill down, the forensic analysis and the Q2 highlights.

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Main Bank of China Is in Need of Capital

By KEITH BRADSHER

HONG KONG — China’s central bank is in a bind.

It has been on a buying binge in the United States over the last seven years, snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac.

Those investments have been declining sharply in value when converted from dollars into the strong yuan, casting a spotlight on the central bank’s tiny capital base. The bank’s capital, just $3.2 billion, has not grown during the buying spree, despite private warnings from the International Monetary Fund.

Now the central bank needs an infusion of capital. Central banks can, of course, print more money, but that would stoke inflation. Instead, the People’s Bank of China has begun discussions with the finance ministry on ways to shore up its capital, said three people familiar with the discussions who insisted on anonymity because the subject is delicate in China.

 This is actually an interesting article and I urge you to read the rest . As you know, I have been bearish on the Asian nations and the chickens are finally coming home to roost. See my China macro update .

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The FDIC said Tuesday it reserved $10 billion in the second quarter to cover the costs of bank failures — a 2,000% increase over the first quarter. The massive provision shaved 18 basis points off the Deposit Insurance Fund's reserve ratio …

The cost to bailout IndyMac bank has risen to a full 25% of the FDIC's available funds. Keep in mind that this is just one failure. Can one imagine if/when WaMu goes kaput.

Troubled banks on the FDIC list rise to 177

FDIC May Borrow Money from Treasury (as if we couldn't see this one coming

Don't Expect Asia to Grow this Quarter 

Cramer Calls the Housing Bottom (contrarian indicator flashing - read the logic behind this article, seriously - now I have to charge for content :-))

 Temasek Raises Stake in Merrill Lynch, Has `Great Confidence' in CEO gThain (contrarian indicator flashing again - reference the success SWFs have had during the credit crisis investment cycle)

Dubai M&A Oasis Lures London Bankers With Bigger Bonuses From Desert Deals - Do you see a bubble?

 Housing Market Still Under Pressure

For the regular readers of my blog, you saw this coming last year and hopefully benefitted from the foresight. See the latest credit crisis summary: The Asset Securitization Crisis Series to date 08/19/2008

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That's right, ita Oh My God, Its FDIC Friday Again. From the WSJ :

State regulators shut down Columbian Bank and Trust Co. of Topeka, Kan. on Friday, the ninth bank to fail this year and fifth since July 11.

The Federal Deposit Insurance Corp. estimated the failure would cost its deposit insurance fund $60 million. Columbian Bank and Trust had $752 million of assets and $622 million of deposits as of June 30, the FDIC said.

The FDIC sold to Citizens Bank and Trust of Chillicothe, Mo., the insured deposits of the failed bank, which had nine branches. In addition, Citizens Bank and Trust agreed to buy $85.5 million of Columbian Bank and Trust's assets, which are mostly cash, cash equivalents and securities.

The FDIC said Citizens Bank and Trust did not purchase roughly $268 million of brokered deposits at the failed

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The initial quote that was attributed to me sounds a bit callous, and that was not my intention. I truly believe that GGP has some serious issues, but I did not intent to make light of them or belittle them. Just want to make my perspective clear.

Excerpts rom downtownexpress.com:

General shrinking? Critics warn Seaport firm has no dough

The stock of General Growth Properties fell nearly 50 percent in the past year, and the company has $18.4 billion in debt coming due in the next 3½ years, according to the Wall Street Journal. Earlier this month, Bob Michaels, G.G.P.’s president and C.O.O., was forced to sell half his shares in the company because of the dropping stock price, the Journal reported...

General Growth hopes to demolish the touristy mall on Pier 17 and replace it with low-rise retail, a boutique hotel and a public plaza. They also hope to build a 495-foot condo-hotel tower just north of the pier (Hey New Yorkers, that's just what our dear city has been lacking, more condo towers - talk about massive demand and no supply in a strong macro environment!), and they want to move the landmarked Tin Building to the pier’s tip...

“They’re dead broke and in extreme financial hardship,” said Reggie Middleton... “I can’t see them doing [a new project]…. They definitely can’t afford a redevelopment of this size.” This doesn't quite read how I intended, but the gist is accurate. They are currently paying a dividend that has been funded through stock sales and mortgage refinancing in a slowing equity, debt and CRE market while they have massive amounts of debt to refi that is looking to be quite troublesome. I think its fair to say they have problems. See GGP and the type of investigative analysis you will not get from your brokerage house  for more on thier trials and tribulations.

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Middleton traced General Growth’s expansion over the last decade, in which the company aggressively acquired property around the country, riding the top of the credit bubble. In 2004, General Growth bought the Rouse Company, the former owner of the Seaport mall. Then the credit bubble popped, and Middleton thinks General Growth won’t be able to refinance its debt and will have to either sell off properties or foreclose on them.

Earlier this month, the Las Vegas Review-Journal reported (I was quoted in that article as well) that General Growth is backing out of a deal to co-develop a $4.8 billion resort on the strip, called Echelon. General Growth is also delaying development of a 1.4 million-square-foot mixed-use project in Las Vegas called the Shops at Summerlin Centre, the Review-Journal reported.

Middleton sees these Las Vegas delays as an indication of what could happen at the Seaport.

General Growth executives declined interview requests for this article (But, of course they did), but the firm released a statement defending its ability to complete the Seaport project and indirectly addressing the Las Vegas delays.

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I have fixed the archived links, so all links to all articles are now working properly. This is the Asset Securitization Crisis roadmap to date. Feel free to spread it around.