U.S. Bank Holiday to Happen on August 26, 2009? (FDIC Almost Out of Money)

***UPDATE9 (August 30, 2009). I just noticed something very interesting with the numbers. I'll let a financial guru tell me if it is significant or merely a coincidence. In the August 22 2009 blog post, "FDIC is Officially Out of Money (Insurance Fund Has Negative Balance of $5.5 Billion)!," I stated that the FDIC insurance fund had a negative $5.5 billion balance ($5,514,200,000 to be exact). In the recent 2nd Quarterly Report, the FDIC admitted that it had to charge an emergency fee to raise $5.6 billion. Coincidence?

The surge in failures prompted the agency to charge the industry an emergency fee in the second quarter to raise $5.6 billion to replenish its insurance fund, which fell to $10.4 billion as of June 30 from $13 billion in the previous quarter, the agency said.

Source: Bloomberg

You can view that spreadsheet by reading below.

FDIC Failed Banks Insurance Fund Balance ($5.5B Negative Balance as August 21, 2009)


***UPDATE8 (August 27, 2009). The FDIC insurance fund balance as of June 30, 2009 according to the FDIC is $10.4 billion. A total of 416 banks are listed as "problem banks" according the FDIC 2nd quarterly report released today. This is far from the dire predictions that have been on this site and on others over the last few weeks, but $5.6 billion in emergency fees were charged to banks last quarter which helped keep the fund replenished. However, we still do not know the FDIC insurance balance as of today's date. There have been several major bank failures since June 30, 2009 which will have further depleted the insurance fund balance.


***UPDATE7 (August 26, 2009). I listened to today's FDIC board of directors public session, and it was a FAIL. I did not learn anything nor were any relevant quarterly reports discussed. However, Reuters is reporting that the FDIC will hold its quarterly briefing tomorrow on Thursday, August 27, 2009 at 10:00am EDT/7:00am PDT.

On Thursday, the FDIC holds its quarterly briefing that provides critical information about its outlook for bank failures and the state of the deposit insurance fund.

You can read the FDIC's FULL PRESS RELEASE by clicking the following link: FDIC to Hold Its Quarterly Briefing on Thursday, August 27, 2009.

You can watch the briefing LIVE tomorrow at:
http://www.vodium.com/goto/fdic/quarterlybankingprofile.asp


***UPDATE6 (August 25, 2009). There are still no signs of a pending holiday. Would we get any warning if there is going to be one?

The following information may or may not be related, but there is a 3:30pm (Eastern Time) FDIC open board meeting tomorrow with the below agenda. You can watch the LIVE webcast tomorrow at 3:30pm by clicking anywhere on this link:

Agenda
(1) Memorandum and resolution re: Final Statement of Policy of Qualifications for Failed Bank Acquisitions;
(2) Memorandum and resolution re: Final Rule on the Extension of the Transaction Account Guarantee Program;
(3) Memorandum and resolution re: Notice of Proposed Rulemaking Regarding Risk-Based Capital Guidelines; Impact of Modifications to Generally Accepted Accounting Principles; Consolidation of Asset-Backed Commercial Paper Programs; and Other Related Issues.

***UPDATE5 (August 22, 2009). Guaranty Bank did indeed close yesterday along with three (3) other banks. The bigger news is the FDIC insurance fund has a negative $5.5 billion balance at this time! Therefore, the FDIC is now out of money, and we are looking at either a bank holiday, bank run or another billion dollar government bailout in the near future! Otherwise, the FDIC will not be able to cover a bank's deposits up to $250,000 as it guarantees.

***UPDATE4 (August 21, 2009). I just heard that Guaranty Bank may be closed by the FDIC today. If true, this will be the 2nd largest bank failure this year. I will update this entry when the FDIC releases the latest list.

***UPDATE3 (August 21, 2009). The FDIC is now taking extraordinary measures to find private equity investors for the numerous failing banks in this country. Uh-oh, that means the FDIC may be out of money! I wonder how many banks will fail today when the latest Friday Night Feast numbers are released.


***UPDATE2 (August 14, 2009). The FDIC closed five (5) more banks today, including Colonial Bank with 346 branches spread across Florida, Alabama, Georgia, Nevada, and Texas. Colonial Bank is the largest bank failure this year with $26 billion in assets. Also, there are 150 banks in imminent trouble.

As of March 31, 2009, there was only $13 billion left in the FDIC insurance fund to cover America's failing banks. The latest balance numbers have not yet been released. However, the FDIC believes that up to 500 more banks may fail this year, so it is quite likely that the FDIC may be insolvent at this point. When will the latest insurance fund balance numbers be released by the FDIC?


***UPDATE1 (August 13, 2009). Apparently, a lot of corporate insider trading action has been happening over the last two weeks. This story may be a sign that the rats are abandoning ship. Further, Steve Quayle received an email from one of his listeners who said that the bank holiday will occur regionally beginning during the week of August 24, 2009.

"As to your Bank Holiday information of this morning, the following is from a close CIA connection, the way it will come down is that starting 8/24, groups of banks will be closed in certain regions of the country for a week or so. They will open again, and then other groups of banks in different regions will be closed; and on and on it will go, until all the banks in the country have gone through that process.

The banks will be opened with a new global currency. Indeed the ratio will be 1 to 6, or 1 to 12. Thus, if you had formerly $6M in the Bank, after a ratio of 1 to 6 with the new currency, you will get 1M value in the supposed new legal tender."

As of today, the FDIC has closed 72 banks in 2009, and it will not be opening up any new banks anytime in the near future.

***

Here's an update to one of this blog's most popular posts, U.S. Bank Holiday Planned for August or September 2009? Now it appears that we have the first predicted date for when this holiday is supposed to happen. According to The Harry Schultz newsletter and Jim Sinclair the unscheduled United States banking holiday will occur on August 26, 2009.

Conclusion: Stand by for a possible bank run & bank holiday on Aug 26th, after the news breaks on the 25th. (FDIC 2nd Qtr. Report)

This is in line with the HSL prediction of a US bank holiday in Aug/Sept.

If you live in the US, get 3 to 6 months household expense money out of banks now.

Further, FDIC chairwoman Sheila Bair said back in March that the FDIC may run out of money before the end of the year.

Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

“Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry. U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the fees, according to a trade group.

I wonder if this alleged bank holiday news is related to the recent incident a couple of weeks ago where the Secretary of the Treasury Timothy Geithner cussed out Sheila Bair along with Federal Reserve Chairman Ben Bernanke and Securities and Exchange Commission Chairman Mary Schapiro. The next couple of weeks should be quite interesting.

Source: Jim Sinclair's Mindset via the Harry Schultz Newsletter; Bloomberg