Record-Breaking Three Banks Fail on Nov. 21
Nov 24, 2008
Two California-based banks and one in Georgia failed last Friday, Nov. 21, 2008. This was a new record for a single day. So far, 20 banks have failed this year.
The banks are absorbed by other banks, of course. Each bank is hoping that by growing larger, it will qualify as "too large to fail" so that it will be bailed out at their own appointed time.
Just because a large bank "buys" smaller banks that have failed does not mean that the larger bank itself is solvent. Witness the case of Citibank which was trying to purchase failed Wachovia just a few months ago. In that case, Wells Fargo undercut them and bought out Wachovia. Citibank sued, but lost the case. We who are lowly in the economic realm cannot understand how a bankrupt bank can qualify to purchase other failed banks.
Such thinking requires a doctor's degree in economics, rather than horse sense.