Friday, July 11, 2008

You Know the Saying, "Celebrities Always Die in Threes"? Banks Always Fail in Hundreds.

A bank failure - particularly the failure of a large bank for reasons that are not idiosyncratic - should sound alarm bells in the brain of anyone who knows the statistical distribution of bank failures.

Prediction: the chart will soon have another spike of bank failures.

One other observation: the FDIC is going to use up a huge chunk of its capital paying IndyMac claims. Expect them to raise deposit insurance premiums for other banks. This means even lower profits for banks.

1 comment:

Running Man said...

Interestingly is the length of time it appears to take to play out the banking closures...we're not even at the start based on the graph......