Economy Watch: Bank Failures Slow Almost to Halt
The rush of U.S. bank failures that began with the financial panic more than four years ago has crawled to a trickle.
By Dees Stribling, Contributing Editor
The rush of U.S. bank failures that began with the financial panic more than four years ago has crawled to a trickle. Late last week, the FDIC closed its fourth bank this year, HeritageBank of the South in Albany, Ga. The bank had about $258.8 million in total assets and $224.1 million in total deposits, and its closure cost the Deposit Insurance Fund $51.6 million.
There were 51 bank failures in 2012, and 91 in 2011, but the worst year among recent years was 2010, when 157 institutions went under. The total was 140 in ’09 and only 25 the year before. Since 2007, bank failures have cost the FDIC $92.5 billion in losses, which has obliged the agency to up what it charges member banks.
Georgia, oddly enough, has been one of the worst-hit states in terms of bank failures. In the four years since the crisis hit, 85 banks in Georgia have gone belly up, at a cost of $11.4 billion, according to the FDIC. Other (and less surprising) high-loss states include California and Florida, and both of which saw a lot of real estate loans held by smaller banks go bad.
Chinese economy listless
The Chinese economy, which has seen consistently rapid growth in recent years, has shown recent indications of slowing down (a little). Over the weekend, for instance, the country’s National Bureau of Statistics reported that retail sales over the January-February period grew at an annualized 12.3 percent, compared with expectations of 15 percent, and down from an annualized 15.2 percent in December.
It was also reported that consumer inflation jumped to an annualized 3.2 percent in February, up from 2 percent in January. That’s the sharpest increase in nearly a year, and may put more pressure on Chinese consumer spending, though some of the uptick was probably because of Chinese New Year, which is late January-early February in the Gregorian calendar. (And in fact is the reason the Chinese government reports January-February numbers, to lessen the distortion caused by the holiday.)
Imports dropped 15.2 percent in January-February compared with the same period a year earlier, another sign pointing to a slowdown in domestic demand. Industrial production also slowed down a bit, growing at an annualized 9.9 percent in January-February, compared a 10.3 percent gain in December. None of these number hint at a drastic slowdown, but perhaps a softening—and China is now such a large economy that the world pays close attention to its health (number two behind the United States in total economic activity, though far below that in per capita activity).
Wall Street had another record-setting day (ho-hum) on Monday, with the Dow Jones Industrial Average gaining 50.22 points, or 0.35 percent. The S&P 500 gained 0.32 percent and the Nasdaq advanced 0.26 percent.