FDIC Prepares as Bank Failures Loom - Wall Street Journal

FDIC to Add Staff as Bank Failures Loom
By Damian Paletta
Wall Street Journal


WASHINGTON -- The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen.

The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis.

FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas.

The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement.

FDIC Chairman Sheila Bair, Comptroller of the Currency John Dugan and Office of Thrift Supervision Director John Reich have warned of a pickup in bank failures. Last week, Mr. Reich reported that the thrift industry lost a record $5.2 billion in the fourth quarter.

"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group.

The FDIC was created by Congress in the 1930s after a series of bank runs during the Great Depression. At the end of 2007, it had $52.4 billion in its fund that backstops the nation's insured deposits.

FDIC to Add Staff as Bank Failures Loom - WSJ

Revisiting Our Gold Forecast from May 2007

"We were staring into an abyss as the price
of gold rose in September,1999."
Sir Edward George, Bank of England

The forecast we put out for Continuous Contract Gold in May 4, 2007
projected we would hit a high of 1,050 per ounce and end the year
roughly at 1,000 per ounce.


Here is the detailed forecast as we put it out almost a year ago.

Here is how things have actually turned out.

We are working on a new forecast and
hope to put it out here sometime in early March.

Theme for 2008: Back to the Abyss

Visa IPO Will Make Some Market Waves

The words generational top come to mind.

Watch these jokers try to prop the markets until they can get this one out the door like they did with AT&T Wireless.


Visa's IPO Could Be Largest In U.S. History
Company Aims to Sell As Much as $17 Billion in Stock
By ANDREW EDWARDS
February 25, 2008 7:22 a.m.

Credit-card processing giant Visa Inc. released the proposed terms of its long-expected initial public offering Monday, saying it plans to sell as much as $17 billion in stock, which would make it the biggest IPO in U.S. history.

The industry leader proposed to sell 406 million shares between $37 and $42 each. At the proposed price range, the Visa offering would easily trump AT&T Wireless Group's $10.62 billion IPO in 2000. The IPO's underwriters will have the option of buying an additional 40.6 million shares...

In 2006, Visa recorded 44 billion transactions, compared with 23.4 billion for MasterCard Inc., its largest competitor. The offering represents just more than half of Visa's 808 million shares outstanding. Visa has said the rest will be held by the San Francisco firm's member banks.

Visa made its initial IPO filing in June with the SEC, beginning the process from a private, member-owned association for financial institutions to a publicly held firm following the path of smaller rival MasterCard. MasterCard has been a high-flyer since going public in 2006, with its shares quintupling since then. Both firms aren't as tethered to consumer spending as credit-card issuers like banks because as an electronic-transaction processor it still makes money as more purchases are made with plastic instead of cash or checks.

Visa involves the mergers of Visa Canada, Visa USA and Visa International. Visa Europe will remain a bank-owned membership association and licensee of Visa Inc. The company said it plans to trade on the New York Stock Exchange under the symbol "V." The company hasn't said when it plans to make the offering, but today's release implies it could come soon.

At the midpoint of the proposed range, Visa sees raising nearly $15.6 billion, or $17.1 billion if the underwriters exercise their option to purchase all additional shares made available. The company said $3 billion of the proceeds would be put into an escrow account to pay legal settlement, with another $10.3 billion used to redeem stock held by its member banks. The rest would be for general corporate purposes.

The Principal Shareholders

J. P. Morgan Chase (JPM) 23.3%
Bank of America (BAC) 11.5%
National City (NCC) 8.0%
Citigroup (C) 5.5%
US Bancorp (USB) 5.1%
Wells Fargo (WFC) 5.1%
VISA Europe Ltd. 19.6%


The Underwriters

Class A Common Stock

J.P. Morgan Securities Inc.
Goldman, Sachs & Co.
Banc of America Securities LLC
Citigroup Global Markets Inc.
HSBC Securities (USA) Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
UBS Securities LLC
Wachovia Capital Markets, LLC


The VISA Prospectus filed with the SEC

The VISA Prospectus from EDGAR Online