Economist: FDIC gearing up for bank closures
By Daniel at 8 July, 2009, 12:22 pm
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The Federal Deposit Insurance Corporation is setting up temporary operations on the First Coast and plans to hire 500 people.
The FDIC expects to have a satellite office located in the Baymeadows area open by early this fall.
“It’s a wonderful win for our community,” said Jerry Mallot with the Jacksonville Chamber of Commerce.
“Great paying jobs, absolutely, way above our normal pay scale in our community.”
The jobs are advertised as paying more than $60,000, with some jobs topping $100,000 a year.
The FDIC is handling the application process on line.
Debbie Antal said she made application last week, hoping her eight years in banking qualifies her for a job with the FDIC.
“I’ve been unemployed now for just about two weeks, but it feels like two years,” said Antal.
The FDIC says it needs people with skills in law, accounting, marketing, finance and bank operations.
The local office will manage receiverships and assets of troubled banks located on the East Coast
http://www.firstcoastnews.com/news/local/news-article.aspx?storyid=141074&provider=rss
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Economist: FDIC gearing up for bank closures
Washington Business Journal - by Janet Leiser Contributing Writer
The Federal Deposit Insurance Corp. is gearing up to handle a large number of bank failures expected as a result of bad mortgages, both in residential and commercial real estate, an economist said Tuesday.
“They know they’re going to take down a large number of banks and they can’t do it until they’re staffed up,” said Mark Dotzour, chief economist and director of research for the Real Estate Center at Texas A&M University.
Dotzour expects federal regulators to establish an agency, similar to the Resolution Trust Corp. that disposed of assets belonging to insolvent S&Ls in the late 1980s and early 1990s.
“Once they start to sell [foreclosed real estate], we’ll find out what the market really is,” Dotzour told attendees at an economic summit hosted by a handful of real estate groups in Tampa, Fla.
Dotzour blamed federal intervention for the lack of commercial real estate investment activity in recent months, as well as the failure of businesses to make major decisions.
“Nobody knows what to do so they’re doing nothing,” Dotzour said at the luncheon meeting at the Intercontinental Tampa.
Government, in its quest to help the economy, is causing harm by propping up failing companies and regularly changing rules, he said.
“No one can predict what the government will do,” Dotzour said.
“People are frozen. It’s not that they don’t want to invest in the future, the rules are unclear,” he said.
He jokingly called the Federal Reserve “inksters” for routinely printing money to bail out big business, including banks that are still not making many loans.
The government’s role in a capitalistic society, he said, “is to make the rules and get off the dance floor.”
Businesses and individuals that can’t pay their bills should resolve their problems in bankruptcy court, not with money from the government, he said. It’s a process that has worked for decades, for generations.
“Everyone has a lesson to learn here, including you and me,” he said. “We have to live within our means.”
Dotzour expects foreclosure rates to continue to climb, real estate prices to fall more and cap rates to rise to at least 9 percent before leveling off.
In 2010 and 2011, interest rates will begin to rise, as will inflation. Once investors realize the market is at bottom, deals will begin to flow again, he said.
In the meantime, he compared the bad loans that remain on banks’ books to a smelly cat litter box and the feds keep throwing more litter on top to mask the smell. But they’ll eventually have to remove the organic material to fix the problem.
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