How Do I Sign Colorado Banking Word

How do i industry sign banking colorado word later

you jibley Jambu the new canoe zontivity marcheeta ugh apples of you can use the trippity Babji call I mean you keep on talking but you don't know where to turn now welcome to the weekend I'm John caldera president of the independence Institute you watching independent thinking so how's your bank doing is your money safe if you're at all worried just write a check to me and I'll keep careful to talk to us about it Don children's who's from the Colorado Banking Association curses the Bankers Association glad to have you here thanking all so you know them from the Denver Post I'll Louis thank you for being here you're homeless for Dow Jones and more importantly if you want to talk to to how you just go to talk to Al calm tell it to Al Faletau thank you tell it to al.com and then you get all the out Lewis you want all the records all the albums the movies dvds everything you want alright let's talk a little bit about the bank failures okay let's start here in Colorado and then maybe work our way way I there have been a fair amount of bank bankruptcies here in Colorado we were talking before about one up and Greeley which was not a small little moment bank was a large one Queen the details we've had two bank failures in Colorado this year none for years prior to that nationally we had 25 last year were about 30 right now will in the year we think with a hundred or so probably but by historical perspective that's actually very few in nineteen ninety the last year we were severely tested we had ten a week in this country that include the SNL's now those were commercial banks so can we had ten a week yes 534 and hundreds in the years before and after that we made it through that and we had actually half the capital in the banks that we have today so there are a lot of meaningful distinctions from that last test one of them for a second because I ok that's interesting cuz this is feeling now that banks are just you know destroying here and there and everywhere they're going out of business here in Colorado you say in the last year there's only been two bank that have gone under was forced to too many but historically you're saying that's not that not that high I think the banks are in quite good shape one of the issues we face is that the public tends to misuse the term bank there's a precise definition is basically the institutions that can use the word bank in their name and their fdic-insured which means they're subject reams of government regulation and frequent examinations but nobody knows how to refer to hedge funds brokerage houses pension plans insurance companies etc which are all in the lending business and financial services and so they use the shorthand bank the general public then when they read something about a brokerage house in trouble it gets reported as Bank such as the iWatch the headline since last September the bank bailout headlines I almost never refer to a bank it's been happened so they're the distinctions between what is a bank what is an insurance company what is an investment bank have been blurred since 1999 when we got rid of glass-steagall which basically allowed banks to go into Investment Banking without investment banks to go into banking allowed all everybody to sell insurance products so the distinction brank bank is a pretty broad term because of that secondarily investment banks on Wall Street which all got bailouts which in some form or another you know it began with Bear Stearns you know Merrill Lynch was sold to bank of america there's another company with bank in its name but but what I'm trying to say is all these investment banks became banks and so when you talk about a failing bank you know broadly I mean a lot of financial institutes are institutions are generically called banks indymac which failed some called a bank some call it a Savings and Loan about bringing here to Colorado the oven really it was new frontier frontier this was no small mosque 1 billion dollar it was 1 billion dollar fee to was it to two billion dollar burger why did it go under um I think poor loan underwriting and I'm not here to beat up on the bankers who work there but you mean they gave loans to guys like me well did folks who weren't qualified there seemed to be a portfolio full of those I know they made a lot of good loans and that there are a lot of customers that are now inconvenient at the least because they're having difficulty getting credit elsewhere but the bank simply grew very rapidly it's hard to go through that kind of a growth to 2 billion in 10 years let me see if I understand how this works so if I start off a bank a real Bank all right I fill out all the forms I do all the paperwork and I want to attract a lot of money and I might be able to give questionable guys money in loans they get used to it I give and I give my depositors a little extra interest rate on their investments so it's easier for me to build up but doesn't the government say that I can't give money to risk you guys like al Lewis to agree at great credit risk well you I've never led to you I've never had a bank fail on me when the institution is being examined by the bank regulators they tend to leave them relatively untouched if they're in good condition and there are a lot of things that are tested about twenty three major areas that the examiners review but if they start seeing red flags go up the regulators have the ability and freely exercise it to control what that bank can do and that's in this interest of protecting the safety and soundness of that institution and the whole system when a bank and I do mean bank goes under it has a huge ripple if I take new frontiers bank so that two billion dollars worth of assets and I've been really lots of farmers lots of AG companies a lot of businesses use that that company for their line of credit to make sure that they could pay their bills and do their business and once that bank is closed and if they can't get quickly into another bank then these businesses could for what you tell me why did a sizable bank like any bank that fails fails because of bad alone quality almost almost invariably there's a lot of banks on Wall Street that failed because they bought portfolios of debt right that contains subprime debt but again this is bad loan quality the distinction that I think Don wants to make is that the big banks of our world and I'm talking money center banks like Citigroup and bank of america I'm talking about Merrill Lynch's I'm talking about investment banks I'm talking broadly about the Giants they're all interconnected and they're also interconnected by the way with community banks too but they all made bad bets on portfolios debt that is all going bad right now we don't know the depths of it I mean we recently put some of these big 19 of these big banks through stress tests some of them came out okay you say stressed well what they did was they they assumed certain financial conditions they applied them to the balance sheets of the books and then then this is what that would it's awful the economy got this bad we think these mrs. will go sir would you be able to survive that as a bank right and the result of this is several banks are okay about a half a dozen banks so far have been told they need to get more capital and then the jury is still out on a few others we did the information hasn't been fully week yet but what I'm saying is that easily these big these big money center banks first of all they're all to some extent Ponzi schemes you look at Citigroup you look at Bank of America what do they do they grow right by mergers and acquisitions every year they do another merger and acquisition until they finally get to the point where the economy turns and guess what it looks like they overpaid grossly for all these mergers and acquisitions all these executives and boards of directors you can't call that a Ponzi well I can if I want to I well you can basically what is credibility excuse me what they have done is unsustainable a Ponzi scheme is also unsustainable that what they have done is merger after merger deal if a deal is legal it was bad decisions well there's the difference i guess but we'll we'll see how legal it was before it's all over but here's here's here's the thing not only are they doing mergers and acquisitions but they're building enormous portfolios of junk debt junk i mean the stuff no one knows what it's worth and frankly we haven't gotten to the bottom of it yet even with these stress tests i'm not concerned that convinced that all these big banks don't need more government money but i think you're overstating things you say their portfolios full of junk debt have you seen them do you know what's in there but i really examiner no but i know the government examiners have and they've got pretty good credentials the governing is the government examiners who predicted this whole thing are those that i was talking to fight what is a second they never thought it was risking the Bears blue let's bring it to a little guy okay all right i got i got my three hundred fifty dollars of my my savings account in in a bank yeah is it safe let me ask you that if it isn't what is what you considered me what is technically a bank not it not in my you know ameritrade account but I'm talking about safe in two regards one banking in general is very well capitalized despite what else says ninety-seven percent of any funds ninety-seven percent of the banks are in the highest government rating well capitalized secondly the depositors protected by fdic insurance up to a quarter of a million per account category and so depositors assuming their they have on deposit less than that amount simply don't need to worry the system is designed to protect them it works well that doesn't mean there's never a bank failure but it means the depositors are protected when there is a bank failure