Are banks really getting better?

[StageLeft]

I got this argument from denninger, but is he reading it wrong?

Link1

More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank?s equity and threaten its survival.

Link2

Delinquency rates for loans and leases at U.S. banks increased to a record 6.49% in the second quarter from 5.58% in the first quarter, the Federal Reserve announced Monday.

So if 5% is a magic number and on average US banks are now running 6.49%, what's going on?

 

[dphantom]

We're broke.

 

[RyanPaulShaffer]

The rumors of an economic recovery are grossly exaggerated.

 

[Moonbeam]

Buy a sheet, throw it over you and crawl to the cemetary. We are doomed, but at least we have the satisfaction of knowing that Obama fail.

 

[simpletron]

the delinquency rate is the number of loans delinquency versus the number of loans, whereas in the first article it is non-performing loan amounts to the total loan amounts.

for example if a bank had 10 $100 loans that are delinguency and a 99000 loans that isn't. then it would have a delinquency rate of 89%(10/11), but it non-performing loan percent would be 1%(1000/100K).

Edit:
non-performing loan percent is directly tied to the health of a bank and its revenue because banks get a percent of the loan amounts. whereas delinquency rate is tied to how risky the revenue stream is; it is better to have a lower delinquency rate because that spreads the risk around onto more loans.

 

[Robor]

A friend just got a call from his mortgage company. They have a 80% primary and 20% secondary mortgage on their place (the 20% was used to get around PMI). The loans are 5 year adjustable and were purchased at the height of the bubble. They are currently $90K - $100K under water. Their mortgage company just called them and said they are proactively seeking people who are under water and high risk for forclosure and trying to work something out before it happens.

 

[JS80]

All banks are still insolvent, next wave to come soon.

 

[Budmantom]

Originally posted by: JS80
All banks are still insolvent, next wave to come soon.

I hope things change.

 

[dmcowen674]

Originally posted by: Budmantom

Originally posted by: JS80
All banks are still insolvent, next wave to come soon.

I hope things change.

To what?

 

[moparacer]

Originally posted by: JS80
All banks are still insolvent, next wave to come soon.

Yep, my bank took 300m in tarp money and the stock price has steadily headed downward.

I wish they would get canned by the FDIC now rather then later so we can get it over with....

Dont want to be at the end of the line when the money runs out.

Early bird gets the worm!

 

[Moonbeam]

Oh, woe is me

 

[imported_Lothar]

Originally posted by: JS80
All banks are still insolvent, next wave to come soon.

Are you still going long in SKF?