Downey and PFF - (2) California Banks Seized By FEDS

Downey Bank of California and PFF Bank and Trust, has been seized by the FEDS late yesterday. So far this year there have been 22 bank failures. This represents the most Bank failures since 1993, when 50 banks failed. This one is a big folks and is estimated to cost the FDIC 1.4 billion dollars.

Something else to take Notice of , the FEDS have become much quieter in their latest round of Bank seizures. You won't even find this one on the AP wires which tells me that the FEDS have become increasingly 'tight lipped' about subsequent bank seizures. One of the more interesting (and conspiratorial) thoughts I've heard in multiple places is that FDIC may have chosen to do "stealth seizures". Typically when FDIC siezes a bank they come in Friday evening at close of business and examiners begin looking at accounts to see what is covered and what isn't. The idea behind stealth seizures is to a) Not spook the market b) make it look like whoever assumes the accounts bought them from the failed institution c) make it look like the bank sold out or merged with another bank rather than being assumed by FDIC. Interesting theory and given the shenanigans going on in the world of finance right now it is plausible.

It seems as though no sooner SBYnews announces one bank closure then another springs up.

http://news.yahoo.com/s/nm/20081122/bs_nm/us_financial_failure_downey