Friday, July 4, 2008


Sorry about all the bad news, but the dominoes keep falling. Here is a pretty scary report on the small banks in the U.S. from Paul Kedrosky.

..more than half of those institutions with assets worth between $1bn and $10bn have commercial real estate loan portfolios that exceed 300 per cent of their capital, according to recent FDIC data.

Similarly, almost 30 per cent of US community banks have construction and development loans exceeding 100 per cent of capital.

[Emphasis mine]

In short, a lot of smallish U.S. banks are utterly screwed.