According to a report released today by the American Bankruptcy Institute (ABI), there have now been 1.046 million personal bankruptcies since the start of the year. This is the highest since the first nine months of 2005 when people were rushing to file before the draconian new bankruptcy act of 2005 took effect (still better than the Victorian days of debtor prisons, but not much).   The institute expects to see the total for the year top 1.4 million. I think they are being conservative, especially given the rise in the unemployed, particularly the long-term unemployed. In September, there were 124,709 consumer bankruptcies, up 41% from a year ago. The graph below (from http://www.calculatedriskblog.com/) shows the history of bankruptcy filings since 1996 by quarter. The third quarter numbers come from the monthly ABI numbers; the quarterly numbers are from the administrative office of the U.S. courts.   If ...

Less than two weeks after Federal Deposit Insurance Corporation (FDIC) seized Colonial BancGroup’s (CBCG) banking operations, the holding company filed for Chapter 11 bankruptcy protection yesterday. Most of Colonial’s banking assets were sold to BB&T Corp. (BBT).   The shutdown of Colonial BancGroup’s banking operations is the biggest bank failure so far this year, and the sixth-largest in U.S. history.   The estimated cost of Colonial BancGroup’s failure to the deposit insurance fund would be $2.8 billion. The FDIC and BB&T have signed an agreement to share losses on about $15 billion of Colonial BancGroup’s loans and other assets.   BB&T expects losses in the loan portfolio acquired from Colonial BancGroup’s banking operations of $5 billion will not have a negative impact on its earnings because of its loss-sharing agreement with the FDIC.   For the last several quarters the holding company posted losses as a result ...

Yesterday, Taylor, Bean & Whitaker Mortgage Corporation filed for Chapter 11 bankruptcy protection after it was forced to shutter its mortgage lending operations earlier this month. The Ocala, Florida-based company had captured 1.7% market share nationwide by creating $17 billion of mortgage loans from January to June, 2009. On that basis, it was the 12th largest mortgage lender in the U.S. Taylor was also one of the largest U.S. home loan providers not owned by a large bank. As a result, there was lack of significant amount of deposits that could help cushion its capital position in the troubled market environment. The company filed for bankruptcy due to recent actions taken against it by the Department of Housing and Urban Development, and mortgage financiers Freddie Mac (FRE) and the Government National Mortgage Association (Ginnie Mae). Further, the negative developments at Taylor were related to ...

According to the American Bankruptcy Institute, or ABI (http://www.abiworld.org/AM/Template.cfm?Section=Home&CONTENTID=58351&TEMPLATE=/CM/ContentDisplay.cfm) consumer bankruptcies soared to their highest level since the bankruptcy laws were changed back in September of 2005. That change made bankruptcy much more painful for the individual debtor, and was responsible for the huge spike in filings shown on the graph below (from http://www.calculatedriskblog.com/). Note that the third quarter number shown in the graph is estimated at 3x the July filing rate of 126,434. This is probably a conservative estimate. The July rate was 8.7% higher than June, and up 34.3% from a year ago. Since the start of the year, 802,000 individuals have filed for bankruptcy. The July rate would equate to 885,000 people going bankrupt, so clearly we are still in an uptrend, and historically the number of bankruptcies peaks well after a recession is over. The report did not specify the ...

March 7, 2009 ndash; The markets are in terrible shape, arguably, the economy is in worse shape. This week we saw a pickup in job losses, higher unemployment rates across the nation and as a whole, heightening concerns that the government really has no answer to solve the financial marketrsquo;s crisis while the markets reacted in turn, moving to levels we havenrsquo;t seen in 12 years. Here is the dismal prognosis for the week: middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; The Markets ndash; The DJIA and Samp;P fell to 12-year lows. The DJIA has dropped nbsp;more than 20% since inauguration day (this is a spurious factoid, we think but one that dickheads like Rush Limbaugh are trumpeting on the airwaves so we might as well acknowledge it) . The DJIA closed at 6,626.94 on Friday, down 6% on the week, down 24% year-to-date and down 50% since the economists and lsquo;expertsrsquo; acknowledged back in January, ...