1,600 More Banks Expected to Fail in 2009

January 31, 2009

By Benjamin Train
President, Online Consultancy Network

As goes January so goes the year. January ended with grim
news on jobs, stocks, shipping, banking, retail, services,
airlines, bankruptcies and more. Companies across various
sectors announced more than 100,000 job cuts last week
alone.

The stock market decline, that started over a year ago,
picked up some steam in January 2009 to end the month with
the Worst January in recorded history for the Dow, and the
S&P 500, according to Stock Trader's Almanac data.

The Dow lost 8.8% and the S&P 500 lost 8.6% in the month.
The Nasdaq's loss of 6.4% was eclipsed by last January's
loss of 9.9%. That 2008 loss was the worst in the tech
average's history, going back to its inception in 1971.

Treasuries purchases will depend on risk:

"Future purchases of US Treasuries by China will depend on
its need to protect the value of its foreign investments and
a stable yuan," said Chinese Premier Wen Jiabao

The Baltic Dry Index is at the lowest point since I have
been monitoring it, for the last 16 years. Harbors are
filling up with surplus ships. Harbor Masters are rejecting
ships as Harbors fill with surplus ships. Trading volumes in
the last quarter of 2008 were down in both the dry and wet
markets. Baltic Exchange members are at the heart of world
trade, arranging for the ocean transportation of industrial
bulk commodities from producer to end user.
Visit http://www.balticexchange.com/

The International Air Transport Association (IATA) released
international scheduled traffic results for both December
2008.

In the month of December global international cargo traffic
plummeted by 22.6% compared to December 2007. The same
comparison for international passenger traffic showed a 4.6%
drop. The international load factor stood at 73.8%.“The
22.6% free fall in global cargo is unprecedented and
shocking. There is no clearer description of the slowdown in
world trade."said Giovanni Bisignani, IATA’s Director
General and CEO.

The number of containerships laid up is growing daily.
According to French maritime consultant AXS-Alphaliner, 255

ships, equivalent to 675,000 teu in capacity (5.5% of the
global containership fleet), were laid up as of January 19
this year. It projects that the volume of container ships on
standby will jump to the equivalent of 750,000 teu in early
February this year, accounting for 6% of the entire global
boxship fleet.


Oil and Energy shares on the Rise:

Crude-oil futures were up Friday, $1.53 at $42.96, while
gold futures gained $17.70 to $922.80. The dollar was firmer
overall against major counterparts, but gains were capped as
investors embraced more risk, shaving off some safe-haven
flows into the U.S. currency.


Gold Hits 16-Week High, Nears Key Resistance:

Spot gold rallied to a three-and-a-half month high Friday on
a mix of safe haven demand and short-covering.
The rally took gold closer to a key resistance at $930 a
troy ounce, which it may challenge later next week.
Despite gold's strength Friday, traders were skeptical the
metal could close above $930/oz, the high of last October.

"Technically it's overdone but sentiment is carrying it at
the moment," said a London-based trader.


Cities Taking a Plunge:

Property tax revenue plummets with home values, dragging
U.S. Cities and Counties into massive budget shortfalls.
Many major U.S. Cities and States are set to fail, as their
economies implode.

Commercial real estate defaults rose in December and are set
to move into double digits as major lease holders vacate US
shopping centers in droves. As retail store closures and
bankruptcies continue, Cities, Counties and States that rely
on tax income, will fail to meet their budgets and
obligations. Continued layoffs, existing retirement
programs, and worker benefits are in the cross-hairs.

Below is a partial list of stores that informed the SEC of
closing plans between October 2008 and January 2009.


Ann Taylor- 117 stores nationwide
Lane Bryant
Eddie Bauer to close stores 27 stores and more after January
Fashion Bug
Circuit City stores
Catherine's to close 150 store nationwide
Cache will close all stores
Talbots closing down all stores
J. Jill closing all stores
GAP closing 85 stores
Footlocker closing 140 stores more to close after January
Wickes Furniture closing down
Levitz closing down remaining stores
Bombay closing remaining stores
Zales closing down 82 stores and 105 after January.
Whitehall closing all stores
Piercing Pagoda closing all stores
Disney closing 98 stores and will close more after January.
Home Depot closing 15 stores
Macys to close 9 stores after January
Linens and Things closing all stores
Movie Galley Closing all stores
Pacific Sunware closing stores
Pep Boys Closing 33 stores
Sprint/ Nextel closing 133 stores
JC Penney closing a number of stores after January
Ethan Allen closing down 12 stores.
Wilson Leather closing down all stores
Sharper Image closing down all stores
K B Toys closing 356 stores
Loews to close down some stores
Dillard's to close some stores.
Gottschalks Stores Filing Banruptcy


1,600 more Banks May Fail in 2009:

Analysts said the economic reports confirmed weak housing
and a struggling economy. Many forecasters are looking ahead
to next Friday's January jobless data with much trepidation.
"There's a continuing drumbeat of layoff announcements every
day. Everyone is bracing for a bad one," said Jack
Ablin, chief investment officer at Harris Private Bank.

Last week, Federal Regulators moved to guarantee $80 billion
more in uninsured deposits at the powerful institutions and
clearing houses that service the nation's credit unions.

As banks scramble to feverishly dump foreclosed homes at
deep discounts, values are going down from 50% percent to
75% percent, bank loan portfolios are about to take another
major blow, from failures in the commercial real estate
sector.

This will cause bank regulators to further sharply de-value
the banks assets and push bank closures throughout the U.S.
and beyond. Utah's MagnetBank became the fourth bank failure
of the year on Friday, and the Federal Deposit Insurance
Corp. was forced to directly refund depositors after being
unable to find another institution willing to take over its
operations.

Fewer banks failed in 2008 than expected despite the
catastrophic failures of major U.S. thrifts like IndyMac and
Washington Mutual, the American Banker reported. But the
banks that have yet to fail, will do so this year as
commercial asset valuations plunge.
www.americanbanker.com/topic.html?id=20071004HFB2JIZR

To help give you some idea what I am writing about here,
consider the fact that the entire "home mortgage crises" was
based on $1.5 trillion dollars. The commercial real estate
bubble represents $25 trillion U.S. dollars. Admittedly,
that is not even close to the emerging markets bubble of $80
trillion, and of course the $100 trillion in debt backed
derivatives that continues to be backed by AIG, U.S.
taxpayers and others.

I further expect that the Federal Deposit Insurance Corp.
(FDIC) to become insolvent this year. Many bank officials
agree with me. The FDIC has boosted its Key Staff by 140
ahead of expected bank failures this year. According to the
Huffington Post the FDIC may borrow money from the
Treasury for the expected bank failures ahead.

And, if you think this will be over any time soon, read
today's New York Times: Geithner Sets Limits on Bank
Lobbying, but according to the Wall Street Journal,
Geithner's new Chief of Staff is Former Bank Lobbyist. Get
the idea?

I really hope that you are not listening to all the hype,
mis-information and lies being told to you by the major
media. This financial collapse is not a surprise. It has
been planned for many years. We wrote about it and explained
what you had to do to be ready for it over 7 years ago. This
current financial meltdown is not a result of "reckless
deregulation and lack of oversight". It was engineered.

I am expecting February to be announced as the worst
economic month in recorded history, and 2009 the worst years
in America. I anticipate more than 1,600 bank closures and
and a "Bank Holiday" to be announced in 2009. I hope I am
wrong.

It's "a continuing disaster" for the nation's families,
declared President Barack Obama last week, making what has
become an increasingly urgent daily sales pitch for his $819
billion stimulus package.

For those of you unfamiliar with the former Illinois
attorneys background, may I suggest you look into the
sub-prime financial engineering, Countrywide Bank, and many

of the recipients of the Freddie & Fannie in the form of
sweetheart deals, including the ACORN Housing Corporation
and community organizations involved with him.

I am not suggesting he was one of the engineers, but that he
may know more than you are hearing. Perhaps members of the
Trilateral Commission, David Rockefeller and the Bank of New
York executives may know more.

“You can’t bail out everyone, yet economic recovery is not
possible unless certain critical asset sectors are not only
reliquefied but rejuvenated in price,” wrote Bill Gross,
co-chief investment officer of Pacific Investment Management
Co., the world’s biggest bond fund. Does this statement
sound like the commercial bond market is a good place in
invest your future retirement savings? I'll let you think
about that one for a while.

$3.6 trillion and counting. Fortune Magazine is reporting
that the Bank bailout could cost $4 trillion dollars. Banks
don't have enough capital to fix their problems, that is why
they are not lending into the public or private credit
sectors, which means "the Obama administration may need a
lot more money to clean up the financial mess." "Citigroup,
Bank of America, Wells Fargo, etc are gigantic black holes
that will suck in every dollar available." according to Mike
"Mish" Shedlock a registered investment adviser
representative for Sitka Pacific Capital Management, and he
is right in every way.

For the record, the "Bad Bank" formation being launched in
Germany and "discussed" here in the U.S. media is not a good
idea for Americans. Do not, under any circumstance let your
State, or Federal representatives sell you that black hole.

It will take what is left of America with it.

Get Involved The State of the Union's Finances:
A Citizen's Guide:
http://www.pgpf.org/getinvolved/

If you would like to learn a bit more about our economy, may
I suggest you read:
http://www.theworldiscurved.com/

"The World Is Curved" is an essential read for those who
wish to understand the workings, politics, and distresses of
the global financial system. David Smick has done an
outstanding job in drawing on his interactions with many of
the key players in international finance to produce an
insightful and entertaining book.”
—Alan Greenspan
Former chairman of the Federal Reserve Board; author of The
Age of Turbulence