November 7, 2009 in Business

In brief: Four banks closed, for ’09 total of 119

 

Charlotte, N.C. – Regulators on Friday shut small banks in Georgia, Michigan, Minnesota and Missouri, bringing the number of bank failures this year to 119 amid the struggling economy and a cascade of defaults on loans.

The Federal Deposit Insurance Corp. took over United Security Bank in Sparta, Ga., Home Federal Savings Bank in Detroit, Prosperan Bank in Oakdale, Minn., and Gateway Bank in St. Louis.

The failure of the four banks is expected to cost the federal deposit insurance fund an estimated $132.7 million.

With United Security, 21 Georgia banks have failed this year, more than in any other state. Most of the failures have involved banks in the Atlanta area, where the collapse of the real estate market brought economic dislocation. Failures also have been especially concentrated in California and Illinois.

Associated Press

Bailed-out AIG posts profit again

New York – American International Group, the insurance giant whose near-collapse last year prompted a massive federal bailout, on Friday posted its second consecutive quarterly profit as some of its units continued to stabilize and improved financial markets boosted the company’s bottom line.

The New York-based insurer reported a third-quarter profit of $455 million, or 68 cents a share, compared with a $24.47 billion loss, or $181.02 a share, during the same period last year, according to a regulatory filing.

AIG said Friday that it continues to shrink the number of trades and the outstanding exposures at its troubled Financial Products unit, where complex credit derivatives contracts nearly destroyed the parent company last year and led to an unprecedented government intervention.

Washington Post

U.S. natural gas on clock, Pickens says

Dallas – Investor T. Boone Pickens, who has spent more than a year telling Americans the answer to their energy woes is natural gas, says the U.S. natural gas supply will probably dry up in about 30 years.

At that point, Americans will have to find some other technology to fuel vehicles, Pickens said during a speech Thursday at the University of Texas at Dallas.

“Natural gas is just a bridge,” he said.

“Twenty-five, 30 years is what we’re going to get out of it. Then you’ll have to get over to either fuel cells or battery. You’ll have to be on to some other transportation fuel by then,” he said.

Pickens has spent $62 million of his own money, and most of his time since July 2008, promoting the Pickens Plan to get the U.S. off foreign oil. He suggests switching vehicles to domestic natural gas instead of using foreign oil. He also wants the country to add more wind power to the electrical grid.

Dallas Morning News

Consumers continue drop in borrowing

Washington – Consumers borrowed less for a record eighth straight month in September amid rising unemployment and tight credit conditions. Economists worry the declines in borrowing will drag on the fledgling recovery.

The Federal Reserve said Friday that borrowing fell at an annual rate of $14.8 billion in September. That’s the biggest decline since July and was larger than the $10 billion drop economists expected.

Associated Press

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