FDIC shutters Silver State Bank of Nevada

Son of presidential nominee John McCain was reportedly former board member; closing marks the 11th bank failure this year.
Last Updated: September 5, 2008: 10:43 PM EDT

WASHINGTON (AP) — Nevada regulators have shut down Silver State Bank. It was the 11th failure this year of a federally insured bank.

Andrew McCain, son of Republican presidential nominee John McCain was a member of the bank’s board, but recently stepped down for “personal reasons,” according to The Wall Street Journal. The younger McCain, 46, had also served on Silver State’s audit committee, and was only with the bank for five months before leaving on July 26, the Journal reported.

The Federal Deposit Insurance Corp. was appointed receiver of the bank, located in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.

The FDIC said Friday the bank’s insured deposits will be assumed by Nevada State Bank of Las Vegas. Its branches will reopen Monday as offices of Nevada State Bank in Nevada and National Bank of Arizona in Arizona.

The agency said depositors of Silver State Bank will continue to have full access to their deposits.

The 11 failures so far this year compare with three for all of 2007, and federal banking officials have said that more banks are in danger of collapse.

Silver State Bank has operated 12 branches in Nevada and Arizona as well as loan offices in Nevada, Utah, Colorado, Washington, Oregon, California and Florida.

The FDIC estimated its resolution will cost the deposit insurance fund between $450 million and $550 million.

Regular deposit accounts are insured up to $100,000; for some individual retirement accounts, the limit is $250,000.

There were about $20 million in uninsured deposits held in roughly 500 accounts at Silver State that potentially exceeded the insurance limit, the FDIC said.

Concern has been growing over the solvency of some banks amid the housing slump and the steep slide in the mortgage market. The pressures of tighter credit, tumbling home prices and rising foreclosures have been battering many banks, large and small, across the nation.

The largest bank failure by far this year has been that of savings and loan IndyMac Bank, which was seized by regulators on July 11 with about $32 billion in assets and deposits of $19 billion.

The seizure of Pasadena, Calif.-based IndyMac, which was the largest regulated thrift to fail in the United States, prompted hundreds of angry customers to line up for hours in Southern California to demand their money. IndyMac also was the second-largest financial institution to close in U.S. history, after Continental Illinois National Bank in 1984.

The FDIC has been operating the bank, now called IndyMac Federal Bank, under a conservatorship.

The FDIC plans to raise insurance premiums paid by banks and thrifts to replenish its reserve fund after paying out billions of dollars to depositors at IndyMac. The fund, currently at $45 billion, is expected to take a hit from IndyMac of $4 billion to $8 billion.

Federal officials expect turbulence in the banking industry to continue well into next year, and more banks to appear on the FDIC’s internal list of troubled institutions.

Of the 8,500 or so FDIC-insured banks in the country, 117 were considered to be in trouble in the second quarter – the highest level in about five years and up from 90 in the first quarter. The agency doesn’t disclose the banks’ names.

Only 13 percent of banks that make the list fail, on average, and most are nursed back to health or acquired by stronger institutions, according to the FDIC.

Federally insured banks and thrifts set aside a record $50.2 billion to cover losses from soured mortgages and other loans in the April-June quarter, when profits plunged 86 percent from a year earlier.

http://money.cnn.com/2008/09/05/news/economy/bank_closure.ap/index.htm?postversion=2008090522

Fannie Mae, Freddie Mac to be Put Under Federal Control, Sources Say

The government has formulated a plan to put troubled mortgage giants Fannie Mae and Freddie Mac under federal control, dismiss their top executives, and use government funds to prop them up, government officials told the two companies yesterday, according to sources familiar with the conversations.

Under the plan, the federal government would place the firms in a legal state known as conservatorship, the sources said. The value of the company’s common stock would be diluted but not wiped out while the holdings of other securities, including company debt and preferred shares, would be protected by the government.

Instead of giving each company a big capital infusion up front, the government plans to make quarterly infusions as the companies’ losses warrant, the sources said. This would be an attempt to minimize the initial cost of the rescue.

As the pace of discussions accelerated today, Treasury officials contacted senior congressional leaders, telling them they might be briefed on the plan this weekend and asking for telephone numbers at which they could be reached.

Fannie Mae and Freddie Mac have backed 70 percent of new mortgages in recent months, but have incurred vast losses on their loan portfolios as the housing market has tanked. Treasury Secretary Henry M. Paulson Jr., the architect of the plan, and other government leaders have said the companies remain vital to preventing an even broader financial crisis and economic downturn.

The chief executives of the two companies were called into afternoon meetings today at the 17th Street NW offices of the Federal Housing Finance Administration, their direct regulator, according to sources familiar with the events.

Executives of the two companies were told to show up without being told of an agenda. Daniel Mudd, chief executive of Fannie Mae, was accompanied by outside lawyers. He showed up at around 3 p.m. for a two hour meeting. Richard Syron, chief executive of Freddie Mac, started his meeting at around 5 p.m., accompanied by several members of the Freddie Mac board.

Paulson, Federal Reserve Chairman Ben S. Bernanke, James Lockhart, the director of the housing finance regulator told the executives of the plan, which would strip them of their jobs.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/05/AR2008090503351.html?hpid=topnews

Flood alert as storm poised to hit UK

Britain will be buffeted by heavy rain and strong winds today as the first major storm of the autumn gets under way.

Parts of the UK have been warned to expect more than two weeks of rainfall in 24 hours, and forecasters say there is a risk of localised flooding across the country.

South-west England and south Wales have been battered since the early hours and the rain is expected to head north east throughout the day, hitting Northern Ireland and the south of Scotland by mid-afternoon.

Paul Mott of MeteoGroup, the weather division of the Press Association, warned that up to 50mm of rain was expected in the next 24 hours, as much as would be typically seen in a fortnight in September.

Experts warn that after an unusually-wet August the ground is saturated the risk of flooding is increased across the UK

Gusts of up to 50mph will make it a “thoroughly miserable” day according to Mr Mott, who advised commuters to leave extra time for their journeys because of the weather.

Mr Mott said: “For most areas it will be a wet and miserable day, and we would advise people to take care on the roads and allow extra time for their journeys.

“There will be some localised flooding in Wales and the north east in areas that are prone to it, but we’re not expecting widespread flooding.”

“It’s going to remain unstable over the weekend. There will be rain, sometimes heavy rain, through the UK with northern England bearing the brunt of it.

People in Gloucestershire are bracing themselves for another night of heavy rain after storms swept into the region, causing flash floods.

Downpours overnight and this morning led to road closures in the county and firefighters had to pump out floodwater from homes.

Residents are now preparing for the possibility of more flooding after forecasters predicted downpours to continue throughout the night and into the morning as the South West feels the brunt of a storm coming in from the Atlantic.

The Met Office has issued a severe weather warning for the region until this evening and say around 2in of rain is expected.

Severe weather warnings are also in force for Wales, the north west, north east, south west and south east of England as well as London.

Gloucestershire County Council has put services on high alert after learning from the lessons of the major floods which wreaked havoc throughout the county in July last year.

Around 13 houses in Lakeside Avenue, Lydney, have been affected by flash flooding and householders say it is the second time this year the street has been deluged.

http://www.independent.co.uk/news/uk/home-news/flood-alert-as-storm-poised-to-hit-uk-919930.html

Hanna to hit Atlantic Canada with heavy wind and rain

Wet weather will be headed to Atlantic Canada this weekend, with heavy rain and gale-force winds from tropical storm Hanna predicted to hit the area by Sunday, according to the Canadian Hurricane Centre.

The tropical storm was expected to make landfall on the northern coast of South Carolina early Saturday before cutting a path up the Atlantic seaboard.

But before Hanna hits the East Coast, a separate weather system is expected to pummel the region, the hurricane centre said.

CBC meteorologist Johanna Wagstaffe said it could bring 25 to 40 millimetres of rain to Nova Scotia and New Brunswick on Saturday.

When Hanna arrives in Atlantic Canada on Sunday, it is expected to transition to a post-tropical storm, possibly dumping more than 100 mm of rain.

“But there’s still a lot of variability in the track,” Wagstaffe said, adding the amount could double.

Storm-surge waves of one to three metres are forecast for Saturday and could go up by Sunday and Monday, when Hanna hits.

The forecast storm activity has prompted the Red Cross to advise people in the region, especially residents in flood-prone areas, to be prepared.

Meanwhile, central Ontario is feeling the remnants of Hurricane Gustav, with up to 40 mm of rain expected in the North Bay area on Friday.

http://www.cbc.ca/canada/story/2008/09/05/hanna-atlantic.html

Hanna closes in on Carolina coast

MIAMI, Florida (CNN) — Tropical Storm Hanna sped toward the southeastern coast of the U.S. on Friday, and forecasters predicted that the storm would strengthen slightly before reaching land Saturday.

As of 5 p.m. ET, Hanna was about 240 miles south of Wilmington, North Carolina, carrying maximum sustained winds near 70 mph with higher gusts, just below hurricane status of 74 mph, the Miami-based National Hurricane Center said.

The storm, which had spent several days meandering around the southern Bahamas, was moving north at a fast clip of about 20 mph, and forecasters expected it to speed up even more Saturday before turning northeast.

On this track, Hanna’s center would remain off the Florida and Georgia coasts Friday afternoon and evening and make landfall in the Carolinas in the early hours of Saturday, according to hurricane center projections.

A tropical storm warning extends from Altamaha Sound, Georgia, to Sandy Hook, New Jersey, including all of Chesapeake Bay, the tidal Potomac River, Washington and Delaware Bay.

The center said the storm is likely to strengthen only slightly but warned that it is still possible for Hanna to become a hurricane before hitting land.

Meanwhile, Ike — “a small, but impressive hurricane” — is still far out in the Atlantic, forecasters said, but they warned that it could come ashore in southern Florida as a Category 4 storm by Tuesday night.

North Carolina and South Carolina opened emergency centers in anticipation of Hanna’s arrival, and North Carolina Gov. Mike Easley declared a state of emergency, as have the Maryland and Virginia governors.

No mandatory evacuation orders were issued in either North Carolina or South Carolina, but South Carolina Gov. Mark Sanford urged the voluntary evacuation of two northeast counties.

Charleston, South Carolina, has prepared for the worst. Workers began boarding up city buildings this week, and firefighters filled and distributed sandbags to residents and business owners. Backup generators were fueled and positioned at key locations across the city.

City offices were closed Friday in anticipation of the storm, as were Charleston County schools.

In Wrightsville Beach, in coastal North Carolina, stores and businesses remained open as the community wrapped up its summer season.

“We look at it more or less like a nor’easter, a bad storm with some wind and rain and hopefully not a lot of damage,” Mayor Stephen Whalen said.

Some buildings were boarded up, and billboards were taken down in Morehead City, 92 miles north of Wrightsville Beach, said Jamie Fulk, the deputy chief for the fire department.

“We’re prepared. We’ve done all we can do to get prepared; we’re basically waiting to see what the storm is going to do,” he said. The “public’s very much aware of what’s going on. … [They're] waiting to see if it’s going to intensify.”

Tropical storm-force winds extended up to 290 miles from the center.

“People are reminded that there is very little difference between a strong tropical storm and a minimal hurricane,” forecasters said.

http://www.cnn.com/2008/US/weather/09/05/hurricanes.hanna.ike/index.html

Secret Service confiscates books & buttons from Ron Paul delegates

Today at the Republican National Convention, as the Ron Paul Delegates were taking a picture in front of the model White House inside the Convention Center, they were surrounded by Secret Service which proceeded to search the bags of all the delegates. They took any and everything related to Ron Paul including signs, buttons, videos, slim jims, cards, even books.

Alternate Delegate Dennis Rothacker from Florida said “We were done taking the picture when Secret Service started walking into the room and surrounded us. There were about 30 of them. When they searched my bags they took my Ron Paul sign and turned a deaf ear to my complains, they just walked away.”

Delegate Ron Warner from Fairbanks Alaska added that as he was walking into the convention center today with about 15 Revolution Manifesto books, 20 DVD’s for Delegates, 20 Ron Paul buttons and a handful of other things, we was stopped by security which called on an obviously important higher up, who directed all the materials to be confiscated. She told him, and I quote “You can’t bring that in here, this is Mc Cain territory”

Dennis, Ron and the other delegates report being openly followed by secret service. He says that they had been monitored from the beginning of the convention, but that now they are being shadowed constantly.

There are also reports of delegates being approached by security and told that they will be summarily thrown out if they leave their assigned chair.

19:07 PM – EST St. Paul, MN

The alarm was sounded at 6:07 PM – EST when a text message was hurriedly sent by Republican delegate Dennis Rothacker to ‘Boris in Miami’ from the convention floor.

“We just had a group shot of all the RP delegates and alternates, the secret service came and started searching everyone and took anything RP related. We got it on video though…”

Updated @ 8:18 PM – EST

Ron Paul delegates report that they have been shadowed by Secret Service since the beginning of the Republican National Convention at the Xcel Center, following the confiscation of their political materials they are now being surveilled openly with an agent assigned to each delegate. When one of the delegates asked if they could retrieve their property after the convention they were told, “No.” not satisfied with that answer the delegate tried to follow the agent to make additional inquiries, he was told this action was causing a disturbance and a security agent was told to stay with him for the rest of the evening. For their safety the Ron Paul delegation have decided to stick together as a group while approaching the media with their story.

Updated @ 9:32 PM – EST

McCain delegates at large have approached Ron Paul delegates throughout the day in attempts to seperate them from their all important delegate credentials. Adam Weigold, delegate from Minnesota, reported he has been approached at least five times by other Republican delegates supporting McCain-Palin who asked him to borrow his pass to go the bathroom. Nathan Hanson (MN) delegate and attorney suspects this is an organized effort by the GOP establishment.

The Ron Paul delegation will be staying at the Xcel Center until the end of the nights events around 11:00 PM – EST.

http://www.dailynewscaster.com/2008/09/04/secret-service-confiscates-books-button-from-ron-paul-delegates/#comment-1432