Regulators closed four more banks on Friday, seizing their assets and deposits and placing them with other financial institutions.

Two of the four failed banks were absorbed by companies that had received taxpayer capital through the $700 billion Troubled Asset Relief Program.

The banks were in Florida, Michigan, Wisconsin and California, cutting a new, $145 million hole in the Federal Deposit Insurance Corporation (FDIC) fund as the credit crunch continues to claim victims. They had earlier been reported here on the Unofficial Problem Bank List.

The FDIC reported the following bank closings:


Port Orange, Florida's Sunshine State Community Bank, which had $116.7 million in deposits as of December 31 was closed. The bank’s failure will cost the deposit-insurance fund $30 million, the FDIC said.

Troy, Michigan's Peoples State Bank was also closed. The bank had $389.9 million in deposits as of December 31 and its failure will cost the deposit-insurance fund $87.4 million.


Cassville, Wisconsin's Badger State Bank, which had $78.5 million in deposits, was closed. Badger State Bank’s failure will cost the deposit-insurance fund $17.5 million.

Palm Springs, California's Canyon National Bank was closed. Canyon National Bank had $205.3 million in deposits as of December 31 and its failure will cost the deposit-insurance fund $10 million.

I was talking to my father last night about the economy and the prospect that some companies may not make it through the crisis. Pop was born in 1923 and he started reeling off the names of companies that were around when he was a child that he thought were rock-solid but no longer exist. He knew all their stories -- who the players were; why they failed; how much money he or one of his friends lost when another one went belly-up or got swallowed up by a bigger fish.

• Arthur Andersen - Founded 1913. Dissolved 2008.
• Dean Witter Reynolds - Founded 1924. Merged with Morgan Stanley 1997.
• Drexel Burnham Lambert - Founded 1935. Died a slow death 1990-1992.
• E.F. Hutton & Co. - Founded 1904. E.F. Hutton merged with Shearson to become Shearson Lehman Hutton, Inc. and then acquired by Primerica which was swallowed up by Smith Barneywhich was acquired by Citigroup.
• First Boston - Founded 1932. Retired by Credit Suisse 2006.
• H. F. Ahmanson & Co. - Founded 1927.  Acquired by Washington Mutual 1988.
• Kidder, Peabody & Co. - Founded 1865. Sold to Paine Webber 1995.
• Paine Webber - Founded in 1880. Acquired by Swiss bank UBS AG in 2000.
• Mutual Benefit Life Insurance Company - Founded 1845. Liquidated in 2001.
• Salomon Brothers - Founded 1910.  Now part of CitiGroup.

My grandfather was a 33rd Degree Freemason who built a construction company in New Jersey. He was a hard-working, self-taught businessman who made the Wall Street Journal daily required reading for my father. By the time Pop was 12 years old, he had a paper route and a grocery delivery business manned by three 12-year old kids he hired from the neighborhood. Pop is 86 years old now and he's seen it all -- the good times and the bad.  The only piece of advice he gave me, before he hung up the phone, as he reflected on the financial turmoil we're experiencing now was, "Son, what goes up must come down.  But eventually, it will go up again."

The Commodities Futures Trading Commission (CFTC) has always had the power to set a minimum Adjusted Net Capital for FOREX dealers who, unlike futures brokers, hold customer funds and could potentially expose customers to their own financial risk. 

In just ten days, on October 31, 2008, FOREX firms with less than $10 million in capitalization will be forced cease operating as a retail FOREX broker by CFTC.  Firms will be further tested on January 17, 2009 when the minimum capitalization required will be increased to $15 million and again on May 16, 2009 when the minimum goes to $20 million.  In addition, the capitalization requirement for firms which offer 100:1 leverage or more will double to a minimum of $40 million.

The table below lists FOREX companies that were under the $10 million minimum as of the August 2008 FCM report to CFTC.

With America on the verge of financial crisis, people are thinking seriously about pulling their deposits out of their local banks.  Most of us think the term "deposits" mean funds that you deliver to the bank for safekeeping, but for nearly 200 years, the courts have sanctioned an interpretation of the term "deposits" to mean a loan to your bank.

Combine that fact with the latest headlines you’re reading about big name banks needing bailouts and you have a rude awakening of just how unsafe your bank may be.

Get expert, informed, and independent information on what you can do to protect your money, right now.

Elliott Wave International, the world’s largest market forecasting firm, has just released a free report, Discover the Top 100 Safest U.S. Banks.

• - The Top 100 Safest U.S. banks (two for each state)
• - How you can choose a safe bank.
• - Five incredibly risky banking conditions.
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• - Tips on international safe banking.