The official list of problem banks and similar financial lending institutions reached 416 this year, with a few other possible additions waiting in the wings. Officials say that banks, as a economic indicator, typically lag behind the curve, so the recovery signs in other markets come first. However, such a high number of problem institutions is a sign of our weak economy.
Bad loans and a massive number of defaults are partially to blame. The entire system, however, is an increasingly heavy burden on the Federal Deposit Insurance Corp (FDIC). The worry is that if more and more institutions go under, the FDIC might not be able to keep up with the demand.
So, while we continue to hear conflicting reports about the economy being up, then down, jobless claims being up and then down, one thing is certain; the U.S. economy is clearly not out of the woods yet.
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