Spot Gold up 25.10% in last 365 days

The year over year price of spot gold is up 25.10% as of today, August 29, 2008.

Capital Gold Group Report: Gold Rises, Heading for Second Weekly Gain; Silver Advances

By Pham-Duy Nguyen

Aug. 29 (Bloomberg) — Gold rose, heading for a second straight weekly gain, as energy costs gained, reviving demand for the metal as a hedge against inflation. Silver also gained.

Crude-oil prices are higher this week, after advancing last week, amid concern hurricanes will disrupt U.S. petroleum production in the Gulf of Mexico. Gold reached a record in March as oil rose toward all-time highs in July.

“If the hurricane does head into the Gulf and cause damage, that would definitely support gold,” said Tom Hartmann, a commodity analyst at Altavista Worldwide Trading Inc. in Mission Viejo, California. . .

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Capital Gold Group Report: World’s Largest Gold Refiner Runs Out of Krugerrands

By Claudia Carpenter
Aug. 28 (Bloomberg) — Rand Refinery Ltd., the world’s largest gold refinery, ran out of South African Krugerrands after an “unusually large” order from a buyer in Switzerland.

The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer.

Coins and bars of precious metals are attracting investors as a haven against a sliding dollar and conflict between Russia and its neighbor Georgia. The U.S. Mint suspended sales of one- ounce “American Eagle” gold coins, Johnson Matthey Plc stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery and Heraeus Holding GmbH has a delivery waiting list of as long as two weeks for orders of gold bars in Europe.

“A lot of people are worried about the dollar, they’re worried about inflation and now we have geopolitical risk with what’s happening in Russia,” said Mark O’Byrne, managing director of brokerage Gold and Silver Investments Ltd. in Dublin. O’Byrne said his company’s sales are up fourfold this year, heading for a record since its founding in 2003.

Gold rose to a record in March and is 25 percent higher than this time last year, while the dollar dropped 7.4 percent against the euro. Silver is up 15 percent in the period.

Salt Lake

French Foreign Minister Bernard Kouchner said European Union leaders meeting in Brussels Sept. 1 will discuss sanctions against Russia after it recognized the independence of two regions of Georgia. U.K. Foreign Secretary David Miliband said yesterday Russia was trying to “redraw the map” of Europe.

Johnson Matthey’s Salt Lake City refinery doesn’t have the capacity to meet investor demand for 100-ounce silver bars, said spokesman Ian Godwin in London. He wouldn’t comment on whether the company may expand capacity or end production.

The refinery usually gets orders for 1,000 ounce bars from banks and silver grains from jewelers, Godwin said.

Rand Refinery has manufactured, marketed and delivered more than 46 million ounces of Krugerrands since the gold coin was introduced in 1967, according to the company’s website. Krugerrands are minted at the South African Mint from gold coin blanks supplied by Rand Refinery.

Gold for immediate delivery rose $2.29 to $829.19 an ounce by 5:24 p.m. in London. Silver gained 10.5 cents to $13.60.

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Capital Gold Group Report: Gold ends up on oil gains as dollar drops vs euro

08.27.08, 4:07 PM ET

By Frank Tang and Jan Harvey

NEW YORK/LONDON (Reuters) – Gold ended higher Wednesday as oil prices rose, boosting the precious metal’s appeal as an inflation hedge, and as the dollar retreated from a six-month high against the euro.

Oil firmed more than $2 a barrel after data showed U.S. crude inventory fell and as fears grew that tropical storm Gustav could hit oil installations in the Gulf of Mexico.

Gold was at $826.05/827.45 by New York’s last quote at 2:15 p.m. EDT (1815 GMT), up from $822.90/824.30 an ounce late in New York Tuesday.

“Gold is mainly supported by a firm crude price,” said Philip Carlsson, Saxo Bank’s global products manager for futures and options.

“I don’t see the market as all bullish though, and should the tropical storm create fewer problems than expected, the sell-off could be immediate,” he added.

Jon Nadler, senior analyst at Kitco Bullion Dealers in Montreal, said that gold buying remained sluggish, and short-term trades could dominate the market until after the U.S. Labor Day holiday next week.

U.S. gold contract for December delivery settled up $5.90 at $834.00 an ounce on the COMEX division of the New York Mercantile Exchange.

The dollar slipped as investors bet the U.S. currency‘s recent jump to 2008 highs against a basket of currencies was too far, too fast given hawkish rhetoric from a European Central Bank policy-maker.

A weaker dollar typically benefits gold, which is often bought as a hedge against weakness in the U.S. currency.

In the longer term, global economic deterioration is expected to support the dollar, as the Federal Reserve is likely to hold rates while other key central banks are expected to cut.

This should keep a lid on gains in gold, analysts said.

Resurgent physical demand for gold coins and bars, which was a key factor supporting gold prices above $800 an ounce, is still supportive, traders say.

Jewellery demand is also expected to pick up going into September, especially in India, the world’s biggest jewellery market.

“Reports state that physical demand out of India is picking up ahead of the approaching festival season that peaks in October for Diwali,” noted Marc Elliott, an analyst at Fairfax.

PLATINUM CLIMBS

Spot platinum, meanwhile, climbed 1.5 percent as traders took advantage of a recent drop in prices to buy into the white metal. Palladium also ticked up 2 percent.

Both metals have suffered from fears weaker economic growth will cut car consumption, denting demand for the platinum group metals as components in catalytic converters.

But after a sharp drop in prices throughout early August, both metals are now bouncing back.

Spot platinum ended higher at $1,434.50/1,454.50 an ounce, up from $1,409.50/1,429.50 late in New York. Spot palladium firmed to $288.50/296.50 an ounce, higher than its previous U.S. finish of $282.00/290.00.

“We believe that palladium is chronically cheap relative to platinum,” said JP Morgan analyst Michael Jansen in a note.

“We actually believe that palladium should be bought on an outright basis in the $250-$275/oz area,” he added.

Silver finished lower at $13.47/13.53 an ounce, ignoring gold’s strength as traders locked in profits, compared with $13.56/13.64 an ounce late in New York late on Monday.

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Capital Gold Group Report: FDIC May Be In Line for Treasury Department Bailout

Cash-Strapped FDIC
By Bernhard Warner
Posted Wednesday, Aug. 27, 2008, at 7:06 AM ET

You can add the Federal Deposit Insurance Corp. to the list of entities that may be in line for a Treasury Department bailout, the Wall Street Journal reports, following an interview with the agency’s chairwoman.

The FDIC is a bit cash-strapped these days as it props up failing banks across the country. It announced on Tuesday that 117 ailing banks are now under its care and that the FDIC holds an astounding $78 billion in distressed bank assets, the Guardian points out. And, the New York Times says, the FDIC sees the banking crisis going from bad to worse.

All this turmoil and further pain explains why the FDIC may need a loaner from the Treasury “to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank,” the WSJ says, after scoring an interview with the FDIC’s Sheila Bair. The agency has gone cap in hand to the Treasury before—in the early 1990s, after the savings-and-loan debacle forced thousands of banks out of business. The FDIC’s Bair reassures the WSJ that a loan would cover short-term operating costs—not losses, she asserts—”for liquidity purposes.”

With inflation running too high for its liking, the Federal Reserve is hinting it will raise the benchmark interest rate, the NYT reports. The paper has decoded the minutes from the most recent Fed meeting in August and concluded: “Expect Fed policy makers to eventually raise their benchmark interest rate in an effort to slow inflation, but they have not agreed to a timetable for the move.” Fed watchers on Wall Street believe “the central bank is carefully watching the trend of rising prices, and is more likely to raise rates than lower them by the beginning of next year,” according to the paper.

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Capital Gold Group Report: FDIC gets ready for bank failures

Regulator, insurer boosts its staff and provisions as it faces its biggest challenge in decades

By Russell Grantham
Cox News Service
Sunday, August 24, 2008

ATLANTA — The Federal Deposit Insurance Corp. is one of those agencies with a low profile but essential role similar to plumbing or electricity — you don’t notice it until the power’s out or the basement’s flooding.

These days, the FDIC’s folks are busier with the financial equivalent of fixing burst water mains and dead power lines.

Seventy-five years after it was launched during the Great Depression, the bank regulator and insurer is facing its biggest challenge in decades. Many banks in Georgia and across the nation have been battered by the slumping economy and troubled loans to home builders, developers and homeowners.

Hundreds could fail, some industry experts predict. That could force the agency to make good on its promise to insure most customers’ checking and savings deposits up to $100,000 and some retirement accounts up to $250,000, putting pressure on its insurance fund.

Is the agency, whose combined insurance funds were technically pushed into insolvency during the savings and loan debacle two decades ago, ready for another banking crisis? And how bad could it get?

Despite the frequent gloom on both Wall Street and Main Street, industry players seem confident in the overall resiliency of the banking industry and the FDIC’s ability to shelter customers from bank failures.

The FDIC, which had shrunk to 4,600 employees from 23,000 at the height of the savings and loan meltdown, has been gearing up for another wave of bank failures.

It’s hiring 70 new employees and bringing back 70 retirees to beef up its teams that swoop in, usually over a weekend, to take over and reopen banks under new management.

The FDIC’s Atlanta regional office, which covers seven states from West Virginia to Florida, also recently boosted its bank examiner and professional staff by about 10 percent, to about 300. The agency is also expected to soon raise the insurance premiums it charges banks and thrifts to begin rebuilding its reserves.

The FDIC won’t discuss its projections, but it has been increasing its loss provisions for expected bank failures and adding institutions to its growing “problem” bank list. The list totaled 90 institutions with $26.3 billion in assets at the end of March. The confidential list is expected to be longer when the FDIC issues an update Tuesday.

“We don’t predict numbers of bank failures,” FDIC spokesman David Barr said. “We do realize that there will be more failures, but it’s something that we can manage.”

Georgia a special concern

Even though most of the headline-grabbing bank and real estate problems center on Florida and California, Georgia is likely to emerge as a hot spot, as well.

The state’s banks, which included 109 community banks that were launched since 2000, built up the nation’s heaviest concentration of loans to home builders and real estate developers. Many of those businesses have since gone belly-up, saddling banks with growing piles of bad debt and foreclosed properties.

Nine of the state’s banks recently landed on a top-25 list compiled by SNL Financial based on the so-called “Texas ratio,” which attempts to gauge how likely the institutions will run into financial trouble.

FDIC officials said they expect the Deposit Insurance Fund, which had $52.8 billion at the end of March, to remain sound.

“The losses would have to be pretty catastrophic” to create a deficit, said Arthur Murton, the FDIC’s director of insurance and research. That’s because, Murton said, under a federal reform law passed after the S&L crisis, the agency was given more flexibility to raise the deposit insurance rates it charges banks whenever needed.

“We have a pretty significant fund, and we have the ability to replenish it,” he said.

How bad will it be?

Certainly the FDIC’s and the banking industry’s challenges so far haven’t come close to the challenges of the 1930s and 1980s. Some 9,000 banks failed in the four years before Congress created the FDIC in 1933. Thousands of institutions also failed during the S&L crisis. Year to date, eight institutions have failed.

Georgia has so far gotten off rather lightly, with no bank failures this year and relatively few during those earlier crises. Eight Georgia banks failed in the late 1930s, and 21 collapsed from 1988 to 1992. The largest so far was last year’s shutdown of NetBank in Alpharetta, with $1.5 billion in deposits.

But both the state and national tallies will grow, industry analysts predict.

They expect possibly hundreds of bank failures nationally over the next few years as more borrowers ranging from homeowners to businesses default on loans. How many will depend on whether the economy enters a recession.

“For a lot of banks, the die has already been cast,” said Jeff K. Davis with FTN Midwest Securities. At the low end, he estimates that roughly 100 banks will fail over the next 18 months if falling crude oil prices and recent gains on Wall Street point to a possible turnaround in the economy. That number could swell to 600 failures if the economy falls into a serious recession, although most will be small community banks, he added.

The FDIC will have to absorb “some expensive failures,” but nothing like past waves of bank failures because banks are generally much larger and better diversified, said Bert Ely, a longtime bank industry consultant who has his own firm in Alexandria, Va. “The banking industry goes into this mess much stronger than it was” in those earlier eras, he said.

Some industry watchers say bank failures could wipe out much of the FDIC’s insurance fund, forcing the agency to collect significantly higher premiums from financial institutions in the future. The eight failures this year are expected to cost $5 billion to $9 billion, potentially wiping out up to a sixth of the FDIC’s insurance fund.

Because of the likely drain on the fund, the FDIC is expected to increase deposit insurance rates as early as next month. Otherwise, the losses will push the fund below a statutory minimum of 1.15 percent of insured deposits. The fund equaled 1.19 percent of insured deposits at the end of March.

“As the FDIC incurs losses, those losses will be passed back to the banking industry,” Ely said. “The real party at risk here is the banks.”

But ultimately, the FDIC can turn to Uncle Sam for help. That’s what happened during the S&L crisis, when billions in losses wiped out an insurance fund that covered savings and loan deposits. Congress stepped in and turned responsibility over to the FDIC in 1989, giving the agency extra time to rebuild its insurance reserves. Still, that fund dropped to a deficit of $7 billion in 1991 before it began to recover.

Sticker shock

The FDIC doesn’t expect a replay of those events, despite the heavy losses the agency expects from this year’s bank failures. The FDIC’s Murton said the initial batch of shutdowns was probably not a good indicator of future trends. The expected losses were skewed unusually high by last month’s failure of IndyMac Bancorp, he said. California-based IndyMac, with $32 billion in assets, was the nation’s third-largest U.S. bank failure. It is expected to cost the fund $4 billion to

$8 billion.

“We had one of the largest and certainly what we think will be one of the most expensive failures at the beginning of the cycle,” Murton said. “We don’t expect to see repeats of that.”

In the event that he’s wrong, he said the FDIC can draw on a $30 billion line of credit with the federal Treasury to continue covering future bank failures. Beyond that, said Barr, the FDIC spokesman, the agency is backed by the “full faith and credit” of the United States. “It’s on the sticker” displayed by federally insured banks, he said.

Gerard Cassidy, a veteran banking analyst with RBC Capital Markets, expects the FDIC to remain sound, even though he projects up to 300 banks will have to close within three years. He expects the FDIC to boost its rates up to 30 percent next month to shore up its insurance fund.

“Although it’s going to be challenging, it’s not going to be all that bad,” said Cassidy, who is credited with devising the so-called “Texas ratio” in the early 1990s to predict which banks or thrifts might fail. “If anyone has a deposit of less than $100,000, they can sleep as soundly as always,” he said.

Second-guessing

Still, the FDIC’s and other bank regulators’ performance is getting mixed reviews. Critics say the agencies were too slow and did too little to steer banks away from risky mortgage loans and heavy concentrations in construction and home-builder loans, which account for much of the industry’s expected losses.

The FDIC also was criticized for its handling of last month’s shutdown of IndyMac. Many people waited hours in long lines to withdraw money or check on accounts.

On the other hand, the agency caused barely a ripple when it shut down several smaller institutions such as Bradenton, Fla.-based First Priority Bank, whose deposits were taken over earlier this month by Atlanta’s SunTrust Banks.

“I was shocked that the FDIC did not have IndyMac on its watch list until a month before” its collapse, Cassidy said. “You may have an inexperienced team. … Remember, for the last 13 or 14 years, the banking industry has been pretty benign.”

Barr, the FDIC spokesman, countered that the FDIC has “a good mix of experienced staff.” He said he’s at a loss to explain the unusual level of anxiety among IndyMac’s customers. “They knew their funds were insured. … They still lined up and took their money out,” he said. “We’ve had three failures since IndyMac and they all went smoothly.”

He said the FDIC and other regulators were also aware of the growing risk level in banks’ loan portfolios, and took action. The agencies issued guidance to banks in 2006 to discourage them from making too many loans to home builders and real estate developers, but they had “a very difficult line to walk” at the time, when banks were still prospering from such lending, he said.

“I feel that we did recognize it and did what we could,” Barr said, but “you don’t want to cause a credit crunch.”

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Capital Gold Group Report: FDIC Head Expects Banking’s Crisis to Worsen

By Eric Dash and Geraldine Fabrikant

Published: August 26, 2008

WASHINGTON — Sheila C. Bair anticipated the mortgage crisis long before most other regulators. But she never dreamed it would wreak so much havoc on so many banks.

Sheila C. Bair of the Federal Deposit Insurance Corporation.

More than a year after the credit crisis first flared, Ms. Bair, the chairwoman of the Federal Deposit Insurance Corporation, warned on Tuesday that the outlook for the ailing banking industry was bad — and getting worse.

The swelling tide of toxic home loans is proving to be even more worrisome than initially feared, Ms. Bair said. She is struggling to clean up the mess and forestall home foreclosures with a plan to ease loan terms for hard-pressed homeowners.

“It is going to be slog to work though this, but there is no easy way to do it,” Ms. Bair said about her plan during an interview in her office here. “We haven’t seen the trough of the credit cycle yet.”

Her downbeat outlook was underscored on Tuesday by the F.D.I.C’s latest quarterly assessment of the industry. The agency said the number of bad loans at banks ballooned to its highest level in 15 years during the second quarter.

Industrywide, bank earnings plunged 86 percent from April to June, to $4.96 billion, from $36.8 billion a year earlier, the agency said.

The F.D.I.C., which guarantees savings and checking deposits, also raised the number of banks on its list of problem lenders to 117, the most since mid-2003.

That is up from 90 at the end of the first quarter. The agency does not disclose which banks are on the list, but it said the troubled lenders had combined assets of about $78 billion.

For all the bad news, American banks are in far better shape than they were in the late 1980s and early ’90s, when the savings and loan crisis claimed hundreds of lenders across the nation.

But some worry that the agency has fewer people — and less money — than it needs to cope with the industry’s latest travails, particularly if several large institutions were to collapse. Nine lenders, most of them small, have failed so far this year. Analysts expect dozens more to run into trouble.

Ms. Bair’s agency is stretched. Dozens of staff members who had been through the banking crises of the early 1990s retired in recent years. Despite her efforts to bring some seasoned examiners back, her small army of examiners is largely untested.

Meanwhile, there are growing questions about the adequacy of F.D.I.C.’s insurance fund, which guarantees repayment on deposit accounts of up to $100,000 when banks collapse. The fund dwindled to $45.2 billion during the second quarter, from $53 billion in the first quarter.

To replenish its fund, the agency will probably have to raise the fees it charges banks by at least 14 cents for every $100 of deposits, according to estimates by analysts. Ms. Bair declined to comment on the likely size of any increase but said the agency was proposing to revamp its fees so that institutions engaging in high-risk practices would pay higher rates.

“It only seems fair,” Ms. Bair, 54, said. Such a move is expected to draw criticism from banks.

How Ms. Bair navigates the financial and political landmines ahead will help determine the course of the banking industry and, by extension, the broader economy. It will also determine her legacy.

“If the agency gets through the credit mess, having handled the bank failures that are to come, she is going to be widely seen as the person who prepared the agency for this,” said Jaret Seiberg, a financial policy analyst for the Stanford Group in Washington. “If the cycle is worse than expected — and if the agency insurance fund isn’t big enough or they didn’t have enough examiners — she will become the fall guy.”

The centerpiece of Ms. Bair’s plan is to modify loans so that people can stay in their houses. “It is something we should put a priority on,” said Ms. Bair, who speaks at a rapid clip.

From her perch at the F.D.I.C., Ms. Bair has become one of the industry’s most influential policy makers and outspoken critics. She issued some of the earliest warnings on the housing market and prodded the Treasury Department to back a comprehensive approach toward freezing low teaser rates on certain adjustable mortgages, a stance that many investors have opposed. She has also walked a fine line between pressuring banks to raise capital and urging depositors to remain calm.

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Capital Gold Group Report: Fed Begins to Focus on Preventing Next Crisis

By MarketWatch

Last update: 12:03 p.m. EDT Aug. 22, 2008

“Banks too important to be left on their own,” Bernanke says.

WASHINGTON (MarketWatch) — Central bankers and regulators are rethinking their faith in the ability of market forces alone to police the increasingly complex global financial system.

In a speech in Jackson Hole, Wyo., Federal Reserve Chairman Ben Bernanke said the Fed’s toughest challenge is not restoring growth, fighting inflation, or providing fragile banks with sufficient liquidity to get through the current financial crisis. Rather, it’s finding a way to prevent the next one. See full story.

The bailout of Bear Stearns in particular represents a failure of the supervisors to monitor the system. Bear wasn’t a particularly large institution, but its assets and liabilities were so thoroughly linked with the rest of the financial world that its failure would have been devastating, Bernanke said. Read the speech.

It’s not that Bear Stearns was too big to fail, it was too interconnected.

Bernanke suggested that the Fed and other bank supervisors need to use a holistic approach, rather than look at each institution in isolation. The explosion of securitization and derivatives in the past few decades has shifted risks in ways that aren’t immediately apparent. A risk that would be manageable for one bank would be unbearable if it applied to all, because systemic risks tend to create illiquid markets.

The regulators also have to clearly explain when and under what conditions financial institutions will be allowed to fail and when they will be bailed out, Bernanke said. To limit moral hazard, bailouts should be structured so that shareholders are wiped out, similar to the way failing banks are now treated by the Federal Deposit Insurance Corp.

Imposing systemwide supervision and regulation won’t be easy to design or cheap to implement. Unintended consequences are certain to appear. But the alternative of doing nothing would consign us to periodic costly boom and bust cycles that could leave us all poorer.
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Capital Gold Group Report: FDIC has 90 Banks on its List of ‘Problem’ Institutions

Regulators Step Up Bank Actions

‘Memorandums of Understanding’ Surge

As U.S. Races to Head Off More Failures

By DAMIAN PALETTA and DAVID ENRICH
August 26, 2008; Page C1

WASHINGTON — Federal regulators have increased the number of struggling banks they have effectively put on probation, forcing them to fix their problems and try to avoid potentially costly failures.

The Federal Reserve and the Office of the Comptroller of the Currency, two of the nation’s primary bank regulators, have issued more of these so-called memorandums of understanding so far this year than they did for all of 2007, according to data obtained from regulatory agencies under Freedom of Information Act requests.

These secret agreements can force banks to take steps including raising capital, cutting back on risky loans and suspending dividend payments.

The depth of problems in the banking sector will become clearer Tuesday, when the Federal Deposit Insurance Corp. updates its list of “problem” institutions. The FDIC had 90 banks on its list March 31. There have been five bank failures since July 11, and many other banks are considered at risk by regulators.

Government officials have been brokering the memorandums with institutions large and small, from National City Corp., a Cleveland bank with $154 billion in assets, to $660 million-asset First Private Bank & Trust of Encino, Calif., a unit of Boston Private Financial Holdings Inc.

Banks are struggling with their worst crisis in a generation amid the deterioration of real-estate and credit markets nationwide.

“The increase in [memorandums] is not surprising given the more challenging market conditions faced by many banking organizations,” said Roger Cole, the Fed’s director of banking supervision and regulation. They “are useful in specifying weaknesses in risk management and other areas that need to be addressed by bank management.”

Because banks don’t have to disclose the memorandums, bank customers and investors generally remain in the dark. In some recent cases, federal regulators haven’t disclosed more-serious enforcement actions against banks until after those banks have failed. Regulators are often wary of igniting a run on the bank, with panicked customers yanking deposits.

Coral Gables, Fla.-based BankUnited Financial Corp. said Monday that its $14 billion banking unit recently entered into an agreement with the Treasury Department’s Office of Thrift Supervision over concerns about capital levels, among other things. BankUnited didn’t specify whether the agreement was a memorandum or some other type of directive, but the regulator is requiring the company to end its option adjustable-mortgage and alternative mortgage businesses.

The inconsistency of public disclosures “is very frustrating as an investor in bank stocks,” said Gerard Cassidy, an analyst with RBC Capital Markets, noting that an enforcement action represents a red flag about a bank’s health and is likely to put the brakes on that company’s growth. “It would be very helpful in an investor’s analysis if they knew that an agreement was already signed.”

For regulators, the memorandums are an early-warning system about troubled banks but aren’t meant to imply that a bank is at risk of failing. They are often a precursor to more-severe, publicly disclosed enforcement actions if conditions don’t improve.

“Enforcement actions, bank failures and so on are sort of trailing economic indicators,” said Oliver Ireland, a former Fed attorney who is now a partner at Morrison & Foerster LLP. “We’re probably not done with all this yet. Not by a long shot.”

Speculation about these pacts is enough to drive a bank’s stock price down. Washington Mutual Inc. took the rare step in June of issuing a statement to knock down rumors that the bank had entered into a deal with its supervisor, the Office of Thrift Supervision.

While regulators wouldn’t disclose the names of banks with which they’ve entered into memorandums, three agencies provided tallies of how many agreements they’ve arranged, offering a snapshot of the problems engulfing the banking industry.

As of June 17, the Fed had entered into 32 memorandums with state-chartered banks and bank holding companies. For all of last year, the Fed entered into 31 such agreements.

The Office of the Comptroller of the Currency, a division of the Treasury Department that supervises national banks, entered into nine memorandums with banks through Aug. 15, compared with six in all of 2007.

The FDIC, which insures deposits at the nation’s banks and thrifts and also is the primary regulator of many smaller lenders, had entered into 118 memorandums as of Aug. 15, compared with 175 for of 2007.

The Office of Thrift Supervision, which supervises federal savings and loans, refused to disclose its data. Senior Deputy Director Scott Polakoff said in an interview that the number had jumped. “We have seen a significant spike,” he said.

“The pendulum has swung” toward tougher regulation, said George Haligowski, chairman and chief executive of Imperial Capital Bancorp Inc. of La Jolla, Calif., one of a handful of firms to publicly disclose in securities filings having agreed to a memorandum.

In certain years during the past decade, regulators issued more memorandums, indicating that regulators are still grappling to figure out how best to deal with troubled companies.

For example, the Office of the Comptroller of the Currency brokered 32 in 1999 and 31 in 2000. The FDIC entered into 198 of these agreements in 2005. Typically, regulators choose to broker a private agreement if they feel management is being cooperative and the bank’s problems can be addressed quickly. The cause of those spikes isn’t clear.

National City, the big Cleveland lender, confirmed it had entered one with the OCC and the Federal Reserve Bank of Cleveland several days after the fact had been reported in The Wall Street Journal.

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Capital Gold Group Report: U.S. Mint resumes gold coin orders on limited basis

Monday, August 25, 2008

NEW YORK (Reuters) – The U.S. Mint said it must allocate the American Eagle bullion coins among dealers to cope with overwhelming demand as it resumed taking orders for the popular coins on Monday.

“The unprecedented demand for American Eagle gold one-ounce bullion coins necessitates our allocating these coins among the authorized purchasers on a weekly basis until we are able to meet demand,” the U.S. Mint told its authorized American Eagle dealers in a memo dated August 22.

Last week, soaring demand forced the U.S. Mint to suspend temporarily sales of the American Eagles, creating a shortage in the one-ounce version of the coins, which are also available in other weights and denominations.

American Eagle gold coins have been popular novelties among collectors and investors since their introduction in 1986. The coins offer people an easy, tangible way to invest in the gold market, as opposed to buying an exchange-traded fund or other financial instrument.

Coin dealers from the United States and Canada reported a surge in buying of bullion coins and other gold products since prices plummeted from highs last month, contributing to supply fears.

The buying spree and the subsequent shortage of the Eagles have improved momentum in gold as market participants interpret it as a sign of increasing retail investor interest in gold and other precious metals.

The Mint said that it will equally divide its Eagles inventory available for sale each week into two equal pools, with the first allocated equally among all authorized dealers, and the second pool distributed according to the dealers’ past sales performance.

Allocation will continue for the American Eagle silver bullion coins, another popular item, the U.S. Mint said.

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