CalculatedRisk predicts 2010 to account for more number of failures than 2009 but lesser than the peak of 534 in 1989.
My prediction is the FDIC will close more banks in 2010 than in 2009 (more than 140), but fewer banks than in 1989 - peak of the S&L crisis (534 banks).
I do not disagree. But I think there is a need to understand how deep the rot is and how long before we see stabilization.
Unemployment and Bank FailuresA study into historical relation between the Saving and Loan crisis of 1982 to 1989 and unemployment rate, reveals that Bank failures take years to peak after Unemployment rate has peaked. Unemployment rate peaked in 1981 and steadily fell after that. At the same time, Bank failures mounted with nearly 2000 banks brought to their knees in about 6 years with 1989 accounting for nearly 534 of them.
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