FED Closes 28 Branches of Two Banks

[Issachar]

CARSON CITY, Nev. (AP) - The 28 branches of 1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California, were closed Friday by federal regulators.

more (http://apnews.myway.com/article/20080726/D925G0B00.html)

Issachar

[Chariots]

My understanding from some bank failures here in the MidWest in the last two weeks is the following.

1) The FDIC can't bail out a flood of bank failures based on their reserve funds being limited.

2) They are encouraging bank mergers in every situation. Larger banks are given the go ahead to scoop up failing local or regional banks.

This may stave of immediate concerns but I don't know if it is good logic to take a large bank with a good to poor balance sheet and use their reserves to buy up bad or failing banks. Sounds like robbing Peter to pay Paul.

Notice also the Bank of Australia took a 90% write of on it's US assets on Friday after the market closed.

http://www.businessspectator.com.au/bs.nsf/Article/NAB-will-shock-Wall-Street-GV4M7?OpenDocument&src=sph

Doesn't look encouraging for the financial stocks next week.