Pages

 

Government Won't Bailout BankUnited

0 comments
The South Florida Business Journal is reporting Government won’t help with BankUnited purchase.
The U.S. government won’t aid private groups that are considering a purchase of struggling BankUnited Financial Corp., The Wall Street Journal reported Friday.

In a story citing “people familiar with the matter,” the paper said the government declined to provide assistance to a bid by investors W.L. Ross and Carlyle Group to buy BankUnited, the largest Florida-based bank.

The BankUnited thrift had $291.9 million in total risk-based capital on Dec. 31, which left it nearly $1.14 billion short of meeting the capital ratio the OTS’s required.

In a phone interview Friday, BankUnited CEO Ramiro Ortiz said he wouldn't comment on the Wall Street Journal report, which he called rumor and speculation.

"We continue to remain actively involved in negotiations with different private equity firms," Ortiz said. "This is an incredible franchise, which has an incredible franchise value. This is a bank that is important to the community. How could I not step up to the challenge?"
Step Up To The Challenge

I would like to see BankUnited CEO Ramiro Ortiz "step up to the challenge" with his own wealth and buy into the "incredible franchise" that his management team ran into the ground.

The market cap of Bank United is $8.2 million. If it's such an incredible franchise why not buy half of it for $4.1 million, or at least 10% for $820,000?

Insider Transactions



Note there were no insider purchases for 6 months. However, insiders did take the opportunity to dump 408,268 shares.

Bank United Headlines



The government has decided the collapse of BankUnited doesn't constitute a risk to the financial system, suggesting that the administration may allow smaller institutions to fail.

That statement likely seals the fate of Bank United. The problem is not the failure of the government to bailout Bank United, but rather that government bails out any failing or failed bank.

Kiss Bank United Goodbye

Given the government's decision to not help such banks, expect to see a huge wave of banks headed into receivership in the coming months. This is a good thing. It's time to stop wasting taxpayer money and let these failed banks go under.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

0 comments:

Post a Comment

Subscribe to: Post Comments (Atom)
  • Greenspan's Cult of Personality... Review topics and articles of economics: Alan Greenspan was a legend in his time and there was no shortage of praise for him back then. For example, who can forget Bob Woodow's 2000 book Maestro: Greenspan's...
  • Yes Tyler, Low Interest Rates Matte... Tyler Cowen is wondering whether the Fed's low interest rates in the early-to-mid 2000s really were that important to the credit and housing boom of the early-to-mid...
  • The Eurozone Crisis: Deja Vu... Review topics and articles of economics: Randal Forsyth sees similarities between the current unfolding of the Eurozone crisis and that of the U.S. financial crisis a few years back:Just as the problem on this...
  • Charles Plosser and the Burden of F... The Economist's Free Exchange blog is shocked to hear this from Federal Reserve Bank of Philadelphia President Charles Plosser:"Since expectations play an important role...
  • Arnold Kling and Expected Inflation... Review topics and articles of economics: What do we know about expected inflation? According to Arnold Kling not much if we look to financial markets:I'm also not convinced that we can read expected inflation...
  • A Paper on Stabilizing Nominal Spen... Given the recent discussion on stabilizing nominal spending as a policy goal I found this article by Evan F. Koenig of the Dallas Fed to be interesting: The article...
  • Why The Low Interest Rates Mattered... Review topics and articles of economics: This is the second of two posts detailing why the Fed's low interest rate policies in the early-to-mid 2000s was one of the more important contributors to the credit and...
  • Why The Low Interest Rates Mattered... This is the first of a two-part follow up to my previous post, where I argued that the Fed's low interest rate policy was a key contributor to the credit and housing...
  • The Stance of Monetary Policy Via t... Review topics and articles of economics: There has been some interesting conversations on the stance of monetary policy in the past few days between Arnold Kling, Scott Sumner, and Josh Hendrickson. Part of...
  • Scott Sumner's New Best Friend:... Joseph Gagnon is calling for $6 trillion more in global monetary easing. This should not be too hard to implement since the Fed is a monetary superpower.Update: The...
 
Review topics and articles of economics © 2011 Government Won't Bailout BankUnited