We. Are. Screwed.
In the midst of a wave of banking failures criss-crossing the U.S. of part of A. and the very visible weakening of Our own banks--as noted in a recent Jenius post--comes the news that Banco Popular will buy certain branches of Westernbank.
We are screwed.
Banco Popular has long been on My list of major obstacles to Our growth in Puerto Rico. I've said this before, but just think about it while I summarize the issue: When a country has one bank--one--that dominates mortgage loans, personal loans, car loans, credit cards, construction loans, leasing, debit/electronic card processing and basically handles 60-70% of the government's monies (payroll, taxes, revenues from other sources), then you don't have a First World economy, or even a "Second" World economy: you have a Third World economy where the banking cabal says "crap" and the politicians squeak "what color?"
So if Banco Popular is Número Uno, who is/was Number Two?
Westernbank. Number Two indeed.
And is Banco Popular soaring with the eagles, rising above the competition to scan the horizons? Eagle, My ass: it's more like a dodo. Check out the losses it's having...reported just last week. So how in the name of Adam Smith is a bank that's drowning, and grabbed some $935 million in TARP money, how the hell can a failing bank buy an even weaker failing bank?
Simple: it makes for a "clean" FDIC whitewash. They literally kill two birds with one stone, by giving one Puerto Rican bank a chance to leverage the valuable assets of another Puerto Rican bank without another dime of "pure gringo money" getting involved. I'll make it clearer for you numbnut "My party is right" morons out there: the FDIC is letting Banco Popular rape Us even harder so they don't have to try to bail it out.
Do you think Banco Popular isn't going to leverage what's left of Westernbank to stabilize its position? Do you think Banco Popular is going to "rebuild" Westernbank, rather than extend itself and dominate the only region of the Island where Popular was not dominant, the western side of Puerto Rico? You think Popular, after this multi-billion dollar bonanza, will actually sell their cash cow, Evertec? You think that Banco Popular's situation isn't squarely in the eye and puny puny minds of the Fools who insist government is gang rape and thus better to give it good and hard than to receive?
Oh, yeah, We're screwed. Unless you and several hundred thousand others join Us in strengthening the local cooperatives and make them a viable banking alternative so that We can become--at long last--something other than a central bank puppet economy.
The Jenius Has Spoken.
[Update: 30 April 2010: The New York Times weighs in, lightly, on Our banking crisis.]