First Bank of Kansas City - And Others - Fall Into the Government's Arms

I realize that today's bank failure - First Bank of Kansas City being the wilted financial institution- is a relatively insignificant event which shouldn't realistically be compared to the General Motors bankruptcy. However, I found the Wall Street Journal's headline on that day to be so humorous, that I've saved a copy to look at while at work. In case you're new to reading, the headline read "GM Collapses Into Government's Arms". Anyways, I've been looking for a chance to invoke the concept of a corporation's 1) knees buckling 2) falling towards the ground 3) caught and embraced by the benevolent arms of the federal government - into a post title. Because the First Bank of Kansas City has (had) assets totaling only $16MM, I would imagine that it's collapse did not cause any undue strain upon the government's arms. Technically, the cost to the FDIC's Deposit Insurance Fund (DIF) is estimated to be $6MM. Although I'll snidely point out that six million bucks represents a larger percentage of the DIF balance than it would have been if measured at any other time this year, it isn't very much money at all. For instance, Goldman Sachs could easily replenish this $6MM portion of the DIF by donating 23 minutes worth of trading profits to the FDIC (assumes $100MM daily trading profit generated at a constant per second rate ($4327/second) during the 6.5 hours of a standard trading day)

Update - before I could finish writing this post, the FDIC announced the 86th and 87th bank failures of the year, as Inbank and Vantus Bank have both apparently fallen into the increasingly crowded arms of the government. This development ruined the latter part of my post, as I had planned to comment on the fact that a 1 bank failure Friday is a rare thing indeed. Furthermore the failures of Inbank and Vantus Bank will cost the DIF an estimated $66MM and $168MM, respectively. On a $100MM trading day, it would take Goldman Sachs 2.34 days to replenish the DIF for the losses it has incurred as a result of the wilting of these two banks. Sphere: Related Content