In case you didn't see it, the last few days have seen some interesting things happen over in FDIC land.
Last week, the FDIC took down two micro banks. These small institutions basically imploded in one quarter, a pattern that has not been the norm in terms of bank closures. Most are allowed to struggle along for as many as 5 to 8 quarters before facing the inevitable. These are different. Disaster strikes quickly. The pattern first appeared with the demise of La Jolla Bank in San Diego when a large fraction of their commercial R.E. loans went sour en masse. The question I asked at the time was "how many other banks on the edge are looking at 'walk away obligor' risk?"
Last week tiny Arcola Homestead Savings Bank in Illinois and First National Bank of Rosedale, MS also did dramatics power dives to oblivion. Also last week the FDIC shut down long struggling Tier One Bank in Lincoln, Nebraska.
You can look at them on IRA's Casualty List Forensics page if you like.