Posted On: Friday, August 01, 2008, 10:32:00 PM EST

Spin Versus Economic Law

Author: Jim Sinclair

Dear Friends,

On and on it goes.

You can spin it every day 24 hours a day, but economic law will not allow the end of the day to be altered. The FT will look at the weakness that has set the stage for such events and the local US media will praise the FDIC?s instant action.

I really don't want to see you in one of those lines because financial TV tells you that all is well and to buy the dollar and lots of shares of those really cheap financials.

International and US media will report this event in diametrically opposed perspectives.

Note that this was first published at 6:56 EDT after all major equity and debt markets closed, leaving an entire weekend to package the spin.

The only problem is all banks that fail following this. The pictures of lines of worried depositors published in the Financial Times is going to mute the publishing of skewed data on any other factors such as inflation and crude, making them all side shows. The system is broken and cannot be put back together again by the application of more of the monetary explosion that created all the bubbles that got us here.

Let?s not forget to thank the manufacturers and distributors of all those OTC derivatives that have killed the financial system and all of us to some degree.

Protect or perish, it is up to you.

Respectfully yours,

Jim

Florida bank closed by FDIC

First Priority Bank becomes the eighth bank failure of the year. Branches will reopen as Sun Trust Bank.

By Ben Rooney, CNNMoney.com staff writer

Last Updated: August 1, 2008: 7:33 PM EDT

NEW YORK (CNNMoney.com) -- Federal regulators in Florida closed First Priority Bank Friday, marking the eighth bank failure of the year.

The Federal Deposit Insurance Corporation, which was named the receiver of the failed bank, entered into an agreement with Atlanta-based SunTrust Bank (STI, Fortune 500) to assume the insured deposits of First Priority.

All six branches of the Bradenton, Fla.-based bank will reopen on Monday as branches of SunTrust. First Priority depositors will automatically become depositors of SunTrust, the FDIC said.

First Priority had assets of $259 million and total deposits of $227 million, according to the FDIC. That includes $13 million in uninsured deposits held in approximately 840 accounts that potentially exceeded the federal insurance limits.

Account holders with more than the $100,000 insured limit will essentially "become a creditor" of the failed bank, said FDIC spokesman Andrew Gray.

Those accounts will be credited as the FDIC sells more of the failed bank's assets, Gray said.

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