Corus, the big Chicago lending institution, has declared that it is on the brink of failure, its capital depleted after reporting a preliminary $487 million second-quarter loss. This is not really new. The company's auditor had previously warned that it was in trouble. The FDIC will most likely move in, with what will be a fairly large intervention.

The bank had been under federal orders to recapitalize. But its plans, which called for an orderly wind down, were submitted last month--and were rejected within days, the Chicago Tribune notes. This may be a harbinger. The company bet big on the condo craze sweeping the SunBelt states. So did a lot of others. The commercial real estate mortgage fiasco really has not hit home in earnest. But everyone expects it. The issue is whether banks have adequately reserved against the losses. 

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