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Economy - Economics USA

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Ty Andros

Many analysts are calling an end to the recession.  No way, we are only in a countertrend bounce in economic activity before the next leg DOWN.  One has to look no further than the incredible bounces of 50% or more in markets halfway to the lows from 1929 to 1933, or in post-bubble Japan since 1989 to see the parallels.  The social welfare states of the G7 and their spawn known as FIAT currency and credit financial systems have just masked the unfolding death of their economies.  As public serpents, er…servants implement their plans for MISERY SPREAD WIDELY, also known as SOCIALISM, which forces more and more desperate voters into their grasp.

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• AP

Investors are still trading common shares of Fannie Mae, Freddie Mac and American International Group Inc. by the billions, even though analysts say their prices are almost certain to go to zero.

All three are majority-owned by the government and are losing huge sums of money. The Securities and Exchange Commission and other regulators lack authority to end trading of stocks in such “zombie” companies that technically are alive - until the government takes them off life support.

 

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Throughout the financial crisis, huge sums of money have been spent, handed out and lost. With talk of billions upon billions being passed around, it’s easy to lose perspective on how much $1 trillion or even $1 billion really is.  With official measurements of American currency from the US Bureau of Printing and Engraving and the US Mint, here’s some perspective on what these huge sums of money would actually look like and how they would compare to every day objects.

What would the money allocated to the TARP actually look like? How high would the AIG bonuses pile up if the bills were stacked one on top of another? How big, literally, is the National Debt?

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• Reuters

Problem U.S. banks and thrifts on an official watchlist rose more than a third to 416 in the second quarter of 2009, as bad loans continued to bite, but regulators saw signs of stabilization in the industry. The Federal Deposit Insurance Corp said the industry swung back to a $3.7 billion loss in the second quarter, after reporting a

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• Nathan's Economic Edge

Are you tempted? The Temptations – Get Ready: Remember me? Wall Street repackages toxic debt. Wall Street may have discovered a way out from under the bad debt and risky mortgages that have clogged the financial markets. The would-be solution probably sounds familiar: It's a lot like what got banks in trouble in the first place. In recent months investment banks have been repackaging old mortgage securities and offering to sell them as new products, a plan that's nearly identical to the complicated investment packages at the heart of the market's collapse. "There is a little bit of deja vu in this," said Arizona State University economics professor Herbert Kaufman.

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• WSJ

The FDIC's insurance fund, which guards $6.2 trillion in U.S. deposits, fell to $10.4 billion at the quarter's end, the lowest since mid-1993.. Data released Thursday painted a gloomy picture of the state of banking. The government fund that protects consumer deposits fell to its lowest level since 1993. The continuing woes, which come despite trillions of dollars in government rescue financing and a rebounding stock market, raised questions about how quickly the economy can revive. The Federal Deposit Insurance Corp. said it had 416 banks on its "problem list" at the end of June, equivalent to about 5% of the nation's banks, up from 305 at the end of March and 117 at the end of June 2008. Problem banks had a combined $299.8 billion of assets at the end of June, compared with $78.3 billion a year ago. Landing on the FDIC's problem list means a bank is at a high risk of insolvency. State and federal regulators have already shut 81 banks this year.

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• Financial Times

Comment mine - it sure does they privatized the profits and then socialized the losses! In the build-up to the global crisis of 2008, tiny Iceland was a canary in the mine, a leading indicator of wider vulnerabilities. Now, amid growing optimism about global recovery, Iceland may again be a leading indicator of trouble ahead. In the space of a few days last October Iceland’s whole banking system collapsed and was taken into public ownership, including the three banks which went from nowhere in 2002 to rank among the world’s 300 biggest by 2007. These three now make it into a less glorious league – Moody’s list of the 11 biggest financial bankruptcies in history. The country’s average income fell from 160 per cent of the US’s in 2007 to 80 per cent this year. First, the freeze on mortgage repayments is due to end in November. The fifth of mortgages that are in yen or Swiss francs face a doubling of payments. Krona mortgages also face big increases in payments because they are t

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• Reuters

The Obama administration’s plan for reining in derivatives leaves unchecked one of Wall Street’s dirty little secrets: the ability of a derivatives dealer to redeploy cash collateral that gets posted by one of its trading partners.

On Wall Street, this practice of taking collateral and reusing it is called rehypothecation. In essence, it’s a form of free money for derivatives dealers to use as they please — even to repost it as collateral to finance their parent company’s own borrowings.

 

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• Reuters

U.S. banking regulators partially retreated from a much-criticized proposal to impose new rules on private equity investment in troubled banks, aiming to encourage responsible investment in distressed banks.

The 4-1 vote by the Federal Deposit Insurance Corp board was a partial victory for potential investors and some regulators who had warned that an initial proposal unveiled in July threatened to scare away much-needed capital.

 

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• Breitbart

The real US unemployment rate is 16 percent if persons who have dropped out of the labor pool and those working less than they would like are counted, a Federal Reserve official said Wednesday. Lockhart pointed out in a speech to a chamber of commerce in Chattanooga, Tennessee that those two categories of people are not taken into account in the Labor Department's monthly report on the unemployment rate. The official July jobless rate was 9.4 percent. Lockhart, who heads the Atlanta, Georgia, division of the Fed, is the first central bank official to acknowledge the depth of unemployment amid the worst US recession since the Great Depression. "If one considers the people who would like a job but have stopped looking -- so-called discouraged workers -- and those who are working fewer hours than they want, the unemployment rate would move from the official 9.4 percent to 16 percent, said Atlanta Fed chief Dennis Lockhart.

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• AP

The government agency that guarantees you won't lose your money in a bank failure may need a lifeline of its own.

The coffers of the Federal Deposit Insurance Corp. have been so depleted by the epidemic of collapsing financial institutions that analysts warn it could sink into the red by the end of this year.

That has happened only once before -- during the savings-and-loan crisis of the early 1990s, when the FDIC was forced to borrow $15 billion from the Treasury and repay it later with interest.

 

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• LiveScience

A recent analysis of the 2007 financial markets of 48 countries has revealed that the world's finances are in the hands of just a few mutual funds, banks, and corporations. This is the first clear picture of the global concentration of financial power, and point out the worldwide financial system's vulnerability as it stood on the brink of the current economic crisis.

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• American Thinker

The Obama administration on Tuesday acknowledged that Obamanomics, the dismal science of spending other people's money as fast as possible, honed with ward bosses and union kingpins on Chicago's South Side, has failed. They did so, not in so many words and probably without knowing it, while hammering Americans with a devastating and demoralizing one-two blow -- one a sucker punch, the other below the belt. With the sycophants in the Obama press corps distracted while rubbing elbows with the Obamas and other rich folk on the Vineyard, the O Team threw their sucker punch: officially announcing that the federal budget deficit next year will be nearly 20% more than in their first forecast made just last May, and over the next ten years will be two trillion dollars more than they had predicted. That's two million million dollars more than Obama had forecast. Just 90 days ago. Oops. Even ballpark hunches should be closer than that. Obama's estimate of the te

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• The Street

Four more banks went into Federal Deposit Insurance Corp. receivership on Friday, bringing to 81 the total of FDIC actions in 2009. Including FDIC bank closings in 2008, the total for the current financial crisis is now 104. Assets of these 104 banks totaled $146.7 billion. How does this compare with other crises in recent history? The worst banking crisis since the Great Depressionwas, until 2008, the savings and loan crisis that spanned 10 years from the 1980s into the 1990s. Total assets involved in that crisis were $519 billion. Adjusting for inflation, using the consumer price index, that is $923 billion in 2009 dollars. That dwarfs the current size of bank failures under the FDIC program in this crisis.

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• Alternet

If you're living on the streets, engaging in the biological necessities of life -- like sitting, sleeping, lying down or loitering -- will get you in jail. It's too bad so many people are falling into poverty at a time when it’s almost illegal to be poor. You won’t be arrested for shopping in a Dollar Store, but if you are truly, deeply, in-the-streets poor, you’re well advised not to engage in any of the biological necessities of life — like sitting, sleeping, lying down or loitering. City officials boast that there is nothing discriminatory about the ordinances that afflict the destitute, most of which go back to the dawn of gentrification in the ’80s and ’90s. “If you’re lying on a sidewalk, whether you’re homeless or a millionaire, you’re in violation of the ordinance,” a city attorney in St. Petersburg, Fla., said in June, echoing Anatole France’s immortal observation that “the law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges.”

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• Cluster F Nation

All this goes to show is how completely the people in charge of things in the USA have lost their minds. They seem to think this mass exercise in pretend will resurrect the great march to the WalMarts, to the new car showrooms, and the cul-de-sac model houses, reignite another round of furious sprawl-building, salad-shooter importing, and no-doc liar-lending, not to mention the pawning off of innovative, securitized stinking-carp debt paper onto credulous pension funds in foreign lands where due diligence has never been heard of, renew the leveraged buying-out of zippy-looking businesses by smoothies who have no idea how to run them (and no real intention of doing it, anyway), resuscitate the construction of additional strip malls, new office park "capacity" and Big Box "power centers," restart the trade in granite countertops and home theaters, and pack the turnstiles of Walt Disney world - all this while turning Afghanistan into a neighborhood that Beaver Cleaver

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Written By:

Susan Trimbath an expert? Give me a break. She forgot to mention that CMKX was revoked and now insiders being sued by the SEC for securities fraud. Naked shorting had nothing to do with it. And her credentials...certified liar

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• Economic Policy Journal

WSJ features a page 2 column today that has this doozy of a point in it: For the administration, the answer is clear: Err on the side of continued expansionary policies...For fiscal conservatives, the answer is equally clear: Start cutting the federal deficit and slowing the growth in the money supply now... Earth to WSJ, the money supply (m2 nsa) is not expanding. The money supply peaked in February when it hit 8244.9 billion. Preliminary July data now shows money supply at 8326.7 billion. The stock market and economy are about to crash again because of this.

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• FT.com

T he global economy is starting to bottom out from the worst recession and financial crisis since the Great Depression. In the fourth quarter of 2008 and first quarter of 2009 the rate at which most advanced economies were contracting was similar to the gross domestic product free-fall in the early stage of the Depression. Then, late last year, policymakers who had been behind the curve finally started to use most of the weapons in their arsenal. That effort worked and the free-fall of economic activity eased. There are three open questions now on the outlook. When will the global recession be over? What will be the shape of the economic recovery? Are there risks of a relapse? More.....

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• BlueLoriBlogSpot

Sure Tax Cheat Tim we believe you! ""I don't think the financial system is reverting to past practice, and we won't let that happen," Mr. Geithner said. "The big banks are running with much less leverage now, much more conservative liquidity cushions, there's been a significant shrinking of their balance sheets, getting rid of bad assets and cleaning up. And the weakest parts of the system don't exist anymore." Some banks, including those that received government bailout money, are earning record profits, increasing pay and ramping up risk. Goldman Sachs Group Inc., for instance, recently recorded its most profitable quarter ever and boosted its degree of risk-taking as measured by how much money it could lose in a single day." "The consequence of achieving stability is that people can raise money, can raise equity, can borrow more easily at lower rates, that these markets have liquidity again," Mr. Geithner said. Read

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• The Star

OTTAWA–The International Monetary Fund says most countries will need to raise taxes to pay off the trillions of dollars they spent fighting the global recession. IMF chief economist Olivier Blanchard says in an article to be published today that governments acted properly in ramping up spending to stop the worst slump since World War II. Soon, he says, nearly all countries will have to raise taxes to pay the recovery bill.

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• BlueLoriBlogSpot

Enzio von Pfeil, CEO of EconomicClock.com told CNBC the Global stock markets could crash in October as the much hoped-for economic recovery fails to materialize he explains in the video below... Could this be the reason our Foreign Embassies are stocking up on cash?

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• Freedom Fighter Radio

Martial Law will then be declared because of the rioting and deliberate desired control over our people. Restricted travel and checkpoints on all major interstates as regions are effected. Massive gun confiscation (supposedly for our safety, of course). If you don’t think they are coming to your door to try to take them, think again!!!  

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