People don’t want to borrow and banks are holding on to their money because the supposed capitalization provided by Uncle Sam is really just being held for the losses coming in 2010 – and, so:
‘Problem’ Banks Rise to 15-Year High on Bad Loans, FDIC Says
The U.S. added 111 lenders to its list of “problem banks” in the second quarter, a 36 percent increase that pushed the group to a 15-year high.
A total of 416 banks with combined assets of $299.8 billion failed the Federal Deposit Insurance Corp.’s grading system for asset quality, liquidity and earnings, the most since June 1994, the Washington-based FDIC said in a report today. Regulators didn’t identify companies deemed “problem” banks.
“For now, the difficult and necessary process of recognizing loan losses and cleaning up balance sheets continues to be reflected in the industry’s bottom line,” FDIC Chairman Sheila Bair said in a statement.
Regulators have taken over 81 banks this year, including Guaranty Financial Group Inc. in Texas and Colonial BancGroup Inc. in Alabama. Twenty-four banks collapsed in the second quarter as the pace of failures accelerated amid the worst financial crisis since the Great Depression.
It isn’t over, people; not by a long shot.
In the end, though, its all good – we were stupid to borrow so much money. Total US debt in relation to GDP is 375% – we’re so far in the hole we can’t even see the light of day. To be sure, Bernanke lit up a flashlight and is telling us that is the light at the end of the tunnel, but what he’s really done just just put another pile of debt out there for us to pay off. We’re in for a long, slow period of getting out of debt – the people are already on it, Obama and his Democrats are a bit slow on the uptake. Seriously, are any of you out there contemplating a major increase in personal debt? Looking forward to maxing out the credit cards this Christmas?
Why this means we’re in for a pretty bad economy is that our economy has been built on debt – easy credit allowing for massive over consumption. This, in itself, wouldn’t have been particularly hideous if we had also retained productive capacity – but, we didn’t. We outsourced our productive capacity to China and elsewhere – and we did this because we’re just plain and simple getting lazy. We’re unwilling to get our own hands dirty. We’re unwilling to allow hard working people to open up factories, plant crops, dig mines – a bunch of dirty-necked hippies show up and we shut down the jobs of the hardest working among us. Makes me sick, when I think about it. Liberals want green jobs – hey, idiots, we could be getting 90% of our electric power from nuclear plants by now if you hadn’t watched The China Syndrome and thought it real.
We need an economy restructured for earning money, first, and then spending it. Making, mining and growing things – it really is the only thing which can lift us out of this. We can earn the money to get out of debt, and then save up money so that when things get tight we’re not firing up the printing presses or begging Chinese tyrants for a loan. We can do this – but not while Obama and his Democrats are running the show.
Blogs For Victory 