But Obama says things are getting better:
he cascade of bank failures this year surpassed 100 on Friday, the most in nearly two decades. And the trouble in the banking system from bad loans and the recession goes even deeper than the number suggests…
…Bank failures have cost the FDIC’s fund that insures deposits an estimated $25 billion this year and are expected to cost $100 billion through 2013. To replenish the fund, the agency wants banks to pay in advance $45 billion in premiums that would have been due over the next three years.
The FDIC won’t say how deep a hole its deposit insurance fund is in. It can tap a credit line from the Treasury of up to a half-trillion dollars to cover the gap.
The list of banks in trouble is getting longer. At the end of June, the FDIC had flagged 416 as being at risk of failure, up from 305 at the end of March and 252 at the beginning of the year…
It was the end of June when the FDIC rated 416 banks at risk – its now the last part of October: anyone want to bet me the number has gone down? We can be pretty sure it hasn’t because if it had, the number would be out there. We can probably expect – given the number of Fridays left in 2009 – about 30 more banks to be seized…but that will leave hundreds at risk, and the FDIC is holding off on taking them over for lack of funds. Unless things turn around massively in 2010 – and there’s no indication they will – we’ll have several hundred bank failures next year.
But that’s not all – the supposed profits of the larger banks? Entirely bogus – they’d all be indicted for fraud except for the fact that Obama is protecting them. If you thought Enron’s accounting was corrupt, wait till you see what comes out in the by and by about our major financial institutions. They are all functionally insolvent and in 2010 as the smaller banks fall by the scores and hundreds, those big banks will be looking for another bail out. But where is the money for it to come from?
Its going to go from bad to worse – and made much worse by the happy talk out of the Administration and Wall Street which is convincing suckers to buy stocks. As long as we’re not creating new wealth – by increasing the amount we make, mine and grow – we’re just spinning our wheels and piling up more debt…
As an aside: for you liberals out there who will try to ignore this or spin it away, just for a moment be honest with yourselves and realize what you’d be doing if Bush were still President and we had 105 bank failures.
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