The Government Is Bankrupt and Will Destroy The Economy

Most people don’t understand the unsolvable problem the US government has created for itself and its citizens. Sovereign default is beyond a likelihood; it is inevitable. When and which (possibly all) obligations are defaulted on are to be determined. Panicked political decisions, likely in the near future, will produce a complete financial and economic collapse. Hopefully that is the worst [...]

Bill Black on Banks

William Black was one of the tough regulators during the S&L crisis. He knows what is going on and knows what needs to be done. According to Mr. Black: The FDIC is sitting there knowing that it has both the residential disaster and the commercial real estate disaster [and] knowing it doesn’t have remotely enough funds to pay for it. [...]

Banks Not Recovering

I received the following in an email. The emboldening/color emphasis is his not mine. Information shows more rather than less banks on the verge of problems. GOVERNMENT BANK AND MORTGAGE INSURERS HAVE DISCONCERTING FINANCIALS CONCLUSION: The U.S. deficit/borrowing  will be larger as taxpayers will fund these bank and mortgage insurers. I do not think either outlay is in budget. “Agency’s(FDIC) [...]

Political Fatal Conceit

Economists and lawyers think differently. Economists believe incentives are more effective to alter behavior; lawyers believe that coercion via laws is the way to affect behavior. The parable of the Sun and the Wind are illustrative. They are both intent to get a man to remove his overcoat. The Wind tries to blow the coat off, an action which only [...]

Signs of a Recovery?

Here is another interesting chart that the mainstream economists, CNBC and the media probably prefer to ignore so that they can tout the “recovery.” Does this look like things are getting better? The rate of closures is double where we were last year at this point. Whether this means that the banking system is coming apart is difficult to ascertain. [...]

2010 Will Be Worse

Despite the rising stock market, virtually everything else continues to deteriorate in the economy. An earlier post dealt with this anomaly. There literally is not one thing that can be claimed as a positive. And that includes the phony GDP third quarter “improvement” and presumably a better (preliminary) number for the fourth quarter. Here is a quick (not all inclusive) [...]

Looking For A Home, Call the FDIC – They Have A Deal for You

FDIC Fire Sale! 11 Homes For Under $10,000 (PHOTOS) From the Huffington Post: “But for our readers with a slightly tighter budget, we’ve compiled a list of some of the cheapest homes — all $10,000 or less — across the country. One Chicago house, sold for $280,000 two years ago, is now listed by the FDIC at the deeply-discounted price [...]

Jimmy Stewart Wouldn’t Run These Banks

Frank Capra’s George Bailey of Bailey Savings and Loan would surely not recognize our banking system or its accounting. However, Mr. Potter, George’s evil competitor, would probably be right at home with what’s going on. The overhang to any economic recovery is the banking system. There is no way to know how bad the banking problems really are, given the [...]

Why The Economy Will Not Recover

Image via Wikipedia Image by Getty Images via Daylife Nearly six months ago, I taught a course entitled “Surviving the Crisis.” While not knowing how this crisis will end (either now or back then), I was pretty sure that it could not end given the economic policies put in place. At that time, I stated: “From the standpoint of economics, [...]

Worst Bill Ever. What About the Constitution?

Here is another, similar take on my previous post. This one via The Big Picture. The frightening thing, at least to me, about Rosner’s commentary, is less the stupidity of the legislation than the abrogation of Congressional oversight in future decisions. If we had a Constitution, clearly such a policy would be deemed unconstitutional. Doesn’t even seem to phase these [...]

Taxpayers Sacrificed Again

Image via Wikipedia Image by Getty Images via Daylife It is probably hard for the trusting public to believe what is being done to them by their government. Most of us were raised to think that government was “of the people, by the people and for the people.” It was there to help us, not exploit us. Some still believe [...]