What is going to happen next is that the 6-month stock rally is about to end. It took everything the Fed could muster to accomplish this. As the market heads lower government, Wall Street and banking will have to contend with irate shareholders and retirees as well as owners of stock, life cash value insurance policies and annuities. This time when the market falls it isn’t coming back. The bottom on the Dow will be 2,600 to 4,200 if we are lucky. This time the financial system is in too deep. There can be no reversal. How can there be if the American taxpayer guarantees 90% of all mortgages, so that the legacy banks, as they are now called, can make ever more money.
Just to give you an idea of what government was up too in the second quarter, corporate debt rose marginally, but at half the level of the first quarter. Federal government debt grew at 8.3%, up from 4.9% in the first quarter. Annualized that is an increase of from 22.6% to 28.2%. Fed holdings of federal securities increased from $20 billion to $559 billion. How is that for monetization? This as mortgage debt contracted by $53 billion. Government and Wall Street say the recession is over, but polls show 86% of Americans disagree.
While all this transpires unemployment payouts worldwide are running out. Spain is on its back along with Ireland and Italy tells us that without a continuation of cash for clunkers there will be a disaster in the country. In the US car sales are expected to fall 40% in September. European sales are expected to fall by one million units in 2010. In the US banks’ lending has fallen 14% in the third quarter. It is like the 1930s all over again. This points out the fallacy of the G-20 of saving and increased consumption simultaneously. There is no mystery. Even though government lies about its statistics we can figure them out and the result is not good. The conclusion is the Fed and other European banks will have to partake in massive additional monetization to stave off a deflationary depression and it has already begun.
LINK HERE
Banks With 20% Unpaid Loans at 18-Year High Amid Recovery Doubt
More HERE
Where's that fool stating DOW to 10,000 and recovery is here? Under a rock peeping out with a diaper on.
ReplyDeleteSo... in the Great depression, the run on the banks helped collapse the monetary system. What about now where the banks are already collapsing? If people start withdrawing now, this will likely grind the entire world to a halt, no? Did the GD have failed banks or a failure rate like today to compound their run?
ReplyDeleteThings are going down fast now. Some sheeple may actually wake up to reality, that is if they can stay away from their TV's and actually plan their lives around something other than football or American Idol.
ReplyDeleteMeanwhile, those who follow what the financial babes on Fox/CNBC etc are saying, will be in for a big shock shortly, when their portfolios value go down 80%, as predicted by numerous economic scholars. Most say the Dow will go to around 2500. And gold will go up to $2K, $3K, $5K?
Time is short, better prepare...
agree.... this is a trajic comedy unfolding before our very eyes... i should be buying a copy of each daily newspaper to catalogue the insanity that passes for news these days to show to my grand kids!!
ReplyDeleteI wouldn't be surprised if the Dow would contiue to be manipulated up and up and up as the real economy completely tanks. It's not like the Dow is real in any sense since it is artifically manipulated each day.
ReplyDeleteWhy not have the Dow hit 10,000 plus?
BLA.......another article about this so called financial armageddon that will hit us.
ReplyDeleteLife goes on guys, this is not the first and not the last one of these down cycles. Another couple of years and things will be back to normal, try to use a little more logic
I just went to the FDIC website and found that:
ReplyDelete2009--94 bank closings
2008--26 bank closings
2007-- 3
2006-- 0
2005-- 0
2004-- 4
2003-- 3
2002--11
2001--4
2000-- 2
That's almost twice as many bank closings in three quarters of 2009 as all total from January 1, 2000 to December 31, 2008.
This is scary.
12:19 how is that 10,000 DOW doing? You are the only ignoramus posting these" logical" immature posts.
ReplyDeleteStock markets are so far removed from reality ,they can not be used as economic indicators, however their day of reckoning is soon.What affects the man on the street are foreclosures,credit debt, unemployment and food availiability, and none of these indicators are good.
ReplyDelete12:19'Life goes on guys, this is not the first and not the last one of these down cycles. Another couple of years and things will be back to normal, try to use a little more logic" .. Please help me out here .. what do you consider normal ?
ReplyDelete30 - 40% price increase of my house to where it was ??
Unemployment back to 4 - 5 %...?
Lost manufacturing will be back to normal ??
Again please .. what is normal ??
I look forward to your reply !!!
Jane..
ReplyDeletegood post ..actually you were off a few failures as of today ...
bank failures #96,#97,#98 posted today ..
Maybe this will be normal ....
This comment has been removed by a blog administrator.
ReplyDeleteWhy does the admin always remove posts that don't agree with the stories posted here? Free speech my foot, and although I don't agree he/she provides somewhat of what the other side perceives to be going on. Otherwise, this is no better than controlled media?
ReplyDelete10;46 stop the insults. Many find the posts childish so they are removed.
ReplyDeleteIf it goes back to the 1990s i am fine with that, in fact it would be appreciated, where I am traffic, back 2 back big boxes, 100s of restaurants, bars, niteclubs, office buildings, beyond...its not even livable, its overpopulated, overbuilt, its ridiculous.
ReplyDeleteBTW, when is this spreading of wealth kickin in ? , I still see tons of RICH dems, what happen to this lead by example we were promised?
ReplyDeleteWhen is the fox news Propaganda going to end, when will that kick in? Answer: Never. Hey I have an Idea, lets give some more tax cuts to billionaires like reagan and bush did, Wow look at what a success that is, you can tell that now it is really working, BBBBWWAAAHAHAHHAHA!!!!
ReplyDeleteyoohoo!
ReplyDeleteeverybody print money
and be merry
7:29, what does a news station have to do with reform? they are not the administration, and wasnt the redistribution of wealth what everyone wanted, that was the dems lead by example motto. Well clearly there not hookin u up with anything, if you are pointing fingers.
ReplyDeleteI went to buy some coke
ReplyDeletebut all they had was crack
thanks reagan thanks cia
they helped me to stay up all day