Senator Coburn’s appearance on The Kudlow Report prompted a response!
As I watched Senator Coburn on the “Almost Fox” Kudlow Report I realized that though he was being asked directed questions there were holes in the Senator’s responses regarding the causes, the stagnation, and solutions of our current financial situation.
There were many causes, and some signs of improvement, but not for everyone. Solutions are varied and some have better ideas than others.
The following is the letter I sent to the Senator today, 7/24/2010:
I watched and listened to you on The Kudlow Report last Friday, talking about the economy and financial regulation, with extreme interest.
I’ve been impressed in recent months with some of your positions and a few of your statements and comments. CNBC loves using your clip stating that Congress is incompetent. And, like you, I wonder who the 18% are that think otherwise. You see, it has dropped since your original declaration.
There are a lot of reasons for Congress’s declining approval rating and recent legislations are a big part of that decline. In your segment on Kudlow you were right about a few things, but clearly not all. Read the rest of this entry »
103 Banks have been taken over by the FDIC already this year!
Seven banks were consumed by the FDIC on Friday surpassing 100 lost banks 3 months earlier than last year. This week the foreclosures occurred in seven different states, but Florida lost its fourth in two weeks and South Carolina lost another which was its 3rd in two weeks. Georgia lost its 40th bank since the beginning of 2008 and Florida is now tied with Illinois in second with 34 banks closed by the FDIC in that time.
The DIF will take a hit of $431 million this week with a loss-share provision between the FDIC and the acquiring banks totaling $1.5 billion. Crescent Bank and Trust Company, Jasper, Georgia was the most costly of the banks to the Fund at $242.4 million and the most costly loss-share at $617 million.
The significant change may be that the FDIC appears to be reducing the direct cost to the Deposit Insurance Fund and increasing the loss-share portion with the banks which may lead to larger losses pushed later in the cycle.
We’re only 37 away from the 140 that were closed last year and last year’s total could be surpassed in the next 8 weeks. With the commercial real estate market struggling there could still be an acceleration to toward the end of the year causing more pain for the banking system.
Now’s the time to pay attention!
The FDIC takes over six banks on Friday: 96th in 2010!
Failures thru Mid-July
Not only did Florida increase its total banks lost to 33 since 2008, but South Carolina lost its 2nd and 3rd banks this year.
South Carolina hadn’t lost a bank since the FDIC started listing failures in 2000, until it lost Beach First National Bank in Myrtle Beach on April 9th. The bank was seized by the Office of the Comptroller of the Currency and assigned to the FDIC as receiver. They immediately entered into a purchase and assignment agreement with the Bank of North Carolina in Thomasville.
The loss-share agreement with BNC was for $500,000,000 and the DIF estimated a loss of $130 million to the Fund. All three South Carolina Banks cost the Fund $320 million. The loss-share with the receiving banks is an incredible $1.3 billion.
The six banks that failed on Friday will cost the Deposit Insurance Fund $335 million. Combined with the 4 banks that closed last week, July has already drained $677 million from the Fund.
The question is, as always, how many banks will fail in the second half of the year?
And…how much is it going to cost the taxpayers?
Is the 33rd consecutive day of decline problematic?
The Baltic Dry Index fell for the 33rd consecutive day settling at 1790, a decline of 561 since the first of July.
CSX reported good numbers for the quarter yesterday. But the transporter of coal may find distress if the Index indicates a falling demand for dry bulk shipments to China.
It also appears that iron ore demand has declined in China. If, in fact, it is falling instead of just the addition of more ships them the BDI is an indicator of the slowing global economy. If the number of ships has increased then it is, obviously, a contra indicator of real shipping demand.
Either way, it is important to keep a watchful eye and be at least slightly fearful if it continues its precipitous fall!
Calling the self-aggrandizing roundballer a prince would be ambiguous!
Dwyane Wade, the face of the Miami Heat
The one hour yawner on ESPN was a waste of 59 1/2 good minutes. It was like watching paint dry, or the refrigerator defrost.
Most of us knew James would be gutless and choose to go to Miami but, many that I talked to, hoped that the hour special would be a revelation; that he was going to return to the Cavs and take the challenge, determined to win a crown with Cleveland.
We even could accept the announcement that he was going to make another of the chosen teams competitive and try to win the championship with another group of players.
But no, he took the easy way out! Unable to win a title, he chose to go where he thinks it will be a sure thing.
But sharing the spotlight amongst three known stars might prove to be more difficult than Queen LeBron thinks. James has already intimated in his interview on ESPN that Dwyane Wade would be the unselfish one setting the stage that he and newly signed Chris Bosh would be the stars on D’s team.
The unanswered question is, will Wade regret convincing his two super-star friends to join him? The Shaq/Kobi union comes to mind. It wasn’t a very good experience. The Lakers needed two balls, will the Heat need three?
Read the rest of this entry »
Is a great month for the FDIC a great sign for the economy?
Only 8 banks were taken over by the FDIC in June at a cost of $835 million to the Deposit Insurance Fund (DIF).
Of the big four, Georgia, Illinois, and Florida lost one bank each increasing their losses since 2008 to 39, 34, and 30 respectively. California did not lose a bank in June and remains 4th at 27.
Peninsula Bank in Englewood, Florida cost the DIF $195 million, but Tier One Bank in Lincoln, Nebraska was the largest drain on the Fund at nearly $300 million.
June was a great month for the FDIC, but we lost four banks on Friday in Maryland, New York, and Oklahoma. The four banks brought the total to 90 for the year. The cost to the DIF for the first losses in July amount to $342 million.
The number of lost banks accelerated in the last half of 2009 as it did in 2008. At the end of June last year we had lost only 48 banks.
Hopefully, that trend won’t continue in 2010.
The cause of our financial crisis was deregulation—plain and simple!
Deregulation over the past 30 years has devastated the middle-class, thrown more families into poverty, while allowing the wealthiest Americans to become even wealthier.
As described in, “Double Dip: A Republican Conundrum!” we are about to feel the pain of recession again in the form of a double dip in the stock markets. Despite their complicity the Republicans continually decry re-regulation at a time when the entire global financial system is in distress as a result of their policies.
Every one of the financial crises was the result of deregulation and deregulation is a Republican ideology. These crises include:
- The Savings and Loan Crisis. Deregulation of the S&L industry was pushed by Reagan and Republicans.
- The dot.com bubble, created and allowed to overheat under a Republican Congress and a complicit Democratic President.
- The bankruptcy of Enron, WorldCom and a number of other large corporations as a result of the Commodity Futures Modernization Act, a Republican bill pushed by Phil Gramm.
- The largest financial failure since The Great Depression caused by passage of the Republican backed Gramm/Leach/Bliley Bill, signed into law in 1999 by a complicit President.
- The housing bubble blamed on Democrats but embraced by a Republican majority Congress, a complacent Fed Chairman, and a complicit President.
- The numerous bankruptcy laws enacted by Congress, each allowing the financial services industry more devices to steal from the people and help their corporate friends.
- TARP (Toxic Asset Relief Program), an unpopular bank funding program pushed by an incompetent Republican President and a duplicitous Secretary of the Treasury.
- The AIG Bailout from TARP, a money laundering scheme to transfer $64 billion dollars to Goldman Sachs and 8 other troubled banks.
- The British Petroleum spill in the Gulf, a failure on so many levels and one of the most devastating environmental events in our history.
- The failure of LCTM as a result of an unregulated derivatives market still supported by Republicans and some uninformed Democrats.
- The Bernie Madoff ponzi scheme which festered under a weakened Republican Securities Exchange Commission.
In nearly every example Republicans had help from some Democrats. But these are all Republican backed initiatives—failed policies that have caused varying levels of pain and suffering. Most have added to the erosion of the middle-class.
Read the rest of this entry »
Is dry shipping headed for Davy Jones Locker?
Avast matey, ‘fore you jinx dry shipping, cursing them to a watery grave.
I assure you, it shall not be a malediction of my making that causes the Baltic Dry Index to continue its slide below 2000, or further.
The Baltic’s 29th straight day of decline, to its lowest level in over a year, may be telling us something we do not want to know. Just one year ago the Index sat at 3375 and has fallen nearly 50% from the 2010 peak of 4209 just 29 days ago.
After December 24th the Baltic went on Mr. Toad’s Wild Ride. It had just completed a 14 day slide which left it poised to fall below 3000. It continued the wild ups and downs hitting a low of 2566 on February 15 and reaching its high of the year on the 26th of May. The wildness has ended with the recent slide and the BDI settling at its new low of the year—down 89 today, to 2127.
It may be an important index to watch the next few weeks to get a glimpse into the global economic future.
The financial crisis is a Republican creation they won’t talk about!
Supply-side economics, Reaganomics, lazzez-faire, all theories of economics, developed and promoted by Milton Freidman—advanced by many—and responsible for the financial quagmire we are currently drowning in.
These theories are the mantra of conservative Republicans and the foundation of their party’s free-market-capitalism platform. It is also the cause of nearly all the financial woes and hardships hard-working Americans are experiencing. They have pushed supply-side for 30 years and it has led to the most damaging recession since The Great Depression.
The supply-side experiment is a failure and has left us in such a dire position that with a little shove we could fall into a global depression. The potential is so great that unprecedented steps had to be undertaken to prevent plummeting that far.
But we’re not through. As fears mount of a double-dip we could slide back to, or below, the March 9, 2009 lows when, the Dow fell below 6,600, its lowest level since April 15, 1997 and the S&P slid below 700, its lowest close since September 12, 1996.
In fact the Dow is poised to fall below the 6,000 level or further as it nears the second low. Read “The Dow at 6,000.”
Things were, and are still extremely difficult.
Who is responsible for the difficult problems we face?
Read the rest of this entry »