midtowng's blog

How far does corruption with banking regulators reach?

There are regulatory agencies with good reputations, and then there are agencies with bad reputations. There are bad ideas, and then there are criminally bad ideas. That's why it is so disturbing to see a regulatory agency with a good reputation like the FDIC propose a criminally bad idea.

(AP) — Regulators may borrow billions from big banks to shore up the dwindling fund that insures regular deposit accounts.

Credit Crunch is Intensifying

In the debt-based currency system of today credit is the life-blood. Without credit the economy has no money and nothing can grow.
That's why all this talk about economic recovery is puzzling. There is no talk about more jobs, higher incomes, or more paid working hours. So any recovery must come from credit. Yet it is credit that is lacking.

Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14pc in the three months to August (from $7,147bn to $6,886bn).

"There has been nothing like this in the USA since the 1930s," he said. "The rapid destruction of money balances is madness."

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Deregulation and the Triumph of Wall Street

With most of the media focused on Obama's speech about health care on Wednesday, this item got largely overlooked.

Sweeping regulatory reform of the financial sector-thought to be a 2009 legislative given just four months ago-may now come down to a piece-meal approach, with the White House and its allies happy to see a couple prized components signed into law this year.

Treasury: Millions more foreclosures coming

The Assistant Secretary for Financial Institutions Michael S. Barr gave written testimony before the House Financial Services Committee today that put things into perspective.

[W]e recognize that any modification program seeking to avoid preventable foreclosures has limits, HAMP included. Even before the current crisis, when home prices were climbing, there were still many hundreds of thousands of foreclosures. Therefore, even if HAMP is a total success, we should still expect millions of foreclosures, as President Obama noted when he launched the program in February.

The thing to keep in mind is that there is no chance that HAMP will be a total success.

"These jobs are not coming back"

The unemployment rate climbed to 9.7% last month, a 26-year high...and the media told us that this is a good thing.

“[W]hether or not today’s and other recent reports overstate the case, the improving trend of the labor market after the autumn/winter carnage cannot be denied.

Ah, yes. The trend.
First of all, let's be clear what trend we are talking about. We've lost a lot of jobs, and we are still losing them - that is the trend.
Trying to spin that into a good thing is like putting lipstick on a pig. For the job situation to be "improving" requires that we stop losing jobs.

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Trying to reinflate the housing bubble with taxpayer dollars

The report out today says that the Federal Housing Administration is having the busiest year in its history.

Almost a year after the federal government launched its rescue of the housing market, nearly one in four new mortgages is insured by the Federal Housing Administration.
FHA loans also have become more popular because of the demise of many subprime lenders, which sometimes allowed buyers to purchase a property with nothing down and no documentation of income.

Remember what went wrong with the subprime housing market? People getting easy credit with "no skin" in the game buying houses they couldn't afford. Oh sure, there was massive fraud too, but that wasn't the cause of the bubble.
And yet, the federal government seems determined to do the exact same thing that got us into trouble in the first place. Only this time it is your taxpayer dollars that are financing it.

Historic changes in the wind for Japan/America economic relations

Since shortly after WWII Japan has been a single party nation, totally dominated by Liberal Democratic Party (LDP). If the polls are right, this tradition will change this week in a very big way.

Just days before the election, polls continue to support the widely held belief that the Liberal Democratic Party (LDP) of Japanese Prime Minister Taro Aso will experience a crushing defeat in Sunday's vote for the lower house of the country's parliament.
One major late-week poll indicated at least twice as many voters would cast ballots for the Democratic Party of Japan, led by the country's likely next prime minister, Yukio Hatoyama.

The 2/3rd percentage is extremely important. If the DPJ captures 320 seats they can enact any legislation even if the Upper House, which is still divided, rejects it. Some projections say they will reach that goal.

What can an economic recovery build upon?

There's been a lot of talk recently about the economy. Has it bottomed? Are we recovering? Will we see a "V" shaped bounce? Or a "U"? Or a "W"?
Since most of the economic numbers are still negative, it seems a little premature to talk about a recovery. Nevertheless, since the cheerleaders of the economy have brought it up, let's examine exactly what is going to lead this economy out of our deep recession.

In order to do that we must look at a topic that the Green Shoots crowd doesn't mention much - the fundamentals of the economy.

The Return Of The Robber Barons

"We must break the Money Trust or the Money Trust will break us."
- Louis D. Brandeis, 1913

When the economy appeared to be melting down last September, Wall Street bank representatives began showing up in Congress like mobsters walking into a mom-and-pop business looking for protection money.
"Nice economy ya got here.(crash!) It would be a shame if something were to happen to it."

Mobsters and Robber Barons have a lot in common.
Neither has any respect for the law or morals, only for power. Neither can ever be satisfied with any amount of wealth. They will always need to steal more and more and more until they've completely bankrupted their victims.

We are now at the mercy of modern Robber Barons, and if history is any judge, it is either them or us.