This is socialism for Wall Street and the rich!

The title is a quote from Roubini, economist. I love it, yup, that's right, workers get corporate machinations from hell (often called free trade) while the super rich and institutions get socialism!

There is an interview Yes, that's $2 Trillion in Losses, from Barrons with Roubini (this is his blog), talking about the housing bubble/crisis.

They note so far his predictions about the financial crisis (when most were singing a happy tune) have been dead on accurate, so they interview Roubini for further predictions.

One observation:

The U.S. consumer is shopped out and saving less. Debt to disposable income has risen to 140% from 100% in 2000. Hit by falling home prices, the consumer no longer can use his house as an ATM machine. The stock market is falling and (issuance of) home-equity loans (has) collapsed. We have a credit crunch in mortgages, and gas is around $4 a gallon. Everyone says, 'yeah, that's true, but as long as there is job generation there is going to be income generation and people are going to spend.' But for seven months in a row, employment in the private sector has fallen

One thing to take note and should probably be addressed in the FDIC posts on EP, is this statement:

Many public institutions are themselves going bankrupt. The FDIC (Federal Deposit Insurance Corporation) has only $53 billion of funds, and has already committed almost 15% of it to bail out depositors of IndyMac. The FDIC's deposit-insurance premiums weren't high enough, and now it is asking Congress to raise them. Plus, the agency claims only nine institutions are on its watch list. IndyMac wasn't on the watch list until June, the month before it collapsed. Studies done by experts in banking suggest that at least 8% of U.S. banks are in big trouble. Eight percent of the roughly 8,500 that the FDIC essentially is insuring equals about 700 banks. Another 8% to 16% also are shaky, so some 700 potentially are going bust and another 700 eventually could join them

He sure isn't predicting a rosy picture with the FDIC here and he's a very good economist. Not a typical Chicken Little.

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I'll have more to say about Indymac in my last installment regarding the FDIC. I have no problem disagreeing with Roubini's statement above, and I will explain why then -- probably this weekend.

me either

Clear legitimate and at least gets to the crux of the issue, it's in the percentages and the premiums.