One Thousand Banks Closed?

Could 300 to 400 banks be closed by the government this year? It’s likely. Currently 185 banks have been seized by the government. Another 300 would almost reach the halfway point to a thousand and it is highly unlikely that the current economic crisis will have significantly improved in a single year.

James Dunne, senior managing principal of Sandler O’Neill, said 300 to 400 banks could be seized this year, especially as institutions start to deal with deteriorating commercial real estate loans.

He believes as I do that the collapsing real estate market is going to produce serious losses in bank income. Those of you who take my classes are well aware of my predictions of a serious commercial real estate crisis and a further increase in the seriousness of our current economic plight.

The FDIC reports there are 702 banks on its problem bank list. Of course historically only a little more than a fourth of the banks on the list have failed. I believe we are in a far more serious economic crisis than we have seen before and I strongly agree with James Dunne’s numbers except that I think will be worse. I’ll predict 450 closures by the end of this year.

This is going to be a long, hard economic crisis and we have NOT encountered the worst.

James Pilant

Shareholders Gain Influence

Loren Steffy writing in the Houston Chronicle has hopes that this year might be the year of the shareholder.

And it’s about time. The corporation is supposed to be controlled by those who put money into the operation, the investors. Yet, as far as I can tell, the shareholders are marginalized and ignored almost all the time. Only when a single shareholder controls a large block of stock do we see any element of corporate democracy.

The federal government should act to make corporations accountable to the people that own them. It’s ridiculous to live in a nation that talks about democracy and preaches it to other countries continue the rank hypocrisy of ownership without power.

Capitalism Gone Weird

This is competition in an inappropriate place!

80% Of Americans Think Washington Is Broken

What happened? Somebody slap them? How did it take so long? For two decades our Congressman unleashed a tidal wave of speculation that has cost millions of Americans their homes, jobs and the self respect that goes with those things.

Apparently reality has to slap American on both cheeks for recognition to hit. Just Great!

Matt Taibbi Is Right Again

You can’t cheat an honest man. Right, you can’t shoot a defenseless man or rape a woman who defends herself. All the financial rip-offs that netted billions of dollars over the last decade couldn’t have worked if Americans weren’t greedy “mothers” without a twinge of conscience. Who invents this crap?

Matt is right to be outraged but how come the rest of us aren’t? What does the financial industry have to do, crucify us individually, before we get the idea that we’ve been had?

Where do the networks find people like Rick Santelli? What septic tank do you have to dive into? In 2008, retirement funds lost 2 trillion dollars. Apparently they are not honest men. Yet to the Rick Santelli’s of the world, it’s all the fault of the people who bought mortgages. In Santelli’s world, there is the elite that makes value and the besotted masses that slow them down. In the world of Santelli, unless you are a banker or a financial speculator, you’re like a vermin that needs extermination for slowing down the really talented people.

Yeah, the industry is innocent of wrong doing. – or is it?

You want a look at some of the individuals screwed out of their money? Let’s have a browse. Sometimes they get mad.

Don’t let it bother you. America is ONLY in trouble because some people can’t pay their mortgages. Some people got in over their heads.

If you believe that, you’ll believe anything. You have to want to believe that kind of perverted narrative because the fact that the great financial institutions of this country acting like predators with a subservient Congress protecting their every move is too hard to take.

James Pilant