Punchinello’s Chronicles

August 22, 2009

The Recession is Dead. Long Live the Recession!

Filed under: Surely a Jest? — Punchinello @ 1:37 am
Tags: , ,

Following the close of Wall Street, up 155 points, the Chairman of the Federal Reserve announced on Friday that the world “slump” is ending. We read headlines that the recession of 2008-9 is about over. Everything is looking great, and the major banks are finally turning a profit. Except there doesn’t seem to be any reality behind these reports.

Four large banks failed after the close of business, bringing the total number of failed banks in 2009 to around 80 banks. Nobody seems to care that those banks include more than 3,500 branch locations! Reports tell us that the largest international banks make up about 80% of the banking pie, with thousands of small banks making up only 20% of that pie.

And yet, small banks are still holding mortgage loans, car loans, and other loans. Those small banks are seeing an increasing number of defaults on mortgages, and they don’t have Washington bailing them out. The current number of loans that a) are behind by at least one payments, or b) are already in foreclosure is close to 13%. But banks are being allowed to declare those loans as “good” loans, to diminish fears of insolvency on a grand scale.

The FDIC, now available to insure deposits of up to $250,000 (a quarter of a million dollars) per account, has announced that with the increasing number of failures, the Federal Deposit Insurance Corporation is running out of money. But that’s okay, they’re backed by the US Treasury. The same people who are printing money like toilet paper!

Meanwhile, the Federal Reserve is quietly signing agreements to become “partners” with more than a few of the nation’s bank holding companies. These are the companies that own the banks, and they apparently are handing over basic control to the Federal Reserve. Do we read much about it in the everyday news? Of course not.

All we hear about is health care this, health care that, and some woman got herself murdered by some nutjob whose only claim to fame is his appearance on a reality show. Consumer debt is rising, spending is dropping. Unemployment is going up, but we hear that it’s going down. Well, not in all states, just the ones that appear in the headlines.

So how is the recession over? How is the economy poised to “get back on track?” It isn’t, that’s what. We’re being either lied to outright, or the bad news is being withheld. Or glossed over. This is not a good thing, y’know?

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