Monday, July 28, 2008

"Save A Little Money Each Month And At The End Of The Year You'll Be Surprised At How Little You Have"

Bad News and Bank Runs by Mike Whitney

"The Bush administration is going to be mailing out more "stimulus" checks in the very near future. There's just no way around it. The Fed is in a pickle and can't lower interest rates for fear that food and energy prices will shoot into the stratosphere. At the same time, the economy is shrinking faster than anyone thought possible with no sign of a rebound. That leaves stimulus checks as the only way to "prime the pump" and keep consumer spending chugging along. Otherwise business activity will slow to a crawl and the economy will tank. There's no other choice.

The daily barrage of bad news is really starting to get on people's nerves; it's obvious everywhere you look. Most of the TV chatterboxes have already cut-out the cheery stock market predictions and no one is praising the "impressive powers of the free market" any more. They know things are bad, real bad. That's why the business news is no longer presented like a happy-go-lucky Bollywood extravaganza with undulating females and exotic music. Now it’s more like B-grade slasher movie where everyone winds up dead at the end of the show.


On Friday, after the market had closed, the FDIC shut down two more banks, First Heritage Bank and First National Bank. Kaboom. Two weeks earlier, regulators seized Indymac Bancorp following a run by depositors. The FDIC now operates like a stealth paramilitary unit, deploying its shock troops on the weekends to do their dirty work out of the public eye and at times when it will least effect the stock market. The reasons for this are obvious; there's only one thing the government hates more than seeing flag-draped coffins on the evening news, and that's seeing long lines of frantic people waiting impatiently to get what's left of their savings out of their now-deceased bank. Lines at the bank signal that the system is broken."


Blogger Mad_Tinfoil_Hatter said...

Isn't it funny that the U.S. has more Nobel prize-winners in economics than any other country, and constantly lectures the rest of the world that they should follow our economic model, when we have created an economic crisis in this country that any college freshman should have been able to predict would happen?

Our economic guiding geniuses have obviously decided slow, agonizing death by inflation is preferable to a quick death from deflation. Then again, maybe that does show some intelligence on their part - this way, they will have a little more time to continue looting our economy and make their escape to their overseas white-collar criminal havens before the collapse occurs and the torch-bearing mobs catch up with them...

28/7/08 3:05 PM  
Blogger nolocontendere said...

I tend to agree with Whitney that this is all an organized crash that won't touch the fat cats but will leave plenty of us destroyed. They could have done things differently but seemed to accelerate the problems at every turn.

28/7/08 10:07 PM  

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