Posted on 05/07/2009 6:27:50 AM PDT by FromLori
The bulls rejoiced that the "Stress Tests" didn't pronounce a bunch of banks dead, never mind that we knew that wouldn't happen anyway (can you imagine the panic if even one bank was pronounced insolvent?)
But government hasn't stopped lying. Not for a second. Indeed, they're lying even more than usual these days, with the following ditty being particularly interesting:
The bill also makes changes to the FDIC’s insurance program requested by Chairwoman Sheila Bair, including expanding the agency’s borrowing authority from the Treasury to as much as $500 billion through 2010. The FDIC’s federal credit line was permanently increased to $100 billion from $30 billion, and the agency’s coverage on individual bank accounts was raised to $250,000 from $100,000.
Bair has asked Congress for an increase in its borrowing authority from the Treasury to protect the agency’s reserves, drained by 29 bank failures this year. The agency has estimated that additional bank failures may cost the deposit insurance fund $65 billion through 2013.
Oh really?
(Excerpt) Read more at market-ticker.denninger.net ...
1. There are 19 million empty homes in America and the builders are still building.
2. Prices were cranked far too high and still have not come down to historical norms in terms of price-to-income ratios. Until they do, a normal market cannot be restored.
3. Everyone in government has been attempting to prevent (2) for the last three years, and have blown hundreds of billions attempting it. They have and will fail.
4. The boomers will not be needing all those extra homes. They're starting to retire. This is a demographic disaster that is just beginning; these folks have no need for a 4 or 5-bedroom house; a 1 or 2-bedroom condo is just fine when the kids are all gone and you're retired.
5. There are only 44 million "Gen Xers" and they're stuffed to the gills with college loans (thanks Boomers for rooking them into that deal instead of standing up for your kids and telling the ivy league to get bent.) They can't afford the 4 and 5-bedroom houses.
Actually, they can afford the 4 and 5-bedroom house. They will be the only market that sellers can sell to, and they will have to sell for the price that the market can bear.
Resolution of this 3 decades of speculative nonsense has been a long long long time coming.
Wow. This is pretty gloomy. Is this guy credible?
I am not sure but the latest run up in the stock market defies logic in my opinion. “everything is bad, just not as bad as we thought is was going to be” so the dow goes up 100 to 200 points. I don’t get it.
VERY CREDIBLE HE WON THE AWARD FOR ACCURACY IN MEDIA AND IS VERY KNOWLEDGEABLE
The only solution, it seems, is MASSIVE immigration. But it will be ok, because they’ll all be legal.
“19 million empty homes..”
AJ & Lori - This figure seems awfully high. That works out to about 1 empty home for every 16 people.( If my math is correct.) I read the article, but couldn’t find a source for this figure. Do either of you know where the author got this number? — JM
So what happens in 2010 when Congress has an overwhelming Republican majority, an overwhelmingly Conservative Republican majority?
How does a Congress undo what a previous Congress did?
I’d suggest the easiest and maybe best way would be to abolish the IRS and repeal the 16th Amendment.
If there’s no money, there’s no program to waste it.
I am not sure but the latest run up in the stock market defies logic in my opinion. “everything is bad, just not as bad as we thought is was going to be” so the dow goes up 100 to 200 points. I don’t get it.
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Makes no sense to me either, the simplest answer would seem to be that this is a humongous pump and dump scheme with the gang of thieves at the top level of government joining with the thieves in the financial industry to rob the country of everthing that is not nailed down. I think I will go with that for the time being since nothing else makes sense. I expect that by October at the latest and I really don’t expect it to make it past August, we will see the next crash downward movement in stocks and only the creator knows where the bottom will be. I base this on nothing more than sixty five years of often bitter experience and my attempt to analyze what seems to be going on, you may arrive at a different conclusion.
i can’t vouch for all of it but common sense should tells me that he is right about housing prices. the price of housing will continue to fall until such time as the average family can afford the average home. we are a still a long way from those levels in many parts of the country.
You nailed it. That crash is coming faster than you think it is.
exactly.
the UAW wanted Chrysler stock in order to SELL IT!
So Obama pulls a pump and dump strategy. He pumps up the market with all the “stimulus money”, the UAW dumps the stock of Chrysler (then GM) on the market OR HAS TAXPAYERS BUY IT!, then the UAW union pension plans are saved and then GM can be shuttered.
It is worse than a ponzi scheme, Obama is the new Enron.
“the dow goes up 100 to 200 points. I don’t get it.”
I sense SHENNANAGINS
It’s bubble mentality. Like in the 2000 tech bubble, when analysts refused to put SELL ratings on anything. For some reason people still listen to analysts and their “expectations”.
“Per Census Bureau, In the Fourth Quarter of 2008, there were 130.8 Million Homes in the US. Of these, 18.9 Million were Vacant. That is a whopping 14.4% of all US Homes were sitting empty. 12.2% in the North East, 13.5% in Mid West, 16.8% in South and 13.3% in the West.”
http://www.housingbubblebust.com/
I agree. I have limited knowledge of this kind of stuff. In the past 15 years, I’ve seen a manufactured dot.com market run, then a manufactured real estate run, just wondering what the next scheme will be. Doesn’t seem like the US actually produces much anymore, so where will the markets go next to produce the next run?
I can relate to this.
You’re right Taffini,
It is ‘very sophisticated Shennanagins’.
http://zerohedge.blogspot.com/2009/05/goldman-sachs-principal-transactions.html
Tyler Durden is the financial investigative blogger to follow.
As a nation we now send 20 billion dollars just to China every month.
TWENTY BILLION DOLLARS.
That’s the equivalent every month - of four Reagan-class carriers.
The equivalent very month, of an entire Fortune 500 company, along with all its jobs, factories and intellectual rights.
We are going broke, because we are SENDING AMERICA TO OUR COMPETITORS.
Factories. Jobs. Knowhow.
All of it.
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