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Thread: Four banks fail, bringing 2009 tally to 44

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    Four banks fail, bringing 2009 tally to 44

    I know that as soon as some people read this, they are going to blame Obama for the bank failures, even though this began under the Bush administration. But I don't blame Bush either. But I am going to get really hyperpartisan here.

    It is Obama's fault.

    But this began under Bush
    .

    OK, then it's Bush's fault.

    Bush did not dismantle the Glass-Steagall Act. That was done during the Clinton administration
    .

    Damn, it's all Clinton's fault.

    Not really, the bill that dismantled Glass-Steagall protections was sponsored by Phil Gramm
    .

    Then it has to be all Phil Gramm's fault.

    Actually, Democrats voted for it
    .

    Those damn Democrats. Look what they did to our economy.

    The Dems only voted for something that was put forward by a Republican Congress.

    I hate those damn Republicans. they screwed us good.

    Question to you - Who voted for those Democrats and Republicans
    ?

    Ummm, should I kill myself now or later?

    Don't kill yourself. Just be a wiser voter next time.

    Hey, it's all your fault, whoever you are.

    This is America, and you have let me down.

    Well, sorry about that. The Devil made me do it. It's his fault
    .

    Thus continues the story of how the Reaganesque idea of taking a little responsibility for our actions has been squandered by us all. One person abandoning a little responsibility as an American does a little bit of damage. However, a LOT of people abandoning their responsibility as Americans results in what we are seeing all around us at the present time. It all added up. And the damage will never be fixed by hyperpartisan finger pointing.

    It's nice to be an American, but being an American comes with a price. That price is called responsibility.

    Discussion?

    Article is here.
    Last edited by danarhea; 06-29-09 at 06:03 PM.
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    Re: Four banks fail, bringing 2009 tally to 44

    At the peak of the S&L banking crisis when more than 1,000 banks failed in 1988 and 1989, at a rate of more than 2 every business day for two consecutive years, the economy survived without going into a recession.

    Today we have to figure in the Amateur in Chief Obama and his personal prescription for disaster that will come with the passage of his Cap on Trade, Growth, and Jobs, Bill as it ends all hope of economic recovery.
    Look for many more banks to fail if Obama gets his way making the numbers from 1988 & 1989 look good in comparison.

    He is keeping one promise.

    January 2008... San Francisco Chronicle interview: Obama said: "Energy Prices Will Necessarily Skyrocket Under My Cap and Trade Plan"

    And he lied about everything else.

    Candidate Obama Sept. 12, 2008: "I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

    Recession is when your neighbor loses their job.
    Depression is when you lose your Job.
    Recovery is when Obama loses his job.

    "You can always count on Americans to do the right thing—after they’ve tried everything else".
    Sir Winston Churchill

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    Re: Four banks fail, bringing 2009 tally to 44

    Quote Originally Posted by danarhea View Post
    Thus continues the story of how the Reaganesque idea of taking a little responsibility for our actions has been squandered by us all. One person abandoning a little responsibility as an American does a little bit of damage. However, a LOT of people abandoning their responsibility as Americans results in what we are seeing all around us at the present time. It all added up. And the damage will never be fixed by hyperpartisan finger pointing.

    It's nice to be an American, but being an American comes with a price. That price is called responsibility.
    So finger-point at the American people, then warn against finger pointing?

    How does a bank failure have anything to do with responsibility?

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    Re: Four banks fail, bringing 2009 tally to 44

    Quote Originally Posted by Councilman View Post
    At the peak of the S&L banking crisis when more than 1,000 banks failed in 1988 and 1989, at a rate of more than 2 every business day for two consecutive years, the economy survived without going into a recession.
    The number of failed banks does not tell the whole story. Since the S&L crisis, the structure of the finance industry changed dramatically. Consolidation led to a smaller number of banks and far greater concentration of assets.

    During the S&L Crisis, the total assets of failed financial institutions came to $519 billion. During the September 2007-present timeframe following the bursting of the U.S. housing bubble, 70 banks have failed with total assets of $455.4 billion. More banks will fail this year and likely next year, as bank failures typically lag the turn in the economy.

    Furthermore, if one includes the assets of financial institutions that were liquidated (Bear Stearns and Lehman Brothers) and those put of taxpayer life support (AIG, Fannie Mae, Freddie Mac, Citibank, Bank of America, etc.)--institutions that would otherwise would likely have failed-- the figures vastly exceed those of the S&L crisis.

    In fact, the government's failure to resolve the mega institutions that were put on taxpayer life support--basically close down, transfer assets to viable financial institutions (and in the case of the mega financial institutions, spread their good assets among a large number of viable financial institutions)--is quite different from the aggressive approach that was taken by the Resolution Trust Corporation during the S&L crisis. Such failure may well undermine the prospects of robust post-recession growth e.g., lead to a more anemic recovery than might otherwise be the case.

    A just released report from the Bank for International Settlements states:

    Past banking crises have taught us that early recognition of losses combined with quick, comprehensive intervention and restructuring is the key to a speedy recovery... Before normal lending can resume, bad assets must be disposed of and banks recapitalized, all in a transparent fashion. In contrast, during this crisis, resolution has proceeded slowly with the result that market participants have been unsure about the size and distribution of losses as well as about the timing of loss recognition... Ultimately, the reluctance of officials to quickly clean up the banks, many of which are now owned in large part by governments, may well delay recovery.

    Finally, the International Monetary Fund recently estimated that U.S. asset writedowns by financial institutions will amount to $2.7 trillion.
    Last edited by donsutherland1; 06-29-09 at 11:43 PM.

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    Re: Four banks fail, bringing 2009 tally to 44

    Quote Originally Posted by Dav View Post
    So finger-point at the American people, then warn against finger pointing?

    How does a bank failure have anything to do with responsibility?
    Unless I'm mistaken--and Danarhea can correct me if I'm wrong--Danarhea's point was that the current financial crisis is not a Democratic Party or Republican Party issue. Partisan posturing to blame the crisis on either party misses the cause of the crisis. A major cause was the explosion of debt.

    Households played the leading role in leveraging up. From 1980-2005, household debt rose from 50.0% of GDP to 94.5% of GDP. During that time, household debt rose from $1.396 trillion to $11.738 trillion. Mortgage debt was the primary driver of the explosive growth in household debt and it was that debt that fueled the housing bubble that precipitated the financial crisis.

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    Re: Four banks fail, bringing 2009 tally to 44

    Quote Originally Posted by donsutherland1 View Post
    Unless I'm mistaken--and Danarhea can correct me if I'm wrong--Danarhea's point was that the current financial crisis is not a Democratic Party or Republican Party issue. Partisan posturing to blame the crisis on either party misses the cause of the crisis. A major cause was the explosion of debt.

    Households played the leading role in leveraging up. From 1980-2005, household debt rose from 50.0% of GDP to 94.5% of GDP. During that time, household debt rose from $1.396 trillion to $11.738 trillion. Mortgage debt was the primary driver of the explosive growth in household debt and it was that debt that fueled the housing bubble that precipitated the financial crisis.
    Let me correct you because.......

    Oops, never mind. You are right. You must have read my post.
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    Re: Four banks fail, bringing 2009 tally to 44

    Danarhea, thank you for one of the clearest assertions on this subject. It is one I have been making for sometime in my research papers in comparisons of Asia and the United States and the West. Americans have forgot how to save for the future and how to live within their means. Instant gratification is going to have to become a thing of the past in order to rebuild this economy. China is building their own domestic consumerism and is having a hard time convincing their own people to buy the products they are making.

    Regardless, great post.

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    Re: Four banks fail, bringing 2009 tally to 44

    Bottom line is we all dropped the ball,for failing to vote for a better person or party and then calling them and harassing them to have them vote for what is the best for our country.And we all failed by letting them stay in office after the next election.

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    Re: Four banks fail, bringing 2009 tally to 44

    Glass-Steegal? I don't think so. I blame the Fed for lowering interest rates when they should have been sky-high due to our lack of savings.

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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    Re: Four banks fail, bringing 2009 tally to 44

    So does anyone think that when the FDIC comes in and bails out the depositors this could actually lead to inflation as more banks fail in the future?

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