The day after the presidential election of 2008 the democrats in congress pushed for a bill that would provide $61 billion in economic stimulus. President Bush objects to the bill as it is currently written. The continuing recession fears and worries about corporate profits have once again swept stock markets around the world. As profits shrink most businesses tend to retract in order to remain afloat usually this means that the first thing to go is jobs.
The U.S. Department of Labor reported that the filings for state jobless benefits reached 481,000 for the week that ended November 1. The number of people continuing to receive unemployment insurance jumped by 122,000 to 3.84 million, the highest since 1983, when the nation was coming out of a deep recession. The nation' s unemployment rate for November bolted to a 14-year high of 6.5 percent, far worse than economists expected and stark proof the economy is deteriorating at an alarmingly rapid pace.
When economic conditions get bad, banks pull back and then the pull back tends to make economic conditions even worse, resulting in banks that pull back even more. The Federal Deposit Insurance Corporation (FDIC), the federal agency that backs bank deposits, last week reported the biggest jump in "problem institutions" it has seen since the savings and loan crisis of the late 1980s. The FDIC directly examines and supervises about 5,160 banks and savings banks, more than half of the institutions in the banking system. There are 1,479 FDIC member banks that are at risk of failure with total assets of $2.4 trillion. The federal government has pledged as much as $3 trillion for the crisis.
Humpty Dumpty sat on a wall.
Humpty Dumpty had a great fall.
All the king's horses and all the king's men
Couldn't put Humpty together again.
When these times are looked back on, maybe they will be called the period of a Humpty Dumpty economy.
5 comments:
Good timing! I just finished preparing the whole story on this for tomorrow. I have been saying it for too long now but this is just beginning and will get a lot worse just watch. The timing and the cause is no accident and no surprise. Just keep watching!
What's the source you used for the comment1,479 FDIC member banks that are at risk of failure with total assets of $2.4 trillion
I tried to verify the numbers, could not find anything on the FDIC web site. Not saying I don't believe ya, just like to point people to the source when I blog about this.
Grumpy!
You made me curious because I have he3ard it myself so I checked. There are numerous sources but there are a lot At this one
www.fdic.gov/about/learn/symbol/index.html
http://www.weissgroupinc.com/research/index.html
Martin D. Weiss, Ph.D.
I hope this helps.
The question then becomes: of what is Humpty Dumpty made up? I would argue that what has crashed is the economic model that is reliant on Wall Street, low wages, absence of regulation, absence of rights. Even though it will be painful, this economy will not be missed.
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