Five more U.S. banks failed this week, while a separate report warned that a large, Texas-based bank with “negative capital” would be next. With 69 failed banks already this year, bank failures are already on course to exceed the number of failures in 2008 by 400%.
However, if they continue accelerating, that increase could easily rise to 500% or 600%.
Meanwhile, despite raising the size of its bribes to take over these failed companies, the FDIC is seeing less bidders step up to bid on these companies. It's “insurance fund” will be nearly completely exhausted when the pending failure of Texas-based Guaranty Bank (GBNK) takes place – forcing it to tap into a $200 billion “line of credit” from the insolvent U.S. Treasury.
Does this sound like an economy which is “recovering”?
If the U.S. housing sector is actually “stabilizing”, as the propagandists assure us, why are bank failures accelerating? Why aren't other banks fighting over the chance of taking over these “distressed assets”, in anticipation of the “economic turn-around” which they continue to tell us is taking place?
Could it be that the banksters don't believe their own hype? (Surely bankers wouldn't lie to us?) Or, is it simply that once you sift through the fraudulent accounting of this crime syndicate that they don't have an extra dime for such purchases (but do have tens of billions of dollars to award to themselves as “bonuses”)?
Bloomberg is reporting that the contraction of U.S. consumer credit is expected to accelerate by over 30% compared to last month. In a separate report, it warned that the amount of bankruptcy funding available to help companies survive and emerge from a bankruptcy filing is collapsing – just as defaults are soaring to new records.
CIT Group (CIT), the largest source of loans for U.S. businesses is still fighting to survive on a week-by-week basis, with bankruptcy possible at any moment. None of the Wall Street banks who are proclaiming themselves fat and healthy are interested in putting a dime into this company, despite the fact that the failure of CIT would have an extremely negative impact on their own, huge commercial real estate holdings. Automatic Data Processing (ADP), the largest payroll-processor in the U.S. warned last week that it will fail to meet the low-ball projections of U.S. analysts.
In short, the same Wall Street banksters who are leading the chorus of “happy days are here again!” are the same individuals throttling the U.S. economy through reduced lending and credit – the exact opposite of what they predicted they would do, once they got their $10 TRILION in hand-outs, loans and guarantees.
With well over 90% of government bail-out dollars flowing into the pockets of a handful of Wall Street fraud-factories, there is absolutely no evidence that the overall U.S. economy has benefited at all from this massive subsidization of the “Kings of Capitalism”. Yes, the banksters can use their mouthpieces, Bernanke and Geithner, to play the role of “Chicken Little” - and warn of the dire consequences if this crime syndicate was allowed to fail.
However, as I have written on many occasions, with $10 trillion dollars, the U.S. government could have created a totally new banking sector from scratch – with several trillions left over, and no added risk or liabilities being assumed. Wall Street could have simply been left to drown in their own feces, rather than have their servants in the U.S. government shovel them out.
It is often said that “actions speak louder than words”. This cliché has never been truer than in comparing the propaganda of U.S. banksters with their actual deeds. The U.S. economy continues to plummet downward, and all Wall Street is willing to do is to toss it an anchor – while they award themselves billions for their success in plundering the U.S. Treasury.
There is another “syndicate” in the United States which also measures its success by how well it lies cheats and steals. You can see them in action on re-runs of “The Sopranos”.
Disclosure: I hold no position in Guaranty Bank, CIT, or Automatic Data Processing