One of the unfortunate corollaries to my enforced absence from regular blogging has been little time to carefully follow the threads of discussion on various topics among the blogs. Curiously, I find that when I do have time to devote to a bit of reading, much of the discussion has changed very little.

It’s eerie how much official government policy is beginning to mirror those that were tried with no success during the commercial real estate debacle of the 1980s and early 1990s.

There seems to be a lot of agreement that the positive GDP report for Q3 was in retrospect not as positive as the headline number might lead one to assume. Coupled with the disappointing personal income data on Friday as well as the sales numbers and many seem to have concluded that we’re still deeper in the woods than we think.

An interesting development this evening. The FDIC seized nine banks which are all a part of a holding company in Oak Park, Ill. Here is a link to the WSJ article on the demise of these institutions as well as a link to the FDIC website.

This is old news but I wanted to throw out a couple of thoughts about Ken Lewis and his impending departure. I have no great admiration for the guy nor do I think he particularly deserves a whole lot of sympathy, but I do think that some of the vitriol that has been directed his way by the MSM and the blogosphere has been over the top.

Hell of a recovery, isn’t it?

Let’s see. Auto sales as predicted plunge after the artificial C4C stimulus, ISM falls short of expectations, personal consumption expenditures are up but throw out auto purchases and it doesn’t look all that great and the unemployment numbers went the wrong way.

Bottom line, the Treasury has been financing the current deficit with short dated securities which makes good sense but sooner or later you have to lengthen them as rates rise. Maron has a good suggestion about how to go about that.

Thank God we still have Paul Volcker out there throwing out a few straight comments from time to time. In an era when the likes of Tim Geithner can speak volumes and put themselves on record on both sides of every issue, it’s refreshing to see the great man speak his mind.

First, Case-Shiller is out with its July home price survey. It followed the trend of improving prices established over the last couple of months. Nationwide prices were up 1.6% and the number of cities showing price declines dwindled to just two. Here are the numbers for the twenty cities in the survey.

The statement from the G20 Finance Ministers meeting in London would appear to constitute a win for Tim Geithner and Alistair Darling. I use the word appears because it is always wise not to take these sorts of pronouncements at anything more than face value.

Those lovable Wall Street ghouls have cooked up a new asset class to securitize — life insurance policies. I am not kidding you, they’re going into the business of buying life insurance policies from sick people, pooling them and then selling the securities to investors.

Reports filed by banks with the Federal Deposit Insurance Corporation indicate that at the end of June about one-sixth of all construction loans were in trouble. With more than half a trillion dollars in such loans outstanding, that represents a source of major losses for banks.

Remember Taylor, Bean & Whitaker, the Ocala, Florida mortgage bank that crashed spectacularly last week and was heavily involved with failed Colonial Bank of Birmingham, Alabama? Well they’re not done yet wreaking havoc.

That’s right, for the past ten years we have lost more jobs in the private sector than were created. Here’s the graph:

The Wall Street Journal article about FHA’s declining reserve problem sparked a lot of comment today. The Journal said that FHA was in danger of falling below their 2% reserve requirement and FHA said that wasn’t the case at all.

Among the problems that crop up with the innumerable proposals for reregulating the banks on the blogosphere and in the MSM is that they too often ignore the political realities that have to be factored into any workable plan. Not that many don’t have merit, just that they are practically impossible.

OK, it’s the first Friday of the month, time for the unemployment numbers.

The headline number was an increase in the unemployment rate to 9.7% from 9.4% in July. The number of jobs lost was 216,000 which marks a continuing improvement in that area but the number of jobs lost in June and July was revised upwards by 49,000, so that tempers things a bit. U-6 the broader measure of unemployment increased from 16.3% to 16.8% which is a bigger jump then in the base rate — not a particularly good sign.

This is the best blog post that I have seen in a long time. It comes from the Glittering Eye, a blog I highly recommend to you if for no other reason than the author eschews dogmatism, partisan politics and all other manner of bias in favor of just getting at the common sense of most issues.

Maybe it’s the dog days of August but Bill Gross’s latest missive seems a bit repetitive. Entertaining as always but more of the same talk about the “new normal”

Is this a good idea?

From Reuters: