Tuesday, February 23, 2010

Bank Lending continues to plummet, $1 Trillion bank idea still on the table

The spectacular disaster that was the bank bailout continues to show the lack of stimulus to the real economy that it was.

"Bank lending plummets by $587B in 2009

Lending by the banking industry fell by $587 billion, or 7.5 percent, in 2009, the largest annual decline since the 1940s, the Federal Deposit Insurance Corp. reported Tuesday.

FDIC Chairman Sheila Bair said that some small banks have dialed back on lending because of financial weakness, a problem the Obama administration aims to address with a proposal to pump $30 billion in new federal aid into community banks.

The number of "troubled" banks -- those the FDIC considers at some risk of failure -- increased to 702 at the end of 2009, a 64 percent increase over the end of the previous year.

But Bair said that the vast majority of the decline was the result of lending cutbacks by the largest banks, which have tightened qualification standards and increased the proportion of money that they hold in reserve against unexpected losses.

"Large banks do need to do a better job of stepping up to the plate here," Bair said. "


It would have been better for the United States Treasury department to have openly shorted and bought puts on all of the banks( in addition to respectively tied indexes) needing the bailout and let them starve and head to zero and use the money it would have made to reconstitute a brand new banking system lacking usury ala North Dakota's state banking system that has ultra low rates of 1-2%.

Instead, we bailed out a collection of casino gamblers who turned around and used our money to lever up on commodities and oil and drive up the cost of energy inflation, something that hits the poor the hardest.

To that effect, our bailout of big banks was ANTI-CHRIST. We took from the working poor and heavily burdened middle class and gave to the Ultra rich who provide value added destruction in their drive for profits that leaves huge bubbles burst everywhere and allow unstable budgets to balloon like Greece's hidden debt.

Instead of allowing the banks to fail and use the money to create a new federally funded Trillion dollar backed bank( I know, it's socialist but it beats continuing the Fascist Merchant Bank lead plundering of Treasuries all over the world)

At some point, with his approval rating at %22 and with consumer confidence plummeting due to the continued rise in unemployment, the President would have to consider this simple plan the next time the big banks start failing which should be between April and July.


We could stand around and continue to watch our economy plummet and lead the world into the Great Depression Part II or we could use the Plunge Protection Team to go all in into betting against the parasitic "banking" institutions such as Goldman Sachs and use the resultant money to create a new bank using all the laid off workers from Wall Street that continue to pile up and use the banking infrastructure of the failed Zombie banks to create a new bank that is split off into several divisions after it is spun off in a few years.

This way, each American will actually get a bonus check from the spin off of the new bank into several banks for a new usury lite Non NY FED dominated banking system.

Or the President and all of the incumbents in the House and Senate can kiss their job security goodbye and usher in a New American Revolution.

It is best to heed good advice before the time comes that it becomes too late.

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