LOOKING FOR A GOOD TIME?

Unemployment is at 17.5% (higher in certain areas and in certain sectors of the job market). The FDIC reports that 552 financial institutions, with combined assets of $345.9 billion, are in trouble. Some will fail. The FDIC deposit insurance fund is at a negative $8.2 billion dollars with $23.3 billion in cash to cover future failures. That's not even 10% of the potential losses if the banks in trouble fail. Deposits are not safe any longer.

Of course, the government can always print more money to cover bank losses and make good on your FDIC insurance coverage. This will further devalue the currency so your losses will be made good with cheaper money, effectively undermining the claim of full coverage of your loss.

Banks are hoarding the money we have given them, refusing to lend to small business and individuals. There is no money to purchase anything but the essentials, thus there is nothing driving expansion. Even if demand was there, how could companies expand and create jobs without the availability of capital to fund the expansion?

I'm just a dumb carpenter. I keep hearing the "experts" say that the recession is over and happy days are right around the corner. Maybe it's just my simple education and lack of faith in the system, but I just don't see it. If there is no money, how can people buy? If no one is buying how can the economy expand? Why is the market going up, up, up?

It looks to me as though all of the "good" economic news is nothing more than hot air blowing up another bubble. I'm thinking that the pimps in the financial service business are trying to pretty up a disease ridden, worn out old whore in the hopes that they can get us to put up our money for one last ride. They want to lure us into some back alley of financial promise, roll us and leave us beaten and bleeding, our money gone and our pockets empty. "Hey sailor, new in town?"

Don't listen to the Siren's song.

"U.S. lenders saw loans fall by the largest amount since the government began tracking such data, suggesting that nervousness among banks continues to hamper economic recovery.

Total loan balances fell by $210.4 billion, or 3%, in the third quarter, the biggest decline since data collection began in 1984, according to a report released Tuesday by the Federal Deposit Insurance Corp. The FDIC also said its fund to backstop deposits fell into negative territory for just the second time in its history, pushed down by a wave of bank failures.

The decline in total loans showed how banks remain reluctant to lend, despite the hundreds of billions of dollars the government has spent to prop up ailing banks and jump-start lending. The issue has taken on greater urgency with the U.S. unemployment rate hitting 10.2% in October, even as the economy appears to be stabilizing...

...The FDIC's quarterly banking profile, which analyzed data from 8,099 federally insured banks, reported that 552 financial institutions, with combined assets of $345.9 billion, were on the government's problem list at the end of September, up from 416 with $299.8 billion of assets at the end of June. That means roughly 7% of all U.S. banks are on the list and face a higher probability of failure...

...The FDIC said its deposit-insurance fund, which backstops trillions of dollars in deposit accounts, fell to a negative $8.2 billion at the end of September, an $18.6 billion drop from the end of June. The FDIC said one reason for the decrease was that the agency shifted $21.7 billion from the fund into reserves for bank failures over the next 12 months.

Even though the FDIC's fund balance was negative, it still had reserves of cash. The FDIC said it had $23.3 billion in cash at the end of September to help resolve future bank failures."

Wall Street Journal

"In October, the number of unemployed persons increased by 558,000 to 15.7
million. The unemployment rate rose by 0.4 percentage point to 10.2 percent,
the highest rate since April 1983. Since the start of the recession in
December 2007, the number of unemployed persons has risen by 8.2 million,
and the unemployment rate has grown by 5.3 percentage points."

Dept. of Labor

As experts debate the potential speed of the US recovery, one figure looms large but is often overlooked: nearly 1 in 5 Americans is either out of work or under-employed.

According to the government's broadest measure of unemployment, some 17.5 percent are either without a job entirely or underemployed. The so-called U-6 number is at the highest rate since becoming an official labor statistic in 1994.

CNBC