Economic Meltdown

Bank failure is 83rd in '10; pace more than double last year's

The fact that the criminals in charge still talk about a "recovery" is really quite disgusting.  The fact that the average person believes it would make Joseph Goebbels proud.

WASHINGTON (AP) — Regulators on Friday shut down a Nevada bank, raising to 83 the number of U.S. bank failures this year.

The 83 closures so far this year is more than double the pace set in all of 2009, which was itself a brisk year for shutdowns. By this time last year, regulators had closed 40 banks. The pace has accelerated as banks' losses mount on loans made for commercial property and development.

The Federal Deposit Insurance Corp. took over Nevada Security Bank, based in Reno, with $480.3 million in assets and $479.8 million in deposits. Umpqua Bank, based in Roseburg, Ore., agreed to assume the assets and deposits of the failed bank.

Link to article

Mark Hanson Interviewed on King World News - True Real Estate Market

How bad is the real estate market?  The downturn is only just beginning.  

Tax credits have ended. We are going to see some good numbers in may and perhaps June due to the flurry of activity created by people trying to get homes bought before the credits expired.  By July expect huge drop offs.  Other points of interest:    

• 70% of all loan mods are expected to default in 12 months, adding to the shadow inventory
• Foreclosures hit another record in May and are still rising
• According to National Association of Realtors, 60% of all home buyers in April put down 6% or less and only 14% put down 20%.
• Half of all buyers were first time buyers (demand stimulated by tax credits
• Prices must drop to get market moving

Full Interview

It sounds like the US will get what it has been asking for with China depegging its currency from the dollar.  We will also get what we deserve from this.  The dollar will take a beating and inflation will rise.  All of those cheap good we buy from China will no longer be cheap.  Ah...but exports you say.  What do we produce anymore?

From the article:

China's decision to move away from its currency peg might mean the yuan weakens against the dollar instead of strengthens as Washington wants, Nouriel Roubini, one of Wall Street's most closely followed economists, said on Saturday.

China said on Saturday it would gradually make the yuan more flexible after pegging it to the dollar for nearly two years, a move that the U.S. government and others around the world have long been calling for.

"This is the first significant signal in years of a change in Chinese currency policy," Roubini, best known for having predicted the U.S. housing meltdown, told Reuters.

But it remains to be seen how China would put the new system into practice including the composition of a basket of currencies that Beijing will use as a reference point for the yuan -- also known as the renminbi -- and the base date for that basket, he said in an e-mail.

Link to article

Lew Rockwell Interviews Gerald Celente

-WW III

-Civil Unrest

-UK next to default?

Link to article

Is the Mainstream Press starting to get it?

Probably not, but Taleb is getting a much fairer listen on CNBC than Peter Schiff has ever received even though Schiff has been saying it for 10 years.  This crisis is about debt.  It has always been about debt and it is getting worse, not better.

Peter Schiff - Comments on Bernancke's incompetence

Fed survey finds a modest recovery is spreading

Seriously this is funny at this point.  There is simply no recovery.  Friday's jobs reports should have made that clear.  The economy is about to take another nose dive and the criminals in Washington are gearing up for World War III.  

WASHINGTON (AP) -- For the first time since the beginning of the recession, economic growth -- modest and fragile, but growth nonetheless -- has spread to every corner of the country.

A survey released Wednesday found economic activity was improving across all 12 regions of the nation tracked by the Federal Reserve. It was the first clean sweep in the report since 2007.

Metal producers in Chicago and St. Louis cranked out more steel. Makers of drugs and medical equipment in the Northeast did better business. And sales of summer clothes were strong in fashion-conscious New York.

Still, the pace of growth in most parts of the country was described as modest. That's a sign that companies probably won't starting hiring again anytime soon in great enough numbers to bring down the unemployment rate.

Link to story...

Dr. Paul Craig Roberts on Alex Jones

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ECB warns of more bank loan losses

Below is just part of the article questioning whether or not the crisis of sovereign debt is over. Sadly, and as I have been saying for 2 years, it is not. It is merely beginning.  It will end with fiat currency crises, ultimately here in the US. These are not "contagious", but already inevitable.  It is only a matter of realization by the sheeple. 

"Some countries have experienced sovereign debt crises, for example Greece. Is this kind of phenomenon over? Now it seems that it's not so simple," Wen said. "The sovereign debt crisis in some European countries may drag down Europe's economic recovery.

He added it was too early to wind down stimulus deployed during the 2007-2009 financial crisis.

Governments around the world ran up record debts during the $5 trillion effort to pull the economy out of its deepest slump since the Great Depression and now face a tough balancing act: how to reduce debt without choking off growth.

ECB Governing Council Member Mario Draghi warned that austerity programs by European governments could snuff out a fragile recovery unless they were coordinated internationally.

Economic sentiment in the euro zone fell in May, defying analysts expectations of a slight improvement, in part due to the wave of austerity announcements.

However, ECB President Jean-Claude Trichet said the economy may expand more than expected in the second quarter.

The fact that not just fiscally weak southern European countries, but also nations such as France and Germany at the euro zone's core are under pressure to cut debt and deficits amassed during the financial crisis, is adding to concerns.

Full story.....

Housing on Life Alert - Mish Shedlock

Another excellent blog from Mish.  

He points to an article from Business Week where they discuss the facts that 90% of the entire mortgage market is being generated from Fannie, Freddie and FHA. That means, in essence, that only 10% are being written voluntarily. Yes, most houses being bought today are being underwritten with money stolen at the point of a gun. Now forget about whether or not you agree with me philosophically about government. This is not good for housing if private companies are not willing to step up and lend to borrowers to buy houses.  This cannot be sustained, and when it stops, the bottom will drop out of housing. 

Further, FHA loans have surpassed Fannie and Freddie for the first time in history since these loans require little money down.  The scary thing about this is many people are buying homes with this with appraisals coming back showing values above their purchase price. They are under the impression they have "equity". As soon as they sign that loan doc, however, their house will be used as the next appraisal.  And because there was no or very little money put down, their "equity" will evaporate very quickly and within a year they will be underwater. 

Then, of course, as I have mentioned many times, as soon as the government stops paying people to buy homes and buying mortgages (official now as of April 30) this thing will start coming down. 

A great quote from Mish:

"Can I ask a simple question: Who does not have a house that wants one and can afford one, and does not need money from the government to buy one, and is not in danger of losing their job?"

Mish's Blog Post