An article published on “Market Watch” on February 23, 2010 stated (emphasis mine):
The number of distressed banks in the U.S. rose to 702 in the fourth quarter, the highest level in sixteen years, according to a report released by the Federal Deposit Insurance Corp. Tuesday. That number is up from 552 at the end of September and 416 at the end of June. This is the largest number of banks on its “problem list” since June 1993. Banks insured by the FDIC dropped to a total quarterly profit of $914 million in the fourth quarter, compared with $2.8 billion in the third quarter. However, the result was significantly better than the $37.8 billion loss for insured institutions during the fourth quarter of 2008. Insured deposits reported full-year net income of $12.5 billion. The FDIC reported that its’ Deposit Insurance Fund dropped further into negative territory, reporting a $20.9 billion loss in the fourth quarter, worse than its $8.2 billion loss in the third quarter. The agency hopes to make up that loss through advance payments by banks of $45 billion in fees.
Let’s do some math. Read more »
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I’ve been making this argument for a whole year now. Government attempts to prop up the sick US Economy will likely make the eventual landing harder and more painful than it would be if government simply did nothing. I know that’s probably not a popular opinion, particularly with those who are really hurting as a result of the current economy and with whom I empathize, but you’d probably have to agree with my opinion if you gave it some thought – that the almost $1.5 trillion that we added to the national debt last year to try to solve our economic woes was not a very good investment given the current level of unemployment is a full 2% higher than President Obama stated it would be if the stimulus package was passed. Read more »
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The equity market decline that I have been anticipating for the past couple of months may have begun. While markets typically don’t go straight up or straight down, it’s my view that we’ve seen the peak in the major US stock market indexes for the near term.
Take a look at the S&P 500 chart below. Note not only the significant decline but also the recent break below the support line represented by the blue line that I drew on the chart. Read more »
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