Seven new bank closing occurred last Friday bringing the total of bank closings this year in the U.S. to 103. What does this tell us about the strength of the U.S. economy even when Wall Street has been feeling bullish? The lack of a recovery in the community bank system is contributing to a stalled U.S. economy. The mixed results on Wall Street today are an indication that the economic momentum has run out-of-steam and is flatlining the economic bounceback in the U.S.
- Unemployment remains high and at the current rate of hiring in the private sector, the best case scenario to regain the 8 million jobs lost during the recent recession is a whopping 6 years .
- New home sales were up in June, but these gains are offset by previous months of March, April, and May and keep the adjusted gain to a 60 year low.
- Worsening economic outlook has created more renters. This is reflected in a decline in home sales by people aged 35-49 years, the optimum years for home ownership that traditionally have provided a boost to sales.
As Simon Johnson, a former chief economist with the International Monetary Fund now at the Massachusetts Institute of Technology’s Sloan School of Business, pointed out in May of 2009 that the stress tests done by the Obama Administration were more of a clever stalling action that“…may have served the administration’s political needs [at that time].”
Bluntly, Warren Buffet observed the stress tests focused on banks’ debt — not on whether their operations were basically strong. By extension, this can also be applied to the current stress tests conducted in Europe. Further this can be seen in a fall in consumer transactions by such bellwether businesses as office supply sellers.
But As For Me…
The Obama Administration keeps trying to bolster “hope” with its spin on the economy; however, the figures it gives out are incomplete and fail its’ own stress test of transparency. Makes one think of an old computer expression: Crap In, Crap Out!
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What Does The Continued Closing Of Banks Tell U.S. About Its’ Stress Tests?
by admin on July 27, 2010 · 0 comments
in Commentary, Economy, Europe, Housing, Obama, Recovery, Timothy Geithner, unemployment, Wall Street
Seven new bank closing occurred last Friday bringing the total of bank closings this year in the U.S. to 103. What does this tell us about the strength of the U.S. economy even when Wall Street has been feeling bullish? The lack of a recovery in the community bank system is contributing to a stalled U.S. economy. The mixed results on Wall Street today are an indication that the economic momentum has run out-of-steam and is flatlining the economic bounceback in the U.S.
As Simon Johnson, a former chief economist with the International Monetary Fund now at the Massachusetts Institute of Technology’s Sloan School of Business, pointed out in May of 2009 that the stress tests done by the Obama Administration were more of a clever stalling action that“…may have served the administration’s political needs [at that time].”
Bluntly, Warren Buffet observed the stress tests focused on banks’ debt — not on whether their operations were basically strong. By extension, this can also be applied to the current stress tests conducted in Europe. Further this can be seen in a fall in consumer transactions by such bellwether businesses as office supply sellers.
But As For Me…
The Obama Administration keeps trying to bolster “hope” with its spin on the economy; however, the figures it gives out are incomplete and fail its’ own stress test of transparency. Makes one think of an old computer expression: Crap In, Crap Out!
Tagged as: bank failures, community bank system, dave zimmerman, economic bounce back, economy stalled, european stress tests, home sales, Obama, office supply companies, renters, simon johnson, stress tests, U.S. economy, Wall Street, wall street bounce flatlining, wall street mixed results, warren buffet