So we have a lot of people that will get very upset about money going to foreign aid, money going to needy families, thinking that that might not be a good expenditure, but the point here is we’re giving much more money to Goldman Sachs and Citigroup, Bank of America, than we are to foreign aid or to needy families.
Image created by yours truly at Says-It.com.
Stag,
ReplyDeleteI had just read a similar article by Dean Baker seconds before I surfed over to your blog.
http://www.counterpunch.org/baker10072009.html
You must be channeling anti-bailout mojo through cyber-space.
Mark,
ReplyDeleteI am putting it up tonight, classic!
mab,
ReplyDelete"As we are constantly reminded, the financial crisis is behind us and the banks are back on their feet. In fact, they are more than just back on their feet. In many ways they are doing better than ever. The most recent data from the Commerce Department shows that financial industry profits now account for more than 31.5 percent of all corporate profits. This is a higher share than at any point during the housing bubble years."
That trend is NOT our friend.
Speaking of trends that aren't our friend, real yields on TIPS are dying again. The paper stagflationists are literally flooding back into them. The real yield on the 5 Year TIPS dropped to just 0.74% today. Not quite the 0.00% it hit during part of the rising oil crisis, but getting there.
The paper deflationists went for the 5 Year nominal treasuries of course. At 2.16%, what's not to like?
But the real winner is no doubt the WTF is going to happen next 'flationists as they continue to flood into in the three month treasury bills. Those yields hit 0.06% today. $10,000 saved for three months will gross you a hot dog and drink combo at Costco ($1.50) though. Party time!
Of course, you'll still owe income tax on that $1.50. Here's the good news though.
Those with $5 million invested in 3 month treasury bills would see $3,000 in income for the year (should these rates continue), which should easily qualify them for food stamps.
Stag,
ReplyDeleteBanks are flush with cash and profits!
http://research.stlouisfed.org/fred2/series/EQTA?cid=93
http://research.stlouisfed.org/fred2/series/CP?cid=109
http://research.stlouisfed.org/fred2/series/NFCPATAX?cid=109
Something ain't right. At end of Q1, financial profits appear to be $538.2B vs total corporate profits of $1031.1B (52%).
And bank equity to asset ratios are at historic highs.
It's all pretend in the banking industry. Not so on Main St. where tens of millions of families now have a negative net worth.
What a sham. Bernanke should be fire immediately for allowing this mess to occur. Moreover, playing games with ledgers is a far cry from saving the economy.
Mark and Mab,
ReplyDeletealso from the department of makes no sense, both Denninger and Zero Hedge find some strange problems with Alcoa's earnings and predictions of aluminum restocking. I think we have made it to the poit where everyone is just making stuff up now, no one will call them on it.
GYSC & mab,
ReplyDeletehttp://www.etfguide.com/research/222/8/Allow-Me-to-Introduce:-The-Biggest-Sucker-Rally-Since-The-Great-Depression/
“The worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to insure that as few people as possible escape the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. The bargains then suffered a ruinous fall. Even the man who waited for volume of trading to return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next 24 months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable.”
I'm now told my money is dumb, which is just fine by me.
Stag,
ReplyDeleteThe following from the BEA helps explain why NIPA profits have remained so high throughout this economic calamity.
http://faq.bea.gov/cgi-bin/bea.cfg/php/enduser/std_adp.php?p_faqid=457&p_created=1196100539
I knew something was drastically wrong. The S&P 500 had negative profits while the NIPA data still showed historically high profits.
I know that I know nothing. (Socrates, I think) Hmmmn. Doesn't that statement disprove its own validity?
mab,
ReplyDelete"Similarly, loan-loss provisions – which are allowances set aside to cover nonperforming loans – are not deducted as expenses in the national accounts because they represent a set-aside for future losses rather than payment for current operating expenses."
So if banks expected ALL of their loans to become nonperforming then they could still have historically high profits.
Good to know. I'm writing a check right now to buy banking stocks in the morning. That's assuming I can get my sarcasm under control (very unlikely).
Stag,
ReplyDeleteThat's assuming I can get my sarcasm under control (very unlikely).
Very unlikely? So your telling me ther is a chance:
http://www.youtube.com/watch?v=fcGj57cQIeg&NR=1
Oh yeah, there's a chance house appreciation and Wall St. investments will make up for declining incomes.
mab,
ReplyDeleteThat has to be THE most appropriate video to go with economic commentary since the planet was formed some 4 billion plus years ago.
I just about laughed myself out of my chair, lol.
Stag,
ReplyDeleteCapitalizing the letters "CON" in the word "eCONomics" is a pet peeve of mine. You can imagine all the reasons why.
Here's a peeved pet video that gave me a laugh:
http://www.youtube.com/watch?v=dR_LHlFwlhk
mab,
ReplyDeleteI've seen that video!
The cat sure resorted to "shock and awe" tactics once the situation got out of control.
On a deeper level, I think that the woman represents Ben Bernanke as he attempts to use a box to CONtain this country's CATastrophic financial problems. Unfortunately, the man represents the rest of us.