Econ 2009

[cheesehead]

Originally Posted by ewmayer

Stocks slump on sentiment slide: Wall Street pulls retreats after a surprise plunge in consumer sentiment. Stocks are vulnerable after ending the previous session at 10-month highs.

Ernst, your readership has risen this month.

Now, if you could persuade just a few of the economists on Briefing.com's survey list to check this thread weekly ...

[ewmayer]

Blackstone CEO “Earns” $702 million

Chief Executive Officer Stephen Schwarzman, a founder of the company, is cashing out. This years lucre — $700 million, plus some minor salary — is the first of 5 equal payments that will net him a cool $4.7 billion dollars. Nice work if you can get it.

My Comment: Current market cap of BX ~= $3.8 billion, down over 50% from its mid-2007 IPO [and it was down to ~$1 billion during March`s market low], when the strike price for Schwarzman`s options was presumably set. Like Barry said, nice "work" if you can get it. I expect it`s on to Goldman Sachs for Mr. Schwarzman, probably followed by an obligatory stint as head of the U.S. Treasury. After all, as Hank Paulson might say, "why pay taxes on all that money when you can go into 'public service' and get a tax waiver?" Paulson`s waiver on his GS stake was worth an estimated $200 million. and they say public service doesn`t pay...


From former World Bank economist Liaquat Ahamed`s recent book Lords of Finance (paperback version will appear at end of the year, if you want to save money or a more compact format), a nice historical green-shoots propaganda retrospective:

On December 14, 1929, [U.S. president Herbert] Hoover declared that the volume of shopping reported to him indicated that the business of the country was back to normal. That was some six weeks after the stock market crash.

Early in January, 1930, Secretary of the Treasury Mellon, under pressure from Hoover, announced, I see nothing in the present situation that is either menacing or warrants pessimism. I have every confidence that there will be a revival of activity in the spring. These ebullient assurances were greeted with a drop in the stock market prices to new low levels.

A year and five months later Mr. Mellon, addressing a group of international bankers in Washington, and apparently free for the moment from White House restraint, frankly admitted: I have no means of knowing when or how we shall emerge from the valley in which we are now traveling.

On January 22, the President personally expressed the view that the trend of employment had changed upward and then Secretary of Labor Davis, carrying out the refrain, gave it on his word that every major industry was showing increases and that we can expect a great deal of business in 1930.

In February and early March, Secretary of Commerce Lamont, acting on White House orders, took up the burden and on three occasions solemnly gave assurance that there is nothing in the situation to be disturbed about.

All this time, according to the most reliable labor statistics available in the United States at present, those of the New York State Labor Bureau, factories were closing down in increasing numbers and the unemployment line was steadily lengthening.

On March 8, 1930, the President himself again entered the lists with his now famous prediction that the crisis would be over in sixty days. (See May 2 statement below.)

On March 16, Julius H. Barnes, close personal friend and under-cover agent for the President, as Chairman of the President’s National Business Survey Conference, declared that the spring of 1930 marks the end of a period of grave concern. Barnes failed to add however that others would follow of even greater gravity.

On May 2, the President, with the expiration of his sixty days, trimmed his sails very sharply. In a lengthy pronouncement he conceded that things were rather disturbed, but was still irrepressibly optimistic. We have been passing through one of those great economic storms which periodically bring hardships and suffering to our people, he admitted. While the crisis took place only six months ago, I am convinced we have passed the worst and with continued unity of effort we shall rapidly recover.

Two months later, in the privacy of his office and under strict and repeated admonitions of secrecy, he petulantly told Amos Pinchot and a group of important business men who had called to urge him to do something drastic to relieve unemployment: Gentlemen, you are six weeks too late. The crisis is over.

My Comment: To use a Chappelle Show-like Rick-James-parody style of phrasing, "Mission accomplished, bitches!" I`m not fully in agreement with one of Ahamed`s central theses, that the insistence of the "Big 4" central bankers that nations return to the gold standard after WWI led directly to the Great Crash and even to WW2, but it is an interesting train of thought to explore. A fiat-money skeptic might well take a different view and say something along the lines of "This proves that the gold standard is the best discipline against governments printing fiat money in order to finance wars and all manner of fiscal excess." The fiscal discipline of a gold-type money standard (which need not be based solely on gold - in fact I think it is very foolish to base money on a "hard asset" of such little economic usefulness, better would be a basket of crucial commodities whose availability is not subject to the same kind of speculative whims as gold) coupled with a return to non-fractional-reserve banking (or at least much more leverage-limited FRB) is also a great preventer of the type of speculative bubbles which were blown in the 1920s and more recently.

In a commentary pertinent to my ongoing calling-BS on the official government economic statistics (especially those coming out of the BLS, and I think the "L" should be deleted in that acronym), the above book also notes:

According to the book, there were even firing/resignations from the government statistics offices over attempts to manipulate data.

Chart of the Day:

Found a link to this to this chart of monthly Chinese purchases of U.S. Treasury debt over on Chris Martenson`s blog - the Fed is going to great lengths to disguise the evaporating foreign demand for our sovereign debt by using the Primary Dealers as fronts to falsely inflate demand for treasuries. PDs buy treasuries and make sure the Fed-mandated shill-bid-to-cover ratio is met, then quickly and quietly turn around and sell the same issues to the Fed. And I expect the mainstream news and financial media are being "strongly disincentivized" to report on this debt-shell-game scam, lest they want to risk their reporters losing access to White House briefings and to the government bigwigs who make the regular rounds of the Sunday morning Talking Heads shows.

[garo]

Interesting factoid about Blackstone:

The share price never exceeded the IPO price except in the first week of trading. Currently at $14 down from the $31 IPO price.

[S485122]

Originally Posted by garo

True but the ECB is printing money in effect. For instance it has accepted all sorts of garbage securities from Irish banks as collateral.

Originally Posted by ewmayer

As gar notes, there are numerous ways for a central bank to effectively "print money" without appearing to do so.

I did mention the fact that the ECB can "print" moeny :

Originally Posted by ewmayer

Only the European Central Bank has that right and it is "independant" from member governments, European Council and European Commission.

My point was (bold added for emphasis) :

Originally Posted by S485122

Please note that the governments of the EURO zone have relinquished their right to "print" money.

Jacob

[Fusion_power]

The major factors affecting the market today are:

1. indecisiveness of consumers, nobody is willing to spend money if their income potential is likely to disappear overnight.

2. The staggering sums of money being printed in the U.S. are distorting the market for Treasuries by raising the specter of inflation.

3. Unemployment which is still on the rise with no end in sight.

Minor factors are:

4. Payscale devaluation, people are taking lower paying jobs just to keep food on the table.

5. irrational exuberance in the face of economic headwinds.

6. Ewmayer's constant bearish posts. :D :D :D!



Long and short of it is that the market is taking an overdue beating. Stocks are down on most exchanges today.

DarJones

[ewmayer]

Originally Posted by Fusion_power

The major factors affecting the market today are:

1. indecisiveness of consumers, nobody is willing to spend money if their income potential is likely to disappear overnight.

Actually, consumers are quite decisively *not* opening their wallets, despite all the past few months` green-shoots propaganda ... and once again "most economists and market analysts" are surprised. They just keep trying so hard to reflate the Greenspan economy - how long will it take them to realize that the Greenspan economic model (= "you can borrow and spend your way to unlimited prosperity") is BROKEN and the mighty deficit-spending U.S. consumer who drives 70% of our Ponzi economy ain`t coming back in the foreseeable future. (And one would hope that said consumer would never come back ... but then again, most people who lived through the Great Depression probably figured those lessons would never be forgotten/ignored, either).

The idea that the past 20 years of nearly uninterrupted "economic growth" was little more than the largest credit expansion in human history, that it was unsustainable, and that perhaps what is happening (and what *needs* to happen, despite the Fed`s all-out efforts to get the bubble back on) is a fundamental reset of the economy to a lower level seems to utterly escape most economists and government finance experts. That`s the problem with stocking e.g. the U.S. Fed with a bunch of Greenspan clones - the groupthink there is not open to dissent, even in the face of overwhelming contrary evidence. I fear that ideology-driven economics will reign there until the whole house of bubbles comes crashing down in a manner no amount of "liquidity provisioning" will be able to mask. And while the econo-ideologues running the show fiddle like the good neo-Keynesian acolytes they are, what remains of the real economy burns. It would be merely pathetic if the attempt to reflate the bubble didn`t run a very real risk of making the eventual debt reckoning (already being grappled with by consumers, but not by the U.S. government - the very opposite in fact) even worse than it would otherwise have been.

I try not to obsess about "the markets" especially as they appear so widely divorced from economic fundamentals, but it will be interesting to see if it e.g. the Dow closes down over 100 points today, or experiences the same kind of "resilient bounceback" (sometimes referred to as the "end-of-day ramp job") in the latter half of the trading day as it has on every threatening-to-be-a-100-point-down-day in the past 5 months. A conspiracy theorist (which thankfully I am not) might be inclined to say that "they simply won`t let it have a triple-digit selloff" because that might be damaging to "confidence in the recovery".

Some daily linkage: Being the resident Überbear, of course of the black-shoots variety:

The Treacherous Path for Housing: 42 Percent of California Mortgages with Negative Equity: $1 Trillion in Mortgages Submerged Underwater in California. $3 Trillion in U.S. Mortgages Underwater and Risking Foreclosure.

This recession was brought to us by housing but housing will not bring us out of it. That is a big mistake being made with propping up failed banks and lenders. The solution does not come from housing or the finance industries. Alt-A and option ARM loans should fail and they will fail in epic fashion. I’ve gotten a few e-mails now that it seems the public-private investment program (PPIP) is set to go but at a more trimmed down version. My response is this: Okay, let us assume all the toxic crap mortgages are put off onto the taxpayer. 100 percent. Let us just say we dump the $3 trillion in underwater mortgages to the U.S. Government. Now what? You still have to sell the homes. You still have to go through price discovery. Someone still needs to eat that loss. I’m amazed that some people think that once the toxic assets are shifted to the government that some mysterious Midas touch is going to turn these toxic mortgages into gold. This is the same idiotic logic that allowed Wall Street cronies to create collateralized debt obligations and junk filled mortgage backed securities. Their idea was “let us mix crap mortgages with mortgages that are less than crap” and somehow it will turn into a glorious triple-A rated security.

And by the way, all those bailouts are doing absolutely zilch in stemming the foreclosure crisis. Last month we hit an all-time record in foreclosure filings:

nationwide foreclosures

So much for stemming the issue and we are approaching one year since TARP. We have thrown some $13 trillion in bailouts and commitments to Wall Street and banks and all we get is a 50 percent stock market rally. Guess who is making out like bandits right now? It sure isn’t the American homeowner and worker. Talking about jobs, it might be important to get people working because without a job, it might be hard to make the mortgage payment. California is entering stage two of the housing implosion...

My Comment: Also see this related article by Mish.


Failed Banks Weighing on FDIC: [i]Amounts Tapped by Agency Reminiscent of Savings-and-Loan Crisis[/]

Banks in the U.S. that failed in the past two years were in far worse shape than those that collapsed during the industry's last crisis, a looming problem for the government agency charged with insuring deposits.

At three of the five banks that failed Friday, increasing the total to 77 so far this year, the financial hit to the agency's deposit-insurance fund is expected by the Federal Deposit Insurance Corp. to be about 50% of their assets.

My Comment: Perhaps this is why the FDIC deposit-insurance fund is itself on the brink of insolvency - of course they now (irony of ironies) have a $500 billion line of credit from the US Treasury, but it seems Sheila Bair et al are doing all in their power to avoid having to tap the Treasury, because "FDIC is Insolvent" is headline that might also impair "confidence in the recovery". Of course the fact that the FDIC waited far too long to take over many of the failed banks made the resulting hit proportionally worse.


Lying Liars and the Lies They Tell: This week`s LLATLTT awardee is congressman (and chair of the House Financial Services Committee) Barney Frank, who was caught in a flat-out lie in which he attempted to absolve himself from his having bought fully into the Bush/Greenspan "Ownership Society" ideal, which brought us our Beloved Hosuing Bubble: Here is what he said last week:

"I’ve always said the American dream should be a home - not homeownership," said Representative Barney Frank, chairman of the House Financial Services Committee and one of the earliest critics of the Bush administration’s push to put mortgages in the hands of low- and moderate-income people.

Oh really, Barney?

[__HRB__]

Originally Posted by ewmayer

My Comment: Perhaps this is why the FDIC deposit-insurance fund is itself on the brink of insolvency - of course they now (irony of ironies) have a $500 billion line of credit from the US Treasury, but it seems Sheila Bair et al are doing all in their power to avoid having to tap the Treasury, because "FDIC is Insolvent" is headline that might also impair "confidence in the recovery". Of course the fact that the FDIC waited far too long to take over many of the failed banks made the resulting hit proportionally worse.

Perhaps? They didn't have the dough to insure $50.000, so they upped it to $250.000! That's what one calls 'gambling on resurrection'.

[ewmayer]

Originally Posted by __HRB__

Perhaps? They didn't have the dough to insure $50.000, so they upped it to $250.000! That's what one calls 'gambling on resurrection'.

Not sure if qualifies as gambling if one has the backing of an outfit which can literally (and legally) print as much money as it likes. In other words, when the FDIC folks repeat their stock phrase "no one has ever lost a penny from an FDIC-insured account", what they really mean is "we guarantee all those $ in your account ... we just can't guarantee what you'll be able to buy with them." Seems to me the real gamblers are the ones in charge of the money-printing and distribution operation, who appear to be gambling that the economy will visibly turn around before the ever-increasing hum of the printing presses gets so loud that key interested parties notice and start to ask uncomfortable questions like "That alleged 'robust demand' for U.S. Treasury debt you refer to ... just where is that debt ending up after the primary dealers who overbid for it quietly turn around and resell it?" [Hint: It`s ending up at a prominent address on Maiden Lane in D.C.]

--------

Nice photo-archive link on ZeroHedge today:

Joliet Remembers the 1930s

My Comment: Hmmm, some of those bullish newspaper headlines look familiar...non-U.s. readers, please note the "NRA" in those depression-era newspaper headlines is not the gun-crazy NRA commonly associated with the acronym nowadays.


Meant to post this last week but never got around to it .... The UK Daily Mail reports a brewing potentially-huge scandal involving one of the biggest of the TBTF banks (note: approximate currency conversion is £1 = $1.64):

naked capitalism: JP Morgan Chase Caught Speculating with Customer Money

Daily Mail - Blair bank targeted in £8.5bn FSA probe
By Ben Laurance
10th August 2009

The bank where Tony Blair is an adviser is the target of an unprecedented probe involving billions of pounds of customers' funds, the Daily Mail can disclose.

JP Morgan Chase, whose chief executive Jamie Dimon last year recruited the former prime minister as an adviser, is being investigated by the City's watchdog, the Financial Services Authority for allegedly failing to keep track of £8.5billion of clients' money.

The FSA has called in a top firm of accountants to examine the bank's London activities after evidence emerged that JP Morgan had mixed customers' funds with its own.

Banks are meant to maintain a strict segregation of their own money from that which is held on behalf of clients.

But JP Morgan managers in London discovered last month that client and bank money used for trading futures and options - a way of speculating on movements in currencies, share prices and commodities - had apparently been put into a single pool.

They raised the alarm and notified the FSA. The scale of case is unprecedented, say City insiders. The FSA has penalised small firms in the past for mixing funds owned by clients and the banks themselves.

But this is thought to be the first case involving such a large household name. JP Morgan Chase faces the threat of an unlimited fine if the watchdog decides enforcement action is necessary.

News of the FSA investigation will come as a huge embarrassment for the bank, which is valued on Wall Street at £100billion.

It is thought that the JP Morgan Chase problem dates back to late 2002. This followed the takeover of JP Morgan by Chase Manhattan two years earlier.

Assets were not segregated to protect clients as FSA rules demand, insiders believe.

When the issue first came to light last month and the FSA was told, the authority called in specialists from leading accountancy firm KPMG to investigate. The cost of the probe - known as a section 166 review - will be met by the bank.

...
JP Morgan Chase has been regarded as one of the more robust of the banks to emerge from last year's meltdown in the global financial system. Among the six largest U.S. banks, it is the only one to have stayed consistently in the black since the recession began in 2007.

But it still took £15billion last year under the U.S. government's programme to prop up the financial system. The money has since been repaid. [ewm: But none of the profits generated by JPM using that free money to speculate in the markets has accrued to the U.S. taxpayer, and the bank continues to be the benficiary of several forms of "backdoor bailouts", including loan guarantees from the FDIC]

Last month, the bank reported quarterly earnings of £1.64billion, which was a major factor in spurring the recovery in its shares and in Wall Street prices as a whole.

A report last week showed that last year, the firm paid bonuses of £600,000 ($1m) or more to 1,626 employees. Of those, more than 200 received at least £1.8m. The top four earners received a total of nearly £45million between them...

My Comment: The author of the Naked Capitalism article comments:

"Why the surprise? This is what the Wall Street banks do, even under a 'reform' administration. They use their customer money and public funds, for which they pay a pittance, to speculate in markets, distorting prices and taking enormous risks, in order to pay themselves outrageous bonuses. They buy political influence to enable regulatory capture and support their financial schemes. And when their bets go wrong, the public absorbs the losses. This is the model of US gangster banking in the 21st century.

The Obama Administration cannot energize their health care reform because the public demands reform in the financial sector, and quite frankly Obama has lost the 'high ground' of the reformer by his inability to free his administration from the growing taint of scandal and conflicts of interest.

So it remains for the rest of the world to begin to rein in the outrageous behaviour of the US financial institutions that treat the world's bourses as their private casinos.

For a party that spent eight years on the sidelines, the American Democrats have proven themselves to be particularly inept at doing anything to promote their agenda once presented with a solid majority by the voting public. One has to wonder if they ever intended to deliver on their promise of change at all.

The banks must be restrained, and the financial system reformed, before there can be any sustainable recovery."

[__HRB__]

Originally Posted by ewmayer

[...]but it seems Sheila Bair et al are doing all in their power to avoid having to tap the Treasury, because "FDIC is Insolvent" is headline that might also impair "confidence in the recovery".

That's the nice way to see it.

I - on the other hand - see a bunch of incompetent, delusional, dishonest fools, who will do everything to stay popular (and keep their jobs), which on exceedingly rare occasions actually coincides with doing the right thing.

Originally Posted by ewmayer

Not sure if qualifies as gambling if one has the backing of an outfit which can literally (and legally) print as much money as it likes.

It's the humans running these outfits doing the gambling, since they are the ones risking their powers. If the treasury had self-consciousness, self-preservation, etc., Sheila et al. would have all had swimming accidents involving 250lbs. of pennies tied to their feet.

[ewmayer]

Chris Martenson has a nice discussion today about why the FDIC has been dragging its heels with respect to taking over insolvent banks, including several which are hugely insolvent by their own admission and which have basically begged the FDIC to take them over, and which - instead of doing what its charter mandates and taking them over ASAP - the FDIC is now desperately "shopping around" in hopes of attracting a private-equity bidder which would allow it to minimize the near-term hit to its depleted insurance fund. Some choice excerpts:

To review, banks have been granted a waiver by the government to essentially overstate the value of their assets, a convenience that wags refer to as "mark-to-fantasy" accounting. When the FDIC swoops in on a Friday afternoon and takes over a failed bank, they have to start with the bank's own estimates of asset values when assessing the possible losses. To put it bluntly, these are pie-in-the-sky estimates that will only ever disappoint.

Looking carefully at the numbers above, we see that the FDIC estimated $2,147 million in losses, but spent $4,137 million, resulting in losses that were 92% higher than expected (and counting). I don't know about you, but I happen to think that a 92% variance is a lot.

None of this is the least surprising to those who have been paying attention. It is another shell game, being conducted for the benefit of a very few at everyone's expense. It works like this:

1. Allow banks to effectively lie about the value of their assets.
2. Let them operate until it is beyond obvious that they need to be shut down.
3. Act surprised when their losses are a lot higher than "expected."

Nobody who is paying attention is fooled in the slightest, but unfortunately, very few seem to be paying attention.

And on the moral hazard implicit in the existence of the FDIC:

This is just one more example of where giving banks extra maneuvering room, by allowing them to overestimate the actual worth of their assets, has only made matters worse.

The alternative? Let the bondholders and shareholders of failed banks get completely wiped out. Let a large number of failed banks go out of business. It is a complete fabrication to suggest that we need anything more than a fraction of the existing banks and financial institutions. Certainly quite a few could go under, and we'd be none the worse for the wear. Then, if there's any additional exposure left in the remaining banks, have the problem assets be nationalized so that a healthy core remains.

At the most basic level, the FDIC itself is a very bad idea. While protecting depositors is a good thing, the FDIC also encourages bad banks to engage in risky behaviors, because there's no detectible reason for depositors to prefer one bank over the other. All pay essentially the same rate of interest, and all the monies are FDIC-insured. Bad banks that take on a lot of risk make huge profits compared to their more sedate competitors. Before you know it, perilously risky lending is the new normal.

And then the bad times hit, the bad banks are bailed out, and their safer competitors are left paying for their mistakes. And here we are, reaping the 'rewards' of this well-intentioned - but ultimately destructive - government program.

Lest you think that this moral hazard is some sort of passive by-product about which I am merely speculating, I offer you this account from March of 2009:

FDIC Criticizes Massachusetts Bank With No Bad Loans for Being Too Cautious

A Massachusetts bank that has defied the odds and remained free of bad loans amid the economic crisis is now being criticized by the Federal Deposit Insurance Corp. for the cautious business practices that caused its rare success.

The secret behind East Bridgewater Savings Bank's accomplishments is the careful approach of 62-year-old chief executive Joseph Petrucelli.

"We’re paranoid about credit quality," he told the Boston Business Journal.

That paranoia has allowed East Bridgewater Savings Bank to stand out among a flurry a failing banks, with no delinquent loans or foreclosures on its books, the Journal reported. East Bridgewater Savings didn’t even need to set aside in money in 2008 for anticipated loan losses.

But rather than reward Petrucelli's tactics, the FDIC recently criticized his bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Journal reported.

Can you imagine? Even as the credit crisis is savaging the land, the FDIC, lacking more urgent matters we guess, was busy slapping "needs to improve" ratings on the safest and soundest bank in the land.

My Comment: I would argue that the moral hazard situation is even worse than Martenson states, because in fact there *are* several big reasons for consumers to prefer one bank over another. The obvious one is interest rates on deposits: higher is better, right? Well, except that to be able to pay above-average interest rates a bank will usually need to take greater risk in the things it does with its depositors` money. Reason #2 is that consumers needing loans will flock to banks which offer the lowest interest rates on loans (that translates into below-market rates in some cases, i.e. loans being offered at rates less than their risk level justifies) and which offer the "easiest credit". Why subject yourself to a multiweek grilling about the state of your finances at to get a mortgage at Conservative Bank & Trust when EZ-Credit Home Loanzz has a 3-point Speedy Mortgage Loan^TM approval process which requires you to fill in just the following 3 fields:

1. Name (real name optional)
2. Address (preferably yours, but no biggie)
3. Can you fog a mirror? ___ Yes ___ Sure ___ Of course ___ You betcha ___ Damn Straight ___ Durn Tootin ___ Shaving or Full-Length? _ No
3a. If you answered in other than the affirmative to item [3], please see one of loan specialists about our special MirrorFog assistance plan.
3b. If you don't have a clue what "in other than the affirmative" means, stop being a dickweed and just answer "Yes" to [3], OK?.


Chris also has some excellent advice about how to protect yourself from any of the various headaches which can and do in the wake of an FDIC taking-into-receivership of your bank:

My immediate concern, should the FDIC find itself short of cash, is that it will simply turn from dragging its feet on closing banks to dragging its feet on paying out depositor claims. This means that if you have money in a failed bank, it could be tied up for quite some time.

Here's the advice I gave last year when I wrote about the FDIC:

1. Do not keep more than $100k in any one bank account (okay, no genius insight there…)
2. Always keep 1-2 months worth of basic living expenses, in cash, out of the bank but in a safe place. This way, if the banks close down, the ATMs aren’t working, and checks won’t clear, you’ll still be able to go on with things as the crisis gets resolved. And don’t worry; you won’t be losing much in the way of interest payments on that cash.
3. Be prepared to run, not walk, down to the bank to remove your funds if the bank looks like it’s going down. Being one step ahead of the legal machinery could save you a lot of anxiety, if not your money. Here I would keep a sharp eye on the bank's stock price, because that will give you the earliest possible warning. The FDIC is notorious (and for good reason) for keeping mum about a troubled bank prior to seizing the assets.
4. All banks are NOT created equal. Only keep your money in a Blue Ribbon bank (as rated by Veribanc in their Blue Ribbon Report) or in one that is rated “B+” or higher by TheStreet.com. If need be, separate your holdings across several banks to assure your risk is not overly concentrated. Also, just ask around – some banks play a riskier game than their local brethren, and knowing who’s who could be a real life saver.

Another great place to check on your bank is to see if it appears on this unofficial list of troubled banks maintained at Calculated Risk. If my banks were on that list (I use several, all highly rated, to spread the risk), I would switch to a different (highly rated, naturally) bank.

[__HRB__]

From http://en.wikipedia.org/wiki/Antisoc...ality_disorder

Three or more of the following are required:[1]

1. Failure to conform to social norms with respect to lawful behaviors as indicated by repeatedly performing acts that are grounds for arrest;
2. Deceitfulness, as indicated by repeatedly lying, use of aliases, or conning others for personal profit or pleasure;
3. Impulsivity or failure to plan ahead;
4. Irritability and aggressiveness, as indicated by repeated physical fights or assaults;
5. Reckless disregard for safety of self or others;
6. Consistent irresponsibility, as indicated by repeated failure to sustain consistent work behavior or honor financial obligations;
7. Lack of remorse, as indicated by being indifferent to or rationalizing having hurt, mistreated, or stolen from another.

For Congress, Senate & the Prez. I checked: some 1, definite 2, 3, 4 (McCain!), definitely 6, and 7. They're a bunch of psychopaths*.

Any further questions?

*Eeek! Eeek! Eeek! Eeek! Dah-dum! Dah-dum! Help! Help! 05/01-05/31**
**31 x Mayday