No More Bailout Money for Failed Banks

September 22, 2009

Phot by sVilen001

Phot by sVilen001

The Federal Deposit Insurance Corporation is seeking private equity firms to buy out troubled banks so as not to put an unnecessary strain on their budget.

Many more banks are slated to fail in the coming months because of defaults on real estate loans. It will not be easy to find private equity buyers as many are reluctant to take on the losses of these failed banks.

Out of the seventy-seven banks that have been closed, sixty-nine buyers have been found. The danger of exhausting the FDIC’s fund has caused Walter Buffet to comment on the need for the U.S. to cut back on the amounts of money it has been pumping into the economy to rescue it from economic disaster.

The U.S. spent $180.7 billion in July 2009, the most it has ever spent in one month in U.S. history. If the FDIC’s funding is exhausted, the U.S. will go to taxpayers to finance the FDIC’s loan sales and short-term obligations.

In view of France’s experience in establishing a bank and making John Law the owner, the U.S. must be mindful of not repeating France’s history and putting unscrupulous individuals in charge of these banks.

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Gold, Another Economic Bubble?

September 19, 2009

Photo by Eduard Traq

Photo by Eduard Traq

No doubt you have heard about the debate over whether we are in the midst of another economic bubble. Economists and financial experts say there are ten problem areas for us, and we need to pay attention to them.

Economic bubbles are not a new phenomenon. They have been occurring throughout history and mankind never seems to learn the lesson associated with them. It seems people are prone to looking for a “pot of gold” at the end of the rainbow only to find out it was not what they thought. This was the case in the economic collapse of France caused by John Law in the eighteenth century.

The ten problem areas are: the Chinese economy, the “Green” bubble, the Gold bubble, the Federal Reserve bubble, the Trash (junk) bond bubble, the Education bubble, the Subprime bubble, the Life Insurance securitization bubble, the Commercial Real Estate bubble and the Emerging Markets bubble.

It is interesting that the issue of increased gold prices is now an issue with the Chinese and Russian governments. The price of gold often increases when paper money is devalued by printing paper money.

It will be interesting to see how the Obama administration handles this challenge. We are fortunate that we have access to research and technology which could help us out of this problem before it gets out of control.

Voices of the Economic Crisis

September 14, 2009

I thought you might find this video interesting. I invite your comments.

Expanding My Business

September 14, 2009

949758_colorful_symbols__1In case you have not heard, I have expanded my business services to include website design, SEO, and children’s book illustration. I have decided I would use more of my skills. I am not giving up any of my current services, but this means I will have more to share with you.

I have spent many years in financial services and just as many, if not more in developing my creative side, which started out as a hobby. You will se some of my works on my website.

Consumer demands are changing and shopping habits have changed. I am pleased theat the economy is showing signs of economic recovery. I will continue to keep you posted on important developments. Thanks for your faithful following. I have enjoyed the comments.