Historic CHANGE, historic..........from Rico

Historic CHANGE? You wanted change? How about a historic banking crisis in your future?

The combination of five factors suggest that Obamanomics could not have come at a worse time, and that the collective economic genius of our politicians and government hacks may do for us all.

1. Banks are simply NOT doing enough business. Commercial bank credit growth has dropped to 2%. See chart.

2. Banks are failing at a rate NOT anticipated two months ago. See chart.

3. Defaults will increase for several more quarters.

4. The FDIC is in real trouble. Like Soc Security, here is NO CASH in the FDIC balance sheet. The government spent it on other stuff and traded IOU's for it. Great, eh? IOU's from the gov't to itself again! FDIC has to borrow any cash it needs (and pay interest) and it is 'on the hook' for about $8.3 trillion in insured deposits in a distressed banking system.
- This is a NICE way of saying FDIC is insolvent...aka BANKRUPT.

5. We may yet go below the 2% historic low in bank credit volume. See chart.

Take away: We may see in 2010 a repeat of the 1873 banking crisis aka "the long depression" which was a 40-year period of rolling recessions.

We are NOT out of the woods yet kids!!!