The BIG question....................from Rico

The worst is behind us. Let's talk recovery. Green shoots and leaves. Whew! Close one, eh?

Believe that hogwash and you might as well leave your wallet under your pillow...not for the tooth fairy to fill, but for the tax fairy to empty!

FAILED BANKS. [chart] You should note that the bar for 2010 is only for the first quarter! Compare it to 2009. There will be many more failures in 2010.
- The mortgage crisis hit in 2007, and you can see the results in 2008 and 2009. We're not done yet.

THE NEXT WAVE OF FAILED BANKS is yet to come. [chart] The "exotic" mortgages were written from 2004-2007 to help your average Joe & Jane afford mortgages on over-priced housing at the peak of the real-estate bubble. They are going to RESET to higher rates very soon. Can you say "option ARM?" I knew you could.
- Gawd he'p me I'd love to hear Bawney Fwank say it....maybe even in duet with Nancy Pelosi? But I digress.....

These coming resets will cause another wave of bank failures due to foreclosures of people who now owe more on their homes (1) because of fallen market values, and (2) because they made minimum payments for 5 years. They are "upside down." (Surprise! A negative amortization schedule actually ADDS to the existing mortgage balance owed.)

FDIC. Federal Deposit Insurance Corporation. It's broke. Replenishing insured deposits up to $250K has been a complete disaster for them. Look for them to 'drop' insured deposit aounts back to the pre-crisis $100K level which would cut its claims payout by over 50%.

Maybe it's a good time for Timmy Geithner to unload....er, "sell" some of the Treasury's Citibank stock as recently announced. Maybe it's an even better time for Prince Alwaleed to have gone back to Saudia.
- It's sure not a good time to be buying any financials right now!!!!

The BIG question might be whether we are better off after trillions in bqailouts and subsidies, but even BIGGER questions will be if enough more trillions can be 'printed' to paper-over this huge financial hole in our future (and if enough paper is 'printed' will anyone want to hold it any longer)?
- Zimbabwe is soooo hard to say. How about Pelosi-Reid-Obama sing "let them eat Dollars insyead of cake?" ....lyrics inspired by the famously tone-deaf marie Antoinette.