Signs of a Depression Blot out Recovery Propaganda.

by James Buchanan

More than one hundred banks have failed during 2009 passing a milestone that just screams “Depression” while the mainstream media is still trying to peddle Obama’s “recovery” propaganda. Not only did we exceed 100 bank failures, we did it in a big way with seven banks failing this week, tying the record number of failures per week for this year. One news article notes “Bank closings for the year hit 106 on Friday when regulators shut down three small banks in Florida, one in Georgia, one in Wisconsin, one in Minnesota and one in Illinois… The 106 failures are the most in a year since 1992 at the height of the savings-and-loan crisis. They have cost the federal deposit insurance fund about $25 billion so far this year, and hundreds more bank failures are expected to raise the cost to around $100 billion through 2013.”

US Banks have been failing at a rate of about three banks per week since June. It seemed more than a little suspicious when the rate of bank failures suddenly slowed right as the number of failures got above 90. Was there a deliberate effort to put off bank failure 100 as long as possible? Meanwhile there was a record number of foreclosures in August, which should translate into a record number of bank failures.

Mostly likely, under pressure from the Obama regime the FDIC slowed down the number of announced bank failures over the last several weeks to try to convince people things were getting better (or at least getting worse at a slower rate) and to put off bank failure number 100 for as long as possible. Last week, the total rose to 99, and now this week the FDIC announced seven bank failures bringing the total to 106. It seems fairly obvious they were “saving up” bank failure announcements.

A news article from last week noted “The most severe financial crisis since the 1930s has hit banks large and small. With unemployment rising, consumer spending slack and businesses shuttered, experts say up to 400 more banks could fail in the next couple of years. The 99 failures may not fully reflect the depth of banks’ travails. Many more banks – perhaps hundreds – are so weak they could have been shut down already, experts say. Many vulnerable banks are in limbo. Regulators have threatened to close them unless they shore up their balance sheets, but the recession has made it difficult to raise capital or sell assets.”

So we may be looking at 400 more bank failures in the next couple years and hundreds of banks are “so weak they could have been shut down already”. If anyone had any delusions about a recovery or that we’re “only in a recession”, this should really snap them out of it. Hundreds of banks failing combined with a real unemployment rate around 20 percent equals a Depression.