So far this year 11 banks have failed. 14 since February of 2007. In the past 2 years 27 banks have closed. Some of those came under FDIC control long ago. (Source)
Back in March, Bear Stearns, one of the largest investment banks in the world was sold to JPMorgan Chase for $10 a share. Its 52-week high had been $133.
Just last week, Fannie Mae and Freddie Mac got rescued by the federal government.
This weekend, we learned that Merrill Lynch will be purchased by Bank of America, who also purchased the troubled Countrywide Financial back in January.
To add insult to injury, Lehman Brothers may file for bankruptcy tomorrow. This news has led to the dollar falling in international trading.
John McCain thinks the ”fundamentals of the economy are strong”, even though he has said he doesn’t know much about the economy, and his economic advisors have called the American people a nation of whiners.
I’m not trying to whine, but if the fundamentals of our economy are strong, why has unemployment risen to 6.1%?
Why are banks failing at the highest rate since 1986?
What does this mean for the rest of the economy?
Ian Welsh at firedoglake says that a lot more bankruptcies may be on the way due to these failures, but not all of them in the financial markets.
…The banks and the remaining brokers have a lot of this toxic waste on their books, and they don’t have it on the books at market prices, because there is no market price. A market price is about to be created for a ton of it, as Lehman is forced to sell during its bankruptcy liquidation. That will force banks and brokerages and other holders of this crap (like municipalities, States and pension funds) to also have to value it. A lot of them are going to find out that they’re bankrupt….
The fundamentals of our economy are strong? Really? That’s interesting, because what I’m hearing is that our cities could go bankrupt because these million dollar douchebags have stacked and gamed the system for big money, but gambled and lost? Strong?
I think I need a drink.
How much longer can this go on? How much longer can we borrow from other nations to support our wild flung fantasies? How much longer will the American people allow our nation to be run into the ditch by people who have nothing more than self-interest in mind?
Remember, just because you don’t understand it, doesn’t mean it doesn’t effect you.