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Stewie
05-16-2011, 12:52 PM
The fiscal state of the US Federal Government is a fucking joke. They are borrowing from pensions as of today to cover their asses. Raping Social Security with IOUs wasn't enough, now it's private accounts. YEEHAW!!!!!

Direckshun
05-16-2011, 12:54 PM
I feel, sometimes, in the dark of the night, like my scrotum has its own account here.

HonestChieffan
05-16-2011, 12:55 PM
Hope N Change baby

Stewie
05-16-2011, 01:00 PM
I feel, sometimes, in the dark of the night, like my scrotum has its own account here.

Anyone who would listen to your dumbassery on economic issues would live like you, right? Shitty apartment or some other hovel, but a self-proclaimed enlightened messiah. Go somewhere else to spew nonsense... someone will buy in.

RedNeckRaider
05-16-2011, 01:03 PM
Anyone who would listen to your dumbassery on economic issues would live like you, right? Shitty apartment or some other hovel, but a self-proclaimed enlightened messiah. Go somewhere else to spew nonsense... someone will buy in.

I am betting he is middle class and makes a comfortable living~

Stewie
05-16-2011, 01:07 PM
I am betting he is middle class and makes a comfortable living~

Heh. I've met him. He's not middle class.

RedNeckRaider
05-16-2011, 01:12 PM
Heh. I've met him. He's not middle class.
Really? He has grown on me. I am reasonably certain he justs fucks with people on here. He used to get my nose open and I am pretty sure it provided him some chuckles. I would like to meet him just out of curiosity. Throw back some cold ones and cuss and discuss life it's own self~

Amnorix
05-16-2011, 01:15 PM
The fiscal state of the US Federal Government is a fucking joke. They are borrowing from pensions as of today to cover their asses. Raping Social Security with IOUs wasn't enough, now it's private accounts. YEEHAW!!!!!

They are not "borrowing FROM pensions", they are no longer contributing TO pensions, to federal employees, which is what many companies do when their are in financial difficulties.

It's neither illegal nor improper. Of course, it's not ideal either, but neither is the situation our leadership has gotten us into...

Cave Johnson
05-16-2011, 01:23 PM
We're been run/held hostage by children. That's the only possibly explanation for passing a budget a few months ago that required the debt ceiling to be raised and then punting that responsibility.

BucEyedPea
05-16-2011, 01:34 PM
The fiscal state of the US Federal Government is a ****ing joke. They are borrowing from pensions as of today to cover their asses. Raping Social Security with IOUs wasn't enough, now it's private accounts. YEEHAW!!!!!

How the US Government will seize your retirement account (http://www.lewrockwell.com/orig11/black-s51.1.html)


Obama is fundamentally changing America—> socialist state.

Direckshun
05-16-2011, 01:37 PM
Heh. I've met him. He's not middle class.

I was pretty fucking evil, wasn't I?

Direckshun
05-16-2011, 01:38 PM
I would like to meet him just out of curiosity. Throw back some cold ones and cuss and discuss life it's own self~

I live in Springfield. I'm not out of reach.

BucEyedPea
05-16-2011, 01:53 PM
Are you a poor bloke Direckshun?

Direckshun
05-16-2011, 01:57 PM
Are you a poor bloke Direckshun?

I don't share personal information about myself on here.

RedNeckRaider
05-16-2011, 02:07 PM
I live in Springfield. I'm not out of reach.

Maybe if I get that far west, I live on the east coast now~

Stewie
05-16-2011, 02:10 PM
They are not "borrowing FROM pensions", they are no longer contributing TO pensions, to federal employees, which is what many companies do when their are in financial difficulties.

It's neither illegal nor improper. Of course, it's not ideal either, but neither is the situation our leadership has gotten us into...

Symatics. The Fed is in dire straights and this proves it. Obama is driving us down the road he said he would change.

Stewie
05-16-2011, 02:13 PM
I was pretty fucking evil, wasn't I?

How could a 5'8" skinny dude in a $2 t-shirt be evil? You want an upgrade to a free $5 t-shirt through the taxes I pay.

Amnorix
05-16-2011, 02:13 PM
How the US Government will seize your retirement account (http://www.lewrockwell.com/orig11/black-s51.1.html)


Obama is fundamentally changing America—> socialist state.


The article mentioned that Treasury has done this before (not paying into pensions), so presumably this is nothing new or specific to Obama, so you're wrong there.

And your article is also wrong, on several levels


In the US, public pensions have been raided for years, Congress routinely ‘borrows’ from Social Security to make up budget shortfalls. This is what talking heads mean when they play down concerns of a $14 trillion debt “because we owe it to ourselves – ” $4.6 trillion of the debt is owed to intragovernmental agencies like Social Security.

Chances of this money being repaid to Social Security in full? Slim. The trend is more debt, not paying off existing debt. In fact, I’m convinced that politicians have their eyes firmly fixed on the trillions of dollars in private, individual retirement accounts (IRAs) in the United States to fund new spending.

Social Security is not now, AND NEVER HAS BEEN, a public pension. It operates now as it has always done -- current workers paying in, former workers getting benefits. No lockbox. No guaranteed payment. No rate of return.

You're right that Social Security is unlikely to be paid off in full, but of course that IOU is just a fictional and idiotic right pocket owes the left pocket kind of accounting gamesmanship that government unfortunately specializes in.

What some guy at LewRockhead is "convinced" of is as meaningless ot me as what some dope at Democratic Underground (or whatever it's called) is sure will happen.

Amnorix
05-16-2011, 02:15 PM
Symatics. The Fed is in dire straights and this proves it. Obama is driving us down the road he said he would change.

Semantics.

The budget/deficit/debt are a disaster in my mind, but it's not quite Chicken Little time yet.

And the article mentioned taht this (not paying into pensions) has happened before, so it's not like Obama is driving the bus any differently than past presidents.

Direckshun
05-16-2011, 02:16 PM
How could a 5'8" skinny dude in a $2 t-shirt be evil? You want an upgrade to a free $5 t-shirt through the taxes I pay.

LMAO

Stewie
05-16-2011, 02:17 PM
Social Security is not now, AND NEVER HAS BEEN, a public pension. It operates now as it has always done -- current workers paying in, former workers getting benefits. No lockbox. No guaranteed payment. No rate of return.


It's a Ponzi scheme. The sheeple have bought in because they get a letter in the mail that tells them they'll get $XYZ every month when they retire.

Madoff would be so proud of a system like that!

Simplex3
05-16-2011, 02:19 PM
It's a Ponzi scheme. The sheeple have bought in because they get a letter in the mail that tells them they'll get $XYZ every month when they retire.

Madoff would be so proud of a system like that!

Madoff couldn't force people to join at gunpoint.

Amnorix
05-16-2011, 02:32 PM
It's a Ponzi scheme. The sheeple have bought in because they get a letter in the mail that tells them they'll get $XYZ every month when they retire.

Madoff would be so proud of a system like that!


Madoff committed theft and fraud. The Social Security system is not opaque, nor is how it operates any kind of secret.

To qualify as a "ponzi scheme", you must have the fraudulent theft. SS therefore isn't a ponzi scheme.

If you want to say SS is a striaght up redistribution of wealth scheme from current workers to former workers, there I agree with. If you want to argue that it is unsustainable going forward in the same manner in which it has historically operated, as a result of changing demographics, then I think that is absolutely undeniable.

But spare me the Madoff, ponzi scheme rhetoric.

Simplex3
05-16-2011, 02:44 PM
Oh, the feds might get off on a technicality if they were sued over Socialist Insecurity, but you have to admit all the marketing and rhetoric says to people that it's a guarantee. I would bet the percentage of people who know it's a crock is lower than we'd think, and among the people that will rely on it that percentage is probably far, far lower.

Amnorix
05-16-2011, 02:52 PM
Oh, the feds might get off on a technicality if they were sued over Socialist Insecurity, but you have to admit all the marketing and rhetoric says to people that it's a guarantee. I would bet the percentage of people who know it's a crock is lower than we'd think, and among the people that will rely on it that percentage is probably far, far lower.

It's neither guaranteed nor a crock. Far from a crock, it has in fact been one of the most amazingly successful governmental programs ever, recasting society so that the elderly are no longer forced to move in with their children or becoming an economic burden on younger generations. It has also averted homelessness and poverty and has greatly improved the mental and physical health of our nation's aged population.

But I know to you it's just been another example of government illegally putting its hands into people's pockets...or something...so I'll stop wasting my time arguing the point.

RedNeckRaider
05-16-2011, 03:05 PM
Madoff committed theft and fraud. The Social Security system is not opaque, nor is how it operates any kind of secret.

To qualify as a "ponzi scheme", you must have the fraudulent theft. SS therefore isn't a ponzi scheme.

If you want to say SS is a striaght up redistribution of wealth scheme from current workers to former workers, there I agree with. If you want to argue that it is unsustainable going forward in the same manner in which it has historically operated, as a result of changing demographics, then I think that is absolutely undeniable.

But spare me the Madoff, ponzi scheme rhetoric.

What is it other than a contract where out right deception and theft occurred?

orange
05-16-2011, 03:26 PM
What is it other than a contract where out right deception and theft occurred?

What "outright deception and theft" has occurred? Has someone been denied a payment that they're due?

RedNeckRaider
05-16-2011, 03:31 PM
What "outright deception and theft" has occurred? Has someone been denied a payment that they're due?

No but it is broke and the money is gone and payments are being made on credit. So save the honor bullshit~

Hydrae
05-16-2011, 03:31 PM
It's neither guaranteed nor a crock. Far from a crock, it has in fact been one of the most amazingly successful governmental programs ever, recasting society so that the elderly are no longer forced to move in with their children or becoming an economic burden on younger generations. It has also averted homelessness and poverty and has greatly improved the mental and physical health of our nation's aged population.

But I know to you it's just been another example of government illegally putting its hands into people's pockets...or something...so I'll stop wasting my time arguing the point.

Yeah, right. You keep believing that. Escpecially the economic burden part right after you mention that it is a redistribution of money from the young to the old.

|Zach|
05-16-2011, 03:33 PM
What is it other than a contract where out right deception and theft occurred?

What "outright deception and theft" has occurred? Has someone been denied a payment that they're due?

No but...

lol. I love this place.

Amnorix
05-16-2011, 03:37 PM
Yeah, right. You keep believing that. Escpecially the economic burden part right after you mention that it is a redistribution of money from the young to the old.

A burden spread across the entire workforce, rather than onto the specific shoulders of their children.

I'm literally amazed that more people here didn't have parents who would've been forced to live with them absent social security, completely messing up their lives. Right up until they couldn't care for them anymore, of course, at which point they go into a nursing home (driving the family into bankruptcy, ptoentially) or need round-the-clock care at home which means the kid(s) and their spouse(s) need to revamp everything to care for the ill and elderly parent.

And that burden would have indirect costs across the ecnomy as well, driving potentially productive workers out of the workforce, etc.

RedNeckRaider
05-16-2011, 05:04 PM
lol. I love this place.

LMAO on cue the chubby kid makes a snipe~

|Zach|
05-16-2011, 05:22 PM
LMAO on cue the chubby kid makes a snipe~

Watching people talk in ridiculous hyperbole and then immediately take it back is funny.

Simplex3
05-16-2011, 05:34 PM
It's neither guaranteed nor a crock. Far from a crock, it has in fact been one of the most amazingly successful governmental programs ever, recasting society so that the elderly are no longer forced to move in with their children or becoming an economic burden on younger generations. It has also averted homelessness and poverty and has greatly improved the mental and physical health of our nation's aged population.

But I know to you it's just been another example of government illegally putting its hands into people's pockets...or something...so I'll stop wasting my time arguing the point.

Uh, it's *exactly* making the elderly a burden on younger generations, and in fact encourages it because it isn't becoming a burden to your own relatives, but rather you're a burden to "the government". Even by your own description. And are we really better off because we warehouse seniors instead of having them live with relatives?

RedNeckRaider
05-16-2011, 06:46 PM
Watching people talk in ridiculous hyperbole and then immediately take it back is funny.

So you are saying SS is not broke lol idiot~

|Zach|
05-17-2011, 12:17 AM
So you are saying SS is not broke lol idiot~

Actually, I am laughing at you saying this "What is it other than a contract where out right deception and theft occurred?" like a drama queen and then not even trying to back it up when you were asked about it.

It seemed pretty clear to me but if you need me to go over anything else I am here for you.

RedNeckRaider
05-17-2011, 05:32 AM
Actually, I am laughing at you saying this "What is it other than a contract where out right deception and theft occurred?" like a drama queen and then not even trying to back it up when you were asked about it.

It seemed pretty clear to me but if you need me to go over anything else I am here for you.
1935: Social Security was created as a retirement "trust fund" That would be the contract. We were told we would be reimbursed upon retirement. This is the deception because of mismanagement, and our incompetent Government borrowing billions from it knowing with the debt out of control they will never be able to repay. The program is unsustainable. That would be the theft. I assure you I do not need your assistance to go over anything, less taking pictures or making snide little remarks and I have no interest in either~

InChiefsHell
05-17-2011, 06:15 AM
Uh, it's *exactly* making the elderly a burden on younger generations, and in fact encourages it because it isn't becoming a burden to your own relatives, but rather you're a burden to "the government". Even by your own description. And are we really better off because we warehouse seniors instead of having them live with relatives?

Pretty much beat me to it. How is this NOT being a burden? And by the way, where is it written that we are not to be "burdened" with our parents? Shit, it's one of the oldest rules of humanity...you need to take care of your parents in their old age. But no, the gubment will do that for you...don't worry about mom and dad...they'll be fine inside the system...

notorious
05-17-2011, 06:46 AM
Of course SS hasn't missed a payment, yet.

But, it is like paying a credit card payment with another credit card.


Sure, you may not miss a payment for now, but eventually it will catch up.

RedNeckRaider
05-17-2011, 06:48 AM
Of course SS hasn't missed a payment, yet.

But, it is like paying a credit card payment with another credit card.


Sure, you may not miss a payment for now, but eventually it will catch up.

Pretty much~

Cave Johnson
05-17-2011, 10:51 AM
"The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns," - Ronald Reagan, urging a raise in the debt ceiling in 1983.

Simplex3
05-17-2011, 12:15 PM
Does anyone in Washington realize there are two ways to solve this problem? Sure, one is to raise the debt ceiling, but there's this magical second option where you quit spending money you don't have.

InChiefsHell
05-17-2011, 12:32 PM
"The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns," - Ronald Reagan, urging a raise in the debt ceiling in 1983.

Yeah...Reagan was not totally right about that, but can't you see that times have changed and things are even more dire now than they were then? In other words, that was then, this is now. What ever happened to "change"...

RedNeckRaider
05-18-2011, 09:24 AM
1935: Social Security was created as a retirement "trust fund" That would be the contract. We were told we would be reimbursed upon retirement. This is the deception because of mismanagement, and our incompetent Government borrowing billions from it knowing with the debt out of control they will never be able to repay. The program is unsustainable. That would be the theft. I assure you I do not need your assistance to go over anything, less taking pictures or making snide little remarks and I have no interest in either~

Gee Zack no snide response?

Edit: Billions was a huge miss on my part. Most have the number closer to 2.4 trillion~

|Zach|
05-18-2011, 05:55 PM
Gee Zack no snide response?

Edit: Billions was a huge miss on my part. Most have the number closer to 2.4 trillion~

Oh you think you showed deception and theft there?

LMAO

Are you trying to claim victory?

Adorable.

Don't even know why any of this is directed at me. I know I get under your skin but you are the one that made a point and then immediately backed away from it.

RedNeckRaider
05-18-2011, 06:02 PM
Oh you think you showed deception and theft there?

LMAO

Are you trying to claim victory?

Adorable.

Don't even know why any of this is directed at me. I know I get under your skin but you are the one that made a point and then immediately backed away from it.

LMAO You know exactly why it was pointed at you. Nice reply :rolleyes: You get under my skin because you are as shallow as a tear drop with little to offer. I guess as much as I could expect from an Owen Mills employee~

|Zach|
05-18-2011, 06:05 PM
LMAO You know exactly why it was pointed at you. Nice reply :rolleyes: You get under my skin because you are as shallow as a tear drop with little to offer. I guess as much as I could expect from an Owen Mills employee~

Employee? I don't have a boss.

BucEyedPea
05-18-2011, 06:09 PM
LMAO You know exactly why it was pointed at you. Nice reply :rolleyes: You get under my skin because you are as shallow as a tear drop with little to offer. I guess as much as I could expect from an Owen Mills employee~

Little to offer is the size of it 'cept snide comments.

|Zach|
05-18-2011, 06:11 PM
Oh hey, the chick who thinks Obama is a neocon agrees with you.

....so you have that going for you.

RedNeckRaider
05-18-2011, 06:20 PM
Employee? I don't have a boss.

LMAO yeah you run the show at whatever walmart or mall you work at. Hurry along and put on your clown nose and goo goo to the little kids...got to make them smile for the picture. I have to admit years ago when I could not afford better I had the wife and kids pose for one of your Owen Mills pictures. I would be lying if I said you chubby guys dancing aound with your clown nose was not a little funny~

|Zach|
05-18-2011, 06:21 PM
LMAO yeah you run the show at whatever walmart or mall you work at. Hurry along and put on your clown nose and goo goo to the little kids...got to make them smile for the picture. I have to admit years ago when I could not afford better I had the wife and kids pose for one of your Owen Mills pictures. I would be lying if I said you chubby guys dancing aound with your clown nose was not a little funny~

So...when I talk about being a photographer and owning my own studio and business you think I am a liar?

RedNeckRaider
05-18-2011, 06:25 PM
So...when I talk about being a photographer and owning my own studio and business you think I am a liar?

Keep the dream alive bro the clown nose is just a part of the gig LMAO

|Zach|
05-18-2011, 06:28 PM
Keep the dream alive bro the clown nose is just a part of the gig LMAO

Wow. LMAO

Sort of disappointed. With a few strokes of your keyboard the wedding I did in Mexico never happened...neither did the magazine covers or sports work or anything.

Brutal.

RedNeckRaider
05-18-2011, 07:14 PM
Wow. LMAO

Sort of disappointed. With a few strokes of your keyboard the wedding I did in Mexico never happened...neither did the magazine covers or sports work or anything.

Brutal.

There is a Walmart in Mexico :hmmm:

|Zach|
05-18-2011, 07:35 PM
There is a Walmart in Mexico :hmmm:

Not sure. I am sure there is this.
http://a1.sphotos.ak.fbcdn.net/hphotos-ak-ash4/189253_768071985764_34305085_41558679_7782602_n.jpg

http://a8.sphotos.ak.fbcdn.net/hphotos-ak-ash4/230936_851596776414_34305085_41932122_5445005_n.jpg

http://a2.sphotos.ak.fbcdn.net/hphotos-ak-snc6/188839_768251725564_34305085_41561003_3167640_n.jpg

RedNeckRaider
05-18-2011, 08:12 PM
LMAO Outstanding I have been on here for quite awhile and am well aware you don't work for Owen Mills. You are a condescending jerk who portrays the ultra confident cool guy, yet you scrambled to validate yourself to me. I was just giving you some of your own medicine. Thanks for the chuckles. Oh FWIW from what I have seen you are good at your job~

|Zach|
05-18-2011, 08:25 PM
LMAO Outstanding I have been on here for quite awhile and am well aware you don't work for Owen Mills. You are a condescending jerk who portrays the ultra confident cool guy, yet you scrambled to validate yourself to me. I was just giving you some of your own medicine. Thanks for the chuckles. Oh FWIW from what I have seen you are good at your job~

I think you overestimate how easy it was to make you look like an idiot. You have been reduced to trying to make points...backing from them...jokes about how someone looks and playing dumb.

Quite the impression you have built up. LMAO

RedNeckRaider
05-18-2011, 08:30 PM
I think you overestimate how easy it was to make you look like an idiot. You have been reduced to trying to make points...backing from them...jokes about how someone looks and playing dumb.

Quite the impression you have built up. LMAO

Whatever makes you world work Zack lol~

|Zach|
05-18-2011, 08:31 PM
Whatever makes you world work Zack lol~

My world? It is all in the thread.

InChiefsHell
05-19-2011, 02:37 PM
This has been another stupid "you suck, no YOU suck" conversation...yet strangely I want a beer and chips, so it wasn't a total loss...

BucEyedPea
05-19-2011, 04:23 PM
This has been another stupid "you suck, no YOU suck" conversation...yet strangely I want a beer and chips, so it wasn't a total loss...

Wherever Zach goes this is what you'll find if someone falls into his trap to play his game.

BIG_DADDY
05-19-2011, 11:55 PM
The fiscal state of the US Federal Government is a ****ing joke. They are borrowing from pensions as of today to cover their asses. Raping Social Security with IOUs wasn't enough, now it's private accounts. YEEHAW!!!!!

LMAO SS was bad but Federal pensions is a pot that needed a good raping. YEEHAW indeed.

BucEyedPea
05-20-2011, 01:14 AM
LMAO SS was bad but Federal pensions is a pot that needed a good raping. YEEHAW indeed.

Careful what you wish as it could be private ones next. Our govt is rapacious.

Garcia Bronco
05-20-2011, 07:29 AM
Careful what you wish as it could be private ones next. Our govt is rapacious.

They can't do that. It would crash the market.

Lets say I am the Government and I tell you starting next tuesday I will tqke 40 percent of your 401k, a, and any flavor of IRA. What are you going to do? Yank it all out.

Stewie
05-20-2011, 01:37 PM
A great read from the iconic Martin Armstrong. A world class economist and historian.

http://www.martinarmstrong.org/files/What%20Destroyed%20Rome%2005-18-2011.pdf

Stewie
05-20-2011, 02:19 PM
Bank failures since the beginning of this year continued to provide evidence of three realities observed consistently in the past:

(1) the reported value of the banks’ assets turned out to be greatly exaggerated upon failure, when these assets had to be assigned a more realistic, dissolution value;

(2) the true market value of the failed banks’ assets was determined to be so questionable that in order to get the acquiring banks to take these assets over, the FDIC was forced to enter into extensive loss-sharing agreements guaranteeing their value; and

(3) the pace at which the FDIC closed insolvent institutions continued to be too slow to reduce the huge backlog of troubled institutions operating throughout the Country and instead, caused that backlog to increase significantly.

All these observed trends lend support to the key message we hear frequently, that there is no alternative to the practice of “Quantitative Easing to infinity” being practiced by the Federal Government. The U.S. banking system is far too fragile to survive any significant reduction of liquidity.

Figures So Far In 2011
So far this year, the FDIC has closed a total of 40 banks. Collectively, these banks had assets represented to be worth $17.1 billion and deposits of $15.1 billion. The FDIC estimates these failures will cost $3.2 billion, about 21% of deposits.

Perspective On Over-Valuations
Based on the FDIC’s loss estimates, the actual value of the 40 failed banks’ assets was not $17.1 billion, as reported, but about $11.9 billion. Collectively, bank management had over-stated asset values by about $5.2 billion, or 43%.

As always, there were specific examples of overvaluations that dwarfed the averages.

Community Central Bank of Mount Clemens, MI (closed 4/29/11) had reported assets of 476.3 million and deposits of 385.4 million. The FDIC estimated its closing cost $183.2 million. Based on that estimate, the bank’s assets were really only worth $202.2 million, and had been over-valued by 136%.

The First National Bank of Davis, Davis, OK (closed 3/11/11) had reported assets of $90.2 million and deposits of $68.3 million. The FDIC estimated its closing cost $26.5 million. Based on that estimate, the bank’s assets were really only worth $41.8 million, and had been over-valued by 116%.

First State Bank of Camargo, OK (closed 1/28/11) had reported assets of $43.5 million and deposits of $40.3 million. The FDIC estimated its closing cost $20.1 million. Based on that estimate, the bank’s assets were really only worth $20.2 million, and had been over-valued by 115%.

San Luis Trust Bank, FSB, San Luis Obispo, CA (closed 2/18/11) had reported assets of $332.6 million and deposits of $272.2 million. The FDIC estimated its closing cost $96.1 million. Based on that estimate, the bank’s assets were really only worth $176.1 million, and had been over-valued by 89%.

Finally, Park Avenue Bank of Valdosta, GA (closed 4/29/11) had reported assets of $953.3 million and deposits of $827.7 million. The FDIC estimated its closing cost $306.1million. Based on that estimate, the bank’s assets were really only worth $521.6 million, and had been over-valued by 83%.

The extent of these overvaluations suggests that throughout the country, banks’ least liquid assets are being valued at amounts that greatly exceed the amount they could realistically be sold for in the open market. Such is the inevitable result of the Financial Accounting Standards Board (“FASB”)’s abandoning fair value accounting standards in April 2009.

Extent of FDIC Loss-Sharing Agreements
Of the 40 bank closings so far this year, the FDIC accomplished 27 by entering into loss-sharing agreements covering a high percentage of the assets taken over by the acquiring banks. To be more precise, in these 27 cases the acquiring banks took over a total of about $12.7 billion of the failed banks’ assets, and the FDIC entered into loss-sharing agreements covering $8.3 billion of those assets – approximately 65%.

This brings to about $199 billion the total value of assets the FDIC has agreed to guarantee under loss-sharing agreements between 2008 and the present. The FDIC has, in effect, placed a floor under the value of $199 billion of failed banks’ assets for a period of ten years from the date of failure.

Growth In Troubled Banks Despite Closings
Over the past 12 months, there has been a very significant reduction in both the pace at which the FDIC has been closing banks and the asset size of those banks being closed. For example, in the four months between January 1, 2010 and April 30, 2010, the FDIC closed 64 banks with reported total assets of $61.84 billion –about $966 million per bank (on average). During the same period this year, the FDIC closed only 39 banks with reported total assets of $16.97 billion –about $435 million per bank (on average).

This slowing in bank closings could be interpreted as evidence of a recovery in the banking sector and the economy as a whole. However, there is a great deal of evidence to suggest it is more likely an exercise in Manipulation of Perspective Economics.

The pace at which the FDIC is resolving bank failures is not reducing the backlog of institutions operating without sufficient capital, but causing it to grow. Based on FDIC reports of enforcement actions, it is clear that each month, many more banks are newly being recognized as undercapitalized than are recovering or being closed.

Further proof of this is found in FDIC announcements regarding its list of Problem Banks, which are banks rated by examiners as having very low capital cushions against risk. As of the first quarter of 2010, there were 775 institutions on the Problem List. By the last quarter of 2010, that number had grown to 884.

It is difficult to say why the asset size of institutions being closed has decreased so dramatically because the FDIC does not release detailed information on the banks it considers troubled. The inviting conclusion is that while the market for failed bank assets remains so poor, the FDIC is trying to get rid of the smaller problems first. As it stands, in each failure of significant size the FDIC has been forced to enter into loss-sharing agreements guaranteeing two-thirds or more of the value of the assets taken over.

Conclusions
In summary, it would be dangerous to assume there has been any significant improvement in the banking sector over the past several years. There remains ample evidence of radical over-valuation of bank assets. Absent some $200 billion in FDIC loss-sharing agreements, there is no question the recognized value of those assets would have plunged even further.

Finally, the number of troubled banks operating in this Country continues to grow significantly. This reduces the prospects for increases in the kind of lending needed to spur economic growth, and guarantees no end to the Federal Government’s programs of Quantitative Easing to Infinity.

BucEyedPea
05-20-2011, 02:27 PM
A great read from the iconic Martin Armstrong. A world class economist and historian.

http://www.martinarmstrong.org/files/What%20Destroyed%20Rome%2005-18-2011.pdf

I've only started on the first page and so far I'm lovin' it!