I want to keep my job. I want the economy to recover. But it doesn't help President Obama or the Democrats to cheerlead along a fake recovery: we are seeing a recovery from an economic meltdown, nothing more.
It doesn't take a genius to see that banks are still incredibly stressed due to rising unemployment (which is likely to reach 11-12% and banks are only capitalized per the "stress tests" for 8-9% unemployment and the subsequent foreclosures), banks are still holding their toxic assets from the residential real estate crash, and banks are now facing another meltdown in the commercial real estate market right when the economy should be starting to recover.
While many people are understandably trying to cheerlead this recovery, Republicans WANT another crash so that they can regain some power in the next election by blaming Democrats. Nevermind that repubs and their rich friends caused this crisis... If I thought it would work or help, I would cheerlead too. I just don't think it helps. Rather, we need accountability and removal from any power of the criminals that got America into this mess.
AP, 7/11/09
Japan's economy was paralyzed for a decade as banks failed to deal with their troubled loans. That's why it's nothing short of stunning to discover some U.S. banks are doing the same thing now.
Despite all the tough talk out of Washington and Wall Street about how the U.S. can't repeat what happened in Japan, the reality is that banks are granting extensions to borrowers in one key category, commercial real-estate loans, so they don't default. It's a bet that economic conditions will improve before the loans come due.
And it's not just the big banks that a commercial real estate meltdown would affect, it's mostly smaller banks who might have just barely escaped from the residential real estate crash:
And since commercial loans are such an important part of the portfolio of many small and midsized banks, it also could constrain their ability to make other new loans. An average of 20 percent of local and regional banks' loan exposure is in commercial real estate vs 4 percent for the nation's biggest banks, according to data from Deutsche Bank.
More:
Bloomberg, 7/9/09
The $3.5 trillion commercial real estate market is a ticking "time bomb" that may lead to a second wave of losses at large U.S. banks, congressional Joint Economic Committee Chairwoman Carolyn Maloney said.
About $700 billion in commercial mortgages will need to be refinanced before the end of 2010 and "doing nothing is not an option," Maloney, a New York Democrat, said at a committee hearing today. This "looming crisis" may lead to significant losses for banks, force shopping center and hotel owners into bankruptcy, and impede economic recovery, she said.
The response by banks to this "growing threat has been slow and inadequate," said James Helsel, a partner at RSR Realtors in Harrisburg, Pennsylvania, and treasurer for the National Association of Realtors. "The lack of liquidity and banks’ reluctance to extend lending are also becoming apparent in the increasing level of delinquent properties."
The rich are nothing without their paid hacks in Washington and they aren't going to allow another bailout because they want Democrats to get blamed for their causing this devastating world recession, maybe depression.
So things are still bleak folks. Let's not let people with nice chart-copying capabilities here or elsewhere in the new or old media trick you into thinking otherwise because those charts only show a recovery from an economic almost-armageddon.
Remember that America is still holding the bag for $50+ trillion in debt caused by the crooks on Wall Street so of course there's an uptick in market graphs after the nose-diving economy was saved with the bailouts.
So while Democrats are trying to govern, and yes many cheerleading a false recovery, Republicans are jockeying so that they can benefit politically from bad economic conditions (which is working per new polling in Ohio) and from for the likely double dip market crash so that they can blame it on Obama and the Democrats.
Americans need to go for the jugular of these financial crooks that have brought the world economic system to its knees.
We need to extremely aggressively hold accountable the Republicans who enabled these thieves, whether in criminal court or at the polls.
We need to stop cheerleading and start holding the crooks accountable.