Monday, September 27, 2010

"No End in Sight"

Every now and then there's an article that provides an honest glimpse into our financial future. Today in the Wall Street Journal: Banks Keep Failing, No End in Sight:
The largest number of bank failures in nearly 20 years has eliminated jobs, accelerated a drought in lending and left the industry's survivors with more power to squeeze customers.
The contraction represents an enduring threat to capital, lending and the economy. "When we step back and look at this financial disaster 10 years from now, the destruction of capital in our economy as a result of what we've endured will be the single greatest lasting impact on recovery and how the economy performs in the future."
The impact to the system has been "far more severe" than the savings-and-loan crisis. Not only were government rescue measures more sweeping and more global this time, the weakness in real estate continues to constrain economic growth. Since 2008, the industry's assets have shrunk by 4.5%.
And there's "no end in sight." As I've been saying for some time on the right sidebar, "a great deal of illusory capital is about to disappear."

1 comment:

Keith Wilson said...

Do you remember the book "Dow 36,000" a few years ago?

In our paper today, there is an article (and book) stating that the DOW will be 38,000 starting in the year 2017. That far-reaching future prediction is about as stupid as saying the winter of 2015 will have more snow fall.

And so it goes on our little planet...