Double Speak and the Economy
Bloomberg is reporting that the federal government has closed two more banks (both in Illinois). This brings the total closure of banks by the fed to 36 this year.
Banks are being closed at the fastest rate in fifteen years according to the report.
Authorities in the Obama administration keep contradicting themselves, insisting that the worst is over … and then add that the worst is yet to come. According to Bloomberg:
“We are now in the cleanup phase,” Bair said in a speech in Washington. “But to be honest, there’s still more pain to go.”
Blair seems incapable of making a non-contradictory statement. This kind of non sequitur is the gold standard of double speak coming out of Washington to “explain” the current economic situation.
What are the facts?
The FDIC insurance fund is down 64 percent from its peak at the start of the second quarter last year, reflecting the shutdown of 22 lenders from April through December. The agency voted 4-1 today to impose a fee of 5 cents per $100 of assets, excluding Tier 1 capital, backing away from a proposal of 20 cents per $100 of insured deposits. The FDIC estimates the fee will raise $5.6 billion, lifting the fund from its lowest level since 1994.
U.S. regulators conducted unprecedented stress tests on 19 of the biggest banks, concluding on May 7 that losses could reach $599.2 billion in the next two years under economic conditions that are worse than economists forecast.
Looks like the economy is getting better because it is getting worse. (Or is it getting worse because it is getting better?) Expect many more reports from the Obama administration confidently informing us that: worse is better and better is worse. And expect most of the MSM to report the “good news” with straight faces.