Still in my Cave

I am still off living in my cave until the markets show some semblance of rationality. Not happening just yet. Fortunately this cave has wireless and I can connect. And there is some stuff out there worth reporting. Let's start with banks going down. It is, after all, Friday, and 93 and 94 are going down this week. I am only surprised there are not more. There will be in future Fridays.

http://www.calculatedriskblog.com/2009/09/bank-failures-93-94-irwin-union-bank.html

I say that there will be many more going forward as commercial real estate is starting to cause some major issues on bank balance sheets, in addition to residential subprime, Alt-A, credit card, auto and other loans. Basically, any loan out there taken out in the past few years is causing banks some pain and, as the linked article notes, some banks have bent over backwards to keep these non-performing loans from hitting their books. Nonetheless, in time reality will set in and people will realize that we are not out of the woods yet. Alt-A and commercial loans especially will be problematic over the next year or two.

http://www.nakedcapitalism.com/2009/09/wells-commercial-real-estate-ticking-time-bomb-and-coming-cre-woes.html

I link the next post because it includes a lot of links to blogs by top economists.

http://www.nakedcapitalism.com/2009/09/guest-post-are-financial-blogs-trustworthy.html

I am not thereby agreeing with these economists, but as the link notes, it may be better to read what is written by the experts than to read what is written by the mainstream press. Let me give you an example. My wife recently sent me a link to a video on the swine flu vaccine. The video was of some reporter interviewing another reporter for three minutes on the safety of the vaccine out for the swine flu. I am familiar with some of the science here and knew right away this guy was a quack. In any event, having one reporter interview another reporter is not news or reliable. I quickly did some research and was able to respond to my wife that her video was worthless, which I knew from my own knowledge to begin with. Still, many people probably bought the load of bull this guy had to sell and, unfortunately, some kids may die because their parents saw this video and will not get their kids vaccinated. Following mainstream press has some severe consequences. Bottom line, you have to do your homework and not believe what the mainstream press tells you. By the way, do not get your kids vaccinated on my say, do your own research. I am just saying this guy was not well informed and selling a bunch of bull without any good support.

Disclosures: None.