Two More Banks Down

No surprise here. Two more down. Perhaps a bit of surprise not more went under.

http://www.calculatedriskblog.com/2009/08/bank-failure-83-mainstreet-bank-forest.html

http://www.calculatedriskblog.com/2009/08/bank-failure-82-bradford-bank-baltimore.html

Disclosures: None.

Bloomberg is Bonkers

Bloomberg reports that U.S. consumers are about to bounce back to their old spending ways. Now you can take this two ways. First, they are right and we start adding again to massive amounts of U.S. debt and further the already extreme debt situation in this country. Temporary boost for the economy perhaps, but long term pain. Second, they are wrong and consumers continue to pay down debt and - but for clunker and first time homeowner stimulus packages of late - their spending does not revert to the old mean. They keep spending less and start saving. I truly hope for the latter. We do not need to create a new bubble. We do not need to add to debt. We do not need to prolong this pain any longer than necessary. It could take well over a decade to get us to a point where consumers can start to spend, versus save, in a prudent manner, but I for one hope we never go back to massive debt spending. I owe it to my kids.

If option one is happening, which Bloomberg seems to believe to be the case, then we are in for a perpetual cycle of one bubble after another with each leading to a worse recession/correction than the last. We need to break this cycle. The government is doing its best to prevent us from doing so. They are incurring public debt and giving it to the banks and us to spend so we can continue our evil ways. We need to resist this temptation. The future can be somewhat painful if we pay down debt and save or it can be disastorous if we go back to our over-spending ways as Bloomberg and the Government suggests we will or should. You decide. I just put my two year old son to bed a couple of hours ago and a few minutes ago looked in on the Angelic face of my daughter finally sleeping. I will be damned if I will spend money now I do not have to support an economy that needs massive further correction and pass off the buck to them. We got into this mess and our children and grandchildern should not be tasked with getting us out.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aFKj.8C.uteo

Disclosures: None.

No Cure For Cure Rates

Not a lot of time to post. Getting caught up on work after and extended weekend and out all day tomorrow. Nonetheless, I saw this piece on cure rates on mortgage delinquencies being in the dumper, as in getting worse, and I thought it was worth passing on. Another key point to the post is that it seems banks are not foreclosing on the delinquent at the rates they were a few months ago. This does not bode well for the future.

http://www.nakedcapitalism.com/2009/08/banks-sitting-on-bad-mortgages-and-they.html

Disclosures: None.