2 + 2 = 7

Bloomberg reports that consumer spending is increasing, savings are increasing, unemployment is increasing and people are more confident. I am shaking my head and scratching things. Let us do the math again on this one. Unemployment up, so less jobs and less income. Spending up, which is not due to a good jobs picture. Savings up, same story. Confidence up - based on what I must ask. This is all stimulus effects, i.e. us spending/saving money that our government borrowed for us. Yes, this spells recovery in my book. I am a happy guy now.

http://www.bloomberg.com/apps/news?pid=20601087&sid=an7UdA7Bo8xg

Come on people, we cannot borrow more money and create more debt to end a debt created bubble. It ain't gonna' work. Get with the program. More debt does not solve a problem due to too much debt - period! Yet that is our solution. Did I mention I am disappointed in the new Prez on the financial front? Not so much so otherwise but on the financial issues he is definitely listening to the wrong buffoons.

I hate to keep repeating myself, but let us go through it one more time:

• U.S. debt levels, as a percentage of GDP (which means it is gaged properly to past debt levels) continues to be at or near record levels;
• Housing prices are down drastically around the country and that equity was a common piggy bank;
• Unemployment is pushing on double digits nationally, and already there in many states; and
• The rest of the world is also sucking wind.

So this looks like a good time to be confident - to believe government stimulus dollars have fixed it all. Pardon me if I wait on he sidelines.

I hope to add more over the weekend; it has been a very taxing week.

Disclosures: None.

41, 42, 43, 44 and 45 - Five Banks Down This Week

The FDIC was busy this week. Five banks down in one week - impressive. CRE is taking a serious dive, private mortgages - especially prime - are worsening, and other factors are hitting local and regional banks very hard. We are approaching a rate of two a week. Now rate wise this is nothing like the S&L crisis but dollar wise - if you include some banks that had to be bought (with government strong-arming) then we are beating out the S&L crisis.

http://www.calculatedriskblog.com/2009/06/bank-failure-45-mirae-bank-california.html
http://www.bloomberg.com/apps/news?pid=20601087&sid=af_dnRBsbs.c