The Transfer of Risk from Wall Street to Main Street – How the Bailouts Shifted 3 Gigantic Risks from Wall Street in Housing, Banks, and Jobs to Average Americans.
There is a false security in our current economy. The belief that the current banking industry is now healthy simply because the government supports it is misguided in valuing the real risk inherent in back stopping Wall Street. Or the idea that deposits are safe up to $250,000 in commercial banks because the FDIC seal is on the door. Keep in mind the FDIC insurance fund is now insolvent. Or the notion that jobs are no longer needed for a recovery. This of course is all false. What has occurred under the veneer of stabilizing the banking sector is that the ultimate risk has now been transferred to the American taxpayer. It has already been made clear to Americans that no too big to fail bank will fail. Yet does this somehow fix the trillions in toxic assets that still remain? It doesn’t but what it does do is shifts the risk to the average American.
Banking and Housing Payments Devoured the Middle Class Income – 1 out of 10 Americans on Food Stamps and how the Fed Slowly Devalued the Dollars in your Wallet.
It is a challenge to say that things are getting better when every month that goes by more Americans are losing their jobs or needing to apply for food assistance. In the latest data for food assistance through SNAP we find that 200,000 more Americans were added to the program. That now brings the total number of Americans on food assistance to 38,183,000. 1 out of 10 Americans are receiving food assistance. For 2009 this cost the government $50 billion, up from $34 billion in 2008 and $30 billion in 2007. It should be no surprise then that average Americans are questioning the viability of a middle class in the upcoming decade.
The Devaluation and Fight for Survival of the American Middle Class – How Three Decades has Shifted the Concentration of Financial Wealth to the top 1 Percent.
The American middle class ideal is lionized around the world. It is the core of what has made this country great. The land of opportunity and endless wealth so long as people worked hard enough. It was an implicit contract workers made with this country. Well that vision is now quickly coming under attack by the corporate structure with banks being the main culprits leading the American middle class to the edge of financial ruin. The average American is looking at their current economy and wondering what ever happened to the security that was once provided to the “greatest generation†era. The Wall Street crowd after devouring their bailouts is telling Americans that this is simply how the market corrects. Yet at the same time, they are offering record bonuses to their elite. The same banking crowd that led this country to the financial edge is now rewarding itself with massive bonuses (taxpayer funded) while jobs are being lost and no industry is emerging to provide work to the middle class. As tough as it may be for many to swallow we are in a class warfare struggle. That is why you are seeing populist rage growing in both of our entrenchment political parties.
Stock Market Casino Royale – S&P 500 is overvalued by 100 Percent – Earnings do not Justify Current S&P 500 Levels. Financial Markets setting up for Another Correction.
When I look at the S&P 500 like most people do, you would expect that this wide cross-section of companies in the U.S. would reflect an accurate measure of the true health of industries in our economy. Yet the S&P 500 is fully disconnected from any historical measures of valuations. It is startling to see people talk about the wild swings in the stock market as if this were somehow standard in a regular market. The S&P 500 fell by a stunning 58 percent from the peak in summer of 2007 to the low in March of 2009. But from March of 2009 to February of 2010 the market has rocketed back up by 63 percent. This kind of massive market volatility is not indicative of a healthy stock market. This is a symptom of a system that is having a really hard time valuing assets since much of the toxic financial assets are still lurking in the murky black box of many financial institutions.