Why Depression2 is More Significant than Depression1

I know that MSM is not calling our current economic situation a Depression, but we have been in a depression since at least mid-2008.  In fact, I would argue that this depression is far worse than the first by a number of indicators.  However, I think the one indicator that is most telling is the bank failures.  However, it is not just the fact that 185 banks have fallen since 2008, nor is it the fact that compared to the first depression, the term “bank” must be defined differently.  By that, I mean, those who wish to blow smoke up you know where, they look at raw numbers and say.. “Well we had a lot more banks fail between 1929 and 1934, so you really can’t say this recession is a depression”.

BS. If you look at the number of banks that have failed since 2008 and you look at their sizes and the number of branches and assets they represent, D2 is far worse than D1.  But even that under reported fact is not the issue I wish to point out in today’s article.

When you analyze the banks that are currently failing, no one hardly pays attention to the question of when these failed banks were established.  Why is that important you ask?  Well, a significant number of banks that are currently failing and are closed were established before D1 and they had survived the first depression.  Here are some examples:

1st National Bank of Danville Ill. Was closed in July 2009.  This bank was established in 1857. George Washington Savings Bank of Orland Park, Ill. failed February 19th this year and was established in 1890.  Consumer Bank and Trust of Cornelia, Ga. failed on the 19th of February this year and was established in 1900.  Here’s a complete list that is well maintained by the Wall Street Journal :

http://s.wsj.net/public/resources/documents/info-Failed_Banks-sort.html

In fact 38 of the 185 banks that have failed since January 2008 were established BEFORE 1925.  That is nearly 20%of the current bank failures have been with banks that had weathered the first depression, but couldn’t survive this “deep recession”.

What we need to ask ourselves is why?  Were these banks poorly managed or where they manipulated into a position of failure?  Everyone should be paying very close attention to the legal actions being taken over the failure of Washington Mutual, which BTW was established in 1889.

The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. WaMu’s loan portfolio contained more than $57 billion in adjustable-rate mortgages or Option-ARM loans. The complaint further alleges that the Company failed to disclose: (i) that it had far greater exposure to anticipated losses and defaults in its home loan portfolio, particularly with Option-ARMs, than it had previously disclosed; (ii) that defendants’ Class Period statements about the Company undertaking significant preparations and implementing defensive measures to weather the increasingly difficult credit and housing markets were patently false; (iii) that defendants had engaged in a conspiracy and scheme to inflate the appraisal value of homes with the intent to artificially increase the estimated loan-to-value ratio of its Option-ARM portfolio; and (iv) that due to the Company’s improper appraisal practices, the mortgages it had issued were much riskier than represented.

According to the complaint, on October 17, 2007, after the market closed, WaMu stunned investors by disclosing that it had suffered a 72% drop in third quarter of 2007 net income and would have to set aside up to $1.3 billion in the fourth quarter of 2007 to cover its loan losses. On this news, WaMu’s stock dropped from $33.07 per share to as low as $30 per share, closing at $30.52 per share on October 18, 2007 on volume of more than 36 million shares. Then, on November 1, 2007, News York’s Attorney General issued a press release announcing that a lawsuit was filed against First American Corporation and eAppraiseIT, alleging that they conspired with Washington Mutual to inflate Real Estate appraisals. Following this disclosure, WaMu’s stock dropped to as low as $23.59 per share before closing at $23.81 per share, on volume of 31 million shares.

On October 21, 2008, the lead plaintiff filed a Consolidated Class Action Complaint adding additional defendants as well as additional claims pursuant to the Securities Act.

On May 15, 2009, an Order On Defendants’ Motions To Dismiss was granted in part and denied in part.

On October 27, 2009, various orders granting in part and denying in part Motions to Dismiss were issued by the court in this matter.

On December 15, 2009, two separate amended complaints were filed by Plaintiff City of San Buenaventura and Plaintiff Lou Solton, Monterey County Treasurer against the defendants in this action.

Subsequently, on December 18, 2009, an Order of Consolidation was granted by the court which established the two cases be maintained in one file under Lead Case No. C09- 664.

But wait there is more.  By some accounts J.P. Morgan Chase manipulated the FED in closing down WAMU prematurely and in fact had “inside help” in WAMU to convince the FED to act.  This is one of the banks that is “too big to fail”.  None of this is conjecture.  It is all facts.

What this is represents in the on-going roll out of the United States of Mega Corporations. I will restate I am not some conspiracy nut.  I am just blessed enough to be fully awake.  I am presenting facts that are not being covered in MSM because the PTB don’t want you to know about this and they certainly don’t want you to act in any “uncontrolled” manner.  As always, please do not take my word for anything, but do get involved.  Do your own research.  Form your own opinions and most importantly exercise your free will.  The PTB are pushing us to a point where they calculate we will revolt, which in turn will give them an excuse to declare martial law and strip us of last vestiges of our rights and our freedom.  Taking all of our money certainly would cause us to panic and rage. This is what we have to avoid at all cost.  We must act before that and in a civil peaceful democratic manner.  The PTB know they have no contingencies to deal with an informed public that exercise their free will in the political process.

Banking Implosion and Other Follow-ups

I have written on several occasions concerning my fears of the banking system collapse.  Three more banks failed this week bringing the total number of branches closed near the 4,000 mark.  These continued bank failures are occurring at even a faster rate than I anticipated.  FDIC payouts have exceeded $55 billion already.  I had anticipated a collapse of FDIC in January or February, but it is looking like that may occur sooner, much sooner.

When you combine this information with other things floating out there, it is really looking gloomy.  This week, the president of the World Bank says it will be out of funding for under developed countries and businesses with 12 months.  The recent G20 conference refused to discuss the currency instabilities, and finally next weeks Treasury T-Bill auction will not be attended by its biggest customer, China.

All of these events are pointing to an imminent collapse of the entire banking system internationally, starting with the collapse of the US system.  I think some of these dire predictions will start floating up from the “banking community”  itself starting as early as next week.  The predictive linguistics which I am monitoring is suggesting a seminal event on the the 25th of October.  This is doubly interesting, since that is also the date that seems to be the start of some type of military action against Iran.  What does it all mean?  I have no idea really, except to say that the ACTUAL events that are unfolding seem to not only support our earlier predictions and forecast, they seem to be unfolding at an accelerated rate.

In other events, we had said to expect some type of unexpected storm event in the SE during the week of the 14th of September, and indeed we did have signifcant rain events in the southeast, but in retrospect, it seems that SE may have meant SE Asia.  A series of typhoons have devastated a number of SE Pacific islands including the Philippines causing several hundred deaths and billions in property damage.  These events point out the difficulties of working with predictive linguistics.  The info is usually very accurate, but how we interpret that information is where this is not yet a science.

On another note, we have talked in the past about the potential of a planet X or Nibiru approaching and also the fact that we are fast approaching the point of passage of our solar system through the galactic plane.  Our concern here was the earth being bombarded by massive cosmic energies, including massive influences on our magnetosphere.  Well sure enough, it seems “something” is really screwing with the magnetosphere of earth. (see below)

magnetosphereIt seems strangely odd that no one in MSM reported this event.  What ever slammed us literally turned the magnetic field that protects us from destructive cosmic energy and radiation into itself.  It is also curious that this event happened at the very same time the swarm of 6+ earthquakes rocked the South Pacific and Indonesia.  What was not surprising was to hear that this week we are experiencing swarms of quakes in Central California and a volcano erupting in the Aleutian Islands.  Whenever you push on a plate as violently as to create a 8.0 quake on one side you will have an equal response on the other side.  But the most shocking event is how the USGS, Cal Tech, and others are downplaying these events, and even calling them NORMAL!  How do they do that with such a straight face.  If I lived in Central or Southern California, I think I would make a good check of my things to make sure they are battened down. Chances are there is going to be a whole lot of shakin’ going on in the next few weeks.

As we move forward, it seems that the things I have come to believe will happen, are happening.  The feeling is beyond sobering.  The new series FLASH FORWARD has debuted and I think it is curiously relevant.  If you have not caught it yet, basically the whole world’s population went unconscious at exactly the same time for 2 minutes and 17 seconds, and when everyone wakes up, they have all experienced dreams of future events.  Why no one knows yet, but it does bring to focus an interesting dynamic and question.  If you could see your future, including your death, would you want to see it?  In my case, I was interested in understanding my reality as much as I could to understand my role and direction in it.  That was the force what motivated me initially.  Now, however, I am deep in the rabbit hole and am not really comfortable with what I have come to know.  On one hand, I am more prepared for the “unexpected”, but having the pre-knowledge and then actually seeing it unfold in the accurately specific ways as I saw it is somewhat spooky.

One thing remains to give me peace.  It is the nature of us.  Humans have this great capacity to survive.  We also are capable of great compassion and sense of tribe, especially when we are tried.  We, in the whole, will survive and I am convinced we have a great and fantastic future.  Take a moment, especially with the ones you love the most, to tell them how much they really mean to you.  Take a moment to re-enforce a sense of family and community.  Something tells me we really need to do that right now.

Anyway here is Uncle Willie’s thoughts for the day.

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The Signs are Consistent. Pay Close Attention Now.

Several blogs back I wrote a piece concerning the parallels between the Crash of 29 and now as it related to bank closures.  In that piece I had calculated that the FDIC would go broke by January 2010.  Look surprised now, today, the FDIC said at the current rate of closures it would be broke by JANUARY!

But what is more troubling is the fact they, the FDIC, also increased their list of troubled banks from 315 banks to 400 banks.  This last week we had several more failures including the third largest bank going down in this crisis, which brings the total number of branches closed very close to 3700. Remember the Crash of 29 was 4,000 total. Oh, BTW, the assets of that bank that went down last week, were sold to a Spanish bank.  So the US banking crisis is creating shopping opportunities for foreign investors.  Is that good?  Yeah, it must be or the FDIC wouldn’t do it, right?

Now comes the really insane part. AIG’s stock rose more than 214% in August ALONE!  Let me get this straight, AIG, in an economy that is in a nose dive, hits the government (read us here) for $150B, and then magically they DOUBLE their money in ONE month.  H.S. they are good!  For me it is more like “I don’t know about you sheriff, but something mighty fishy is going on here”.  How about you?

With the market being artificially pushed by all the happy talk, and the Fed printing money faster than hummingbirds can beat their wings, I think the Bank Holiday ought to come crashing in on us about say… two weeks before Christmas.  Merry Christmas!

The real signs of economic turn around just aren’t in the cards folks.  Imports and exports continue to contract, oil prices are reflecting a flat and still contracting economy, and the stimulus money simply isn’t reaching the street.  This coupled with the fact Real GDP decreased 1% for the second quarter of 2009 just doesn’t support any real turn around yet.  You have to understand that the GDP number is from one month to the next.  Real GDP had decreased more than 4.5% in the first quarter of 2009.  The “Cash for Clunkers” program may have reduced car inventories and removed some gas guzzlers from the highway, but it will be considered in a few months as a complete disaster because the government, in its slow pay method, has already cash strapped a lot of car dealers and sales will be absolutely flat for the next quarter.  Watch how Ford does in this aftermath.  Ford is now the canary in the mine.

I hope you are also watching how states are coping with this depression.  California has cut $1.2B from its K-12 educational program and Washington State has hacked $800M from the same budgets..the results are monster size classrooms and teacher strikes everywhere.  In Washington State, 5 districts are already or prepared to go on strike.  In California, unemployment in some counties, like Imperial County, for example, is more than 30%.  One of the hardest hit employers was the prison system, a primary employer in the county.  Some estimates say California will release more than 27,000 prisoners.

It has been a few months now since the predictive linguistics and other data points have converged on this and these recent events only re-enforce the correctness of these indicators.  Pay close attention now as events unfold as we are very close to some dramatic events occuring.  Be sure to have your runnin’ money, a few vittles stashed away, and some good water source.  If’n you do you can sit back and watch the OMG show for the next few months.  If you don’t know the OMG show, it is where every time you turn on the news you go OMG!

Here’s Uncle Willie’s thoughts for the day.

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More Green Shoots? Only 180 Days Left Before The Banking Holidays!

The FDIC announced the closure of another 5 banks this week, bringing the total to 69 this year so far.  See the chart below to put this in perspective.  Given that the FDIC said there are still another 305 banks in “troubled waters”, we can kind of present a scenario and a theory of things to come.  Being insane as I am, I can then estimate when the banking holiday begins!!  Looks right now like late January 2010.  Well you judge my logic.

bank failures

The chart above represents 3 failures in 2007, 25 in 2008, 69 so far in 2009, 120 projected total for 2009, and finally 215 failures are projected for 2010. So in this period, 358 banks will fail.  When comparing to 1929-1933, 4,000 banks had failed.  But unlike today, banks then didn’t have branches.  So when you look at this in today’s number and you use an average of 10 branches per bank of today, we can expect 3580 1929 adjusted numbers. We assume that of the existing FDIC indentified 305 troubled banks, 70% will fail, if consistent with current trends.

OK, now let’s again look at historical facts and compare them with the facts of today. On March 3, 1933, FDR declared a banking holiday.  You gotta love those holidays where everybody gets screwed.  The reason he closed the banks were that the existing banks (-4000) were getting clogged with commercial real estate foreclosures creating unsalable assets.  Ok let’s fast forward. MSM is leading stories that warn of the new crisis is what??? Commercial and Construction loans.  De J’Vue?

Today the FDIC announced it only has $13 Billion left in the FDIC Insurance Account.  Given the rate of bank failures and that the average bank closure is costing the FDIC about $250 Million that gives us a cross over the line date of the last week in January 2010.  Secondly, in the same release, the FDIC says it expects about $10 Billion in future costs.  However, when I do the calculations, the number is more like $89.5 Billion.  So the FDIC is not only light by January 2010, it is missing the correct planning number by at least 8 times!

So given all these FACTS, and being insane as I am, I will now say look for the banking holidays from January 15th to February 15th 2010.  Gee, I wonder if Hallmark will come up with a card?