Monday, August 31, 2009

Still holding a Grudge

China has been buying 50% of commercial vehicles currently produced worldwide. Not to miss an opportunity GM will spend 300 million of your tax money for a 50% interest in a light truck factory in China. It’s not practical to export US built trucks to China since they have high import tariffs, no fools the Chinese.

Three hundred million sounds like a lot of money but the FDIC spent 416 million to clean up 3 more banks Friday. This was a bargain compared to the previous week when they spent 3.3 billion on four banks plus 1.3 billion listed on the report as uninsured that somebody had to eat and this doesn’t count stockholders that lose 100%.

There are 420 banks on FDIC list of likely failures, but real list is now at about 1800 exceeding the 1500 institutions that failed during the Republican S&L scandal of the eighties and nineties. Bank failures are expected to really pick up in the fall as commercial loans start to be written off but the really big surge will come next year as the trillion dollars in toxic assets will start to be accounted for.

Technically the FDIC doesn’t use tax dollars but since the reserves came from banks that just pass it along to customers who are they kidding? It isn’t assessed to bank executives or Republicans like it should be. The FDIC reserves are just about gone and the money will start coming right from the Treasury Dept. by the truck load.

Congress has allotted 500 billion for the FDIC to use which is almost equal to the Americorps budget. Here is a bit of history, FDR’s CCC boys were taken from starvation on the streets, were made fit, became accustomed to disciple and to working outside. After Dec. 7th they went straight into the infantry. Fascists like Beck still hold a grudge for FDR winning the war.