Nope, I am not talking about Anita Dunn this time. Ron Bloom is the latest Obama Czar (Manufacturing) to quote Mao as an authority. And just wait to see which quote he uses from Mao. Oh, and he disses that whole free market thing, too. See for yourself:

You may recall that Ron Bloom was a negotiator with the United Steel Workers, and apparently known for being a bit of a potty mouth while he was at it. Oh, and naturally, like so many of the people with whom Obama surrounds himself, has ties to the SEIU, which was co-created by Wade Rathke of ACORN fame. Yep, he surely does.

Remarkable, isn’t it? When Obama keeps trying to claim he doesn’t know all that much about ACORN and their doings? Yeah, right. But I digress.

You know, it makes sense, though, really. As Obama takes over private enterprise as well as banks with our dollars (more on this below), and attempts to destroy any media that isn’t favorable to it, I think we are well on our way to an, um, less than Democratic union. And we have Czars like Anita Dunn and Ron Bloom to lead the way, not to mention Obama himself, a card-carrying member of the Socialist New Party (and don’t forget Van Jones, who had to resign). Ain’t that something?

Remember when our friends and families scoffed at us and ridiculed us for making these claims about Obama and his associates? Uh huh. Dontcha just HATE it when you know you’re right and people treat you like your nuts? I wonder how they feel now? Oh, right – they’re probably all singing their “Mmmm mmmm mmm” song while our once democratic nation goes by the boards…

By the way, the Bailout Watchdog had this to say about the TARP program – OUR taxpaying dollars at work:

But even as the administration aimed to refocus the massive Troubled Asset Relief Program on small businesses and homeowners, Barofsky said in his report that the effort to save the nation’s financial sector came at great cost to taxpayers, to the integrity of the financial system and to the public’s perception of the federal government.

“Despite the aspects of TARP that could reasonably be viewed as a substantial success,” he wrote, “Treasury’s actions in this regard have contributed to damage the credibility of the program and of the government itself, and the anger, cynicism and distrust created must be chalked up as one of the substantial, albeit unnecessary, costs of TARP.”

Barofsky said public suspicion was fed by Treasury’s decision not to require banks to report how they used their rescue money and its “less-than-accurate” statements describing the financial condition of nine large banks that benefited from large infusions of aid. The TARP program began under the administration of President George W. Bush and has expanded under Obama.

And now the Obama Administration has taken on the U.S. Chamber of Commerce. I’m not kidding. The All Stars had an excellent discussion on this last night, and included the overarching issues of both the Chamber of Commerce AND the attacks by Anita Dunn on Fox News. It provides a good overview of the direction the Obama Administration is heading:

You know, if things continue down this path with the people Obama has surrounded himself, I think we can expect to have this painting in the White House:

Replaced with this one:

Hey, it could happen! And the chances of that seem to be increasing with every day…

Additionally, analysts also discount the fact that the FDIC fund to cover depositors of failed institutions is close to zero. This fund can be replenished by the FDIC imposing an assessment on remaining banks or, if need be, tapping an emergency line of credit at the U.S. Treasury.

What will be the real impact of bank failures? In my opinion, American consumer confidence and small business owners will bear the brunt of the pain from the bank failures. Why?

>> The reality of further job losses at these banks and those they support within local economies.

>> The psychological impact of seeing small and community banks fail.

>> The lack of credit availability to consumers and small business owners in communities across America.

What are the plans to stem the tide and plug the holes created by bank failures?

1. Have larger banks take over these institutions. What are the risks in this transition? Many of these banks are already filled with underperforming and delinquent loans. The acquiring banks typically want the cheap deposit base of the failed banks and little more.

2. Private equity buyers will have the opportunity to purchase failed banks. What are the risks in this process? The private equity buyers will have to maintain higher capital ratios. Another risk is that the private equity buyers may utilize the cheap deposit base as a pool of liquidity and capital for higher return undertakings than traditional lending in the local communities.

In my opinion, the gap dividing Wall Street and Main Street is only going to grow wider in the midst of these bank failures. The party on Wall Street has little appreciation for this reality on Main Street.

John Kanas, the former chairman and CEO of North Fork Bank, and his private equity firm purchased BankUnited in Florida this past May. Kanas addresses these topics in an interview on CNBC.

LD

As many recent townhall meetings have shown, the American people are dealing with a few issues of trust in regards to their government. So I thought it might be fun to take a look at two very different videos on Money and what it can do.

________

__________

In this video from a June forum on the banking industry, William Black discusses our current financial meltdown in which a single bank, IndyMac, lost more money than was lost during the entire Savings and Loan crisis. He examines the industry structures and political failures behind this economic disaster, including a pretty scathing analysis of the key players and current FOG’s, Friends of Goldman, in charge of our economic recovery. And he explains the massive fraud as well as the vast transfer of wealth from the poor and middle class that took place and continues as the federal government bails out the reckless, and quite possibly the criminal.

Warning, this video is 98 minutes long, but well worth the time.

William Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and General Counsel of the Federal Home Loan Bank of San Francisco, and Senior Deputy Chief Counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

He currently teaches White-Collar Crime, Public Finance, Antitrust, Law & Economics (all joint, multidisciplinary classes for economics and law students), and Latin American Development at University of Missouri-Kansas City School of Law.

In his book, The Best Way to Rob a Bank is to Own One (University of Texas Press 2005) Mr. Black presents a history of the savings-and-loan industry scandals of the early 1980s and lays out how dishonest CEOs, crony directors, and corrupt middlemen can systematically defeat market discipline and conceal deliberate fraud for a long time — enough to create massive damage.

Sound familiar?

Colin Powell, one of President Obama’s most prominent Republican supporters, expressed concern Friday that the president’s ambitious blitz of costly initiatives may be enlarging the size of government and the federal debt too much.

“I’m concerned at the number of programs that are being presented, the bills associated with these programs and the additional government that will be needed to execute them,”

Um, now he’s concerned?

During the campaign, President Obama made a plethora of pie in the sky promises. While he has certainly abandoned the left in cuddling up to President Bush’s lack of transparency, signing statements and the like, he has certainly trumped the Bush Administration in terms of spending ridiculous amounts of money, particularly bailing out Wall Street before Main Street. While Mr. Powell noted that

‘health care reform and many of Mr. Obama’s other initiatives are “important” to Americans…’ “one of the cautions that has to be given to the president — and I’ve talked to some of his people about this — is that you can’t have so many things on the table that you can’t absorb it all.” …”And we can’t pay for it all…”

Mr. Powell’s comments represent the growing concern that began with hard-line fiscal conservatives but is now spreading to moderates about the rate of government spending and debt under President Obama, and the long-term impact on the country’s fiscal sustainability and national security.

The national debt stands currently at $11.5 trillion and the deficit for the current fiscal year is projected to be close to $2 trillion.

Mr. Powell expressed alarm at “budgets that are running into the multi-trillions of dollars” and “a huge, huge national debt that, if we don’t pay for in our lifetime, our kids and grandkids and great-grandchildren will have to pay for it.”

He’s not alone in expressing alarm. I am very curious as to why he is making these statements now…

“So, I think the president, as he moves forward with his initiatives, has to start really taking a very, very hard look at what the cost of all this is. And, how much additional bureaucracy [will] be needed to make all of this happen?” Mr. Powell said.

Mr. Powell also noted that he does “stay in touch” with the Obama Administration, particularly recently.

“The federal government has become too large and too intrusive in our lives,” Mr. Powell said then. “We can no longer afford solutions to our problems that result in more entitlements, higher taxes to pay for them, more bureaucracy to run them, and fewer results to show for it.”

Mr. Powell said that now that he still believes what he said then, but that he would put it in different terms now.

“I don’t like slogans anymore like ‘limited government.’ That’s not the right answer. The right answer is, give me a government that works,” he said. “Keep it as small as possible. Keep the tax burden on the American people as small as possible, but at the same time, have government that is solving the problems of the people.”

Gee, is Mr. Powell planning his own campaign sometime in the future? Sounds like some sound advice and some pretty good campaign slogans to the bargain. It’s too bad he didn’t give President Obama that advice back when he was a candidate last fall.

How odd the Mr. Powell chose to endorse the gentleman anyway without first stopping for a moment to listen to all Obama’s campaign promises and looking carefully at the price tag. As American Girl in Italy noted in her excellent article about President Obama’s reversals on health care, he is now looking at adopting some of the very proposals he vilified Senator McCain for suggesting last year. Guess he’s finally been looking at the price tag, too – and the sticker shock is mighty big indeed.

With all due respect to General Powell, I really find it irritating that he is continually reversing himself in order to rescue his reputation. Perhaps he felt his good name and many honorable years of service were somewhat tarnished by making the case to go to war with Iraq. Who knows if his decision to endorse Mr. Obama was part of a mea culpa in that regard. Now that VP Biden acknowledged that the stimulus is sort of a bust and that their team underestimated our economy’s problems, Colin Powell is distancing himself from the President with these statements?

Gosh, I sure wish he would make up his mind.

Today, Morning Joe had Jim Cramer on to put out Spitzer’s fire. Who’s right?

versus Jim Cramer:

So, WHO IS CORRECT? My money is on Spitzer.

Spitzer, by the way, is a regular columnist these days for Slate.com.

His latest column is “Fed Dread: The New York Fed is the most powerful financial institution you’ve never heard of. And look who’s running it.”

And you ALL know who used to run the New York Fed, right? Yes, one Timothy Geithner. Here’s why the New York Fed is so important, and why it is ethically compromised. From Spitzer’s latest column, “Fed Dread“:

A quasi-independent, public-private body, the New York Fed is the first among equals of the 12 regional Fed branches. Unlike the Washington Federal Reserve Board of Governors, or the other regional fed branches, the N.Y. Fed is active in the markets virtually every day, changing the critical interest rates that determine the liquidity of the markets and the profitability of banks. And, like the other regional branches, it has boundless power to examine, at will, the books of virtually any banking institution and require that wide-ranging actions be taken—from raising capital to stopping lending—to ensure the stability and soundness of the bank. Over the past year, the New York Fed has been responsible for committing trillions of dollars of taxpayer money to resuscitate the coffers of the banks it oversees.

Given the power of the N.Y. Fed, it is time to ask some very hard questions about its recent performance. The first question to ask is: Who is the New York Fed? Who exactly has been running the show? Yes, we all know that Tim Geithner was the president and CEO of the N.Y. Fed from 2003 until his ascension as treasury secretary. But who chose him for that position, and to whom did he report? The N.Y. Fed president reports to, and is chosen by, the Fed board of directors.

So who selected Geithner back in 2003? Well, the Fed board created a select committee to pick the CEO. This committee included none other than Hank Greenberg, then the chairman of AIG; John Whitehead, a former chairman of Goldman Sachs; Walter Shipley, a former chairman of Chase Manhattan Bank, now JPMorgan Chase; and Pete Peterson, a former chairman of Lehman Bros. It was not a group of typical depositors worried about the security of their savings accounts but rather one whose interest was in preserving a capital structure and way of doing business that cried out for—but did not receive—harsh examination from the N.Y. Fed.
The composition of the New York Fed’s board, which supervises the organization and current Chairman Friedman, is equally troubling. The board consists of nine individuals, three chosen by the N.Y. Fed member banks as their own representatives, three chosen by the member banks to represent the public, and three chosen by the national Fed Board of Governors to represent the public. In theory this sounds great: Six board members are “public” representatives. …

Here’s more from “Class, Required Overnight Reading on “Toxic Assets”and A.I.G. by Spitzer“:

“There should have been a very different regulatory framework. Not in the sense that we needed more words in the books. We needed more aggressive voices at the SEC, the FTC, the OCC – this welter of federal agencies — people who came to Wall Street and said, ‘Wait a minute. That leverage is crazy’. … [E]verybody derided leverage in public, but in private, participated to the hilt. … This was sort of a disease that got into the bloodstream and the DNA of Wall Street leadership. … The more traditional, old-fashioned investment bankers — you think of Felix Rohatyn, who said, ‘Wait a minute, guys. This doesn’t work’.

“AIG is at the center of the web. The financial tentacles of this company stretched to every major investment bank. The web between AIG and Goldman Sachs is something that should be pursued. …

“[A.I.G.'s] fundamental accounting structure was wrong. … [W]e brought a case alleging that they had manufactured false, fictitious reinsurance contracts. … [T]he underlying effort was to create an illusion of financial strength that was not there. … [F]our people have been convicted. …

“[A.I.G.'s problems] stemmed from an effort from the very top to gin up returns whenever, wherever possible, and to push the boundaries [to] garner returns almost regardless of risk. …

“When AIG initially received $80 billion — a decision that was the consequence of a very brief meeting of the president of the New York Fed [GEITHNER], the secretary of the Treasury [PAULSON], perhaps Chairman Bernanke and [some say the] chairman of Goldman Sachs — $80 billion, virtually all of it flowed out to counterparties, $12.9 billion to Goldman Sachs.

“Why did that happen? What questions were asked? Why did we need to pay 100 cents on the dollar on those transactions, if we had to pay anything? What would have happened to the financial system, had it not been paid?”

[...]

An optimist has been defined as one who would, should a ton of crap be dumped on his doorstep, jump right in and rummage through it, convinced that there must be a pony in there somewhere. I tend towards optimism.

So, while not for one second denying that millions of citizens have been significantly harmed by the economic decline, disaster often has a way of encouraging the the best in human nature to come forward. As our society appears to increasingly embrace a narcissistic, materialistic morality, bearing witness to what this has wrought may shake us all up in a good way.

Here’s my list as to how that could happen.

1. Valuing experiences over accumulating tangible things. The research substantiates that happier people are less interested in stuff and mostly find their joy in experiences. And maybe the best things in life are not free, but some come close. To wit: a picnic in the park, walks through the closest pretty place, potluck dinners with a few friends, bird and other small critter watching (scrub jays are a hoot, especially if you have peanuts–shells and all–to offer them), and checking the paper for free events. (Many communities have slews of them every week.) It kind of takes getting used to after spending $10 for a movie and $20 for a dinner out, but it grows on you. “What is the most fun thing we can do that doesn’t cost anything (or very little)?” A great game for tough times.

2. Finding and exercising your creative self. You may have received a handmade card from a child. That beats Hallmark every time, yes? And with cards now costing as much as a gift did a few years ago, it’s time to get back to the joy of making things from scratch. Cards, wrapping paper (recycle those grocery bags and magazines with a great collage), clothing, beaded jewelry, playing with a food recipe, whatever. I have always taught my students that what is truly special about being human is our capacity to create something from nothing, to transform an idea or raw stuff into something that arose from inside our own selves. Pure joy awaits.

3. Valuing used goods. Just because it is new and no one else has touched it doesn’t mean it’s better. Increasing numbers of my friends are unabashedly buying clothing from thrift and second hand stores, not because they are absolutely forced to, but because it is fun. The bargains and “the look” can be stunning. They also like the idea of giving items another round of wear. Other friends are finding that some old things can be fixed, and sometimes they can even do it them themselves (from which they get the joy as described in #2). Money is saved in the process and for the environment, well that’s #4.

4. Helping Mother Nature. When errand times and routes are planned to conserve gasoline, and when stuff is reused or recycled, we help protect the environment. Bad economic times may help instill some good habits.

5. Learning what you don’t really need. A friend said recently, “You know, I have had to spend wisely because my job was furloughed, but I don’t miss a lot of stuff I thought I absolutely had to have. And I found some good less expensive replacements for things I needed. I’m feeling kind of proud of myself.” I think most people would be able to save money if they realized that some of what they want to replace is quite good enough as it is.

6. The joy of helping others. Another solid finding from the happiness research is that accumulating wealth and material things is not a marker of a satisfying life. One of the primary sources of life satisfaction is quite the opposite—giving of oneself to others. This current economic situation means for most of us that the need is no longer just about writing a check to some charity and sticking it in the mailbox. Rather, the needs are much closer to home now. The local school is short on basic supplies, the food bank is desperate for donations, a niece lost her home and needs a refrigerator for an apartment, a neighbor’s home was stripped bare by burglars when they were away for the day and they need a lot of things that the rest of us can spare. Giving is getting up close and personal—and doing it nourishes our souls.

7. A good time to drop bad habits. For those who eat or drink way too much, smoke, are dependent on unnecessary chemicals, to work on cutting them out not only saves cash but will help out with health costs–if not now, down the line. Indeed, taking care of ourselves in every way not only will cost less but maximizes the chances of a more vibrant life (while saving the rest of us money as well).

8. Grow some food. Even those with small places, so long as you have some sun and a place to put a pot or two, you can know the real taste of a tomato. I only recently started “farming” my yard. I made some mistakes (trying veggies that really don’t like my climate) but the successes are glorious. Besides tomatoes there are herbs, zucchini, oranges, peaches, pomegranates, guavas, and carrots. They don’t taste anything like what you buy in the store. They taste like…heaven. Maybe you don’t save a ton of money, and it does take some time to watch over them as they grow, but there is something deeply satisfying to be found here. Back to the land, I guess. (Oh, and help our landfill crisis by putting veggie, fruit scraps, and coffee grounds in a big container that you turn from time to time, and after some weeks you will have the greatest soil ever. You don’t absolutely have to add worms. The right bugs will find it on their own.)

9. Remembering how to save. I was so good as a kid. I would save up those pennies until I could buy something really cool. Then adulthood hits—earn a dollar and quickly spend it on something that beckons from TV. After all, we had to have “one of those” to be perceived is as successful human beings, right? Americans are not saving, and the ramifications are destructive for us all as the bankruptcy rate skyrockets and many people cannot even buy what they really need. Maybe after things settle down (fingers crossing here) savings accounts will become popular, and having one a source of family pride.

10. Lessons passed on to the children. If we do come to value each other more, conserve better, appreciate what we do have more, and place an emphasis on meaningful experiences and maintaining good health, our kids will pick up on it. Now, that would be priceless!

What do you think? Any ideas to add or expand upon?

Right now, we all feel like we don’t know what to do with cash if we have it.

Many of us have accounts with banks and worry about whether or not they are solvent. Even with the FDIC promise, I know many people still worry about how easily or quickly they would be able to get access to their own money if their bank were to have problems.

You should also know that if a large failing bank were to be Nationalized, the stockholders would take the hit, but the account holders would not. In other words, if you have an account in one of these banks, it will remain intact. Whether or not limits would be set on how and when money can be removed remains to be seen. It has happened with some of these banks that have failed in order to quell “Runs” on the money.

So it would be a LOT easier to check your bank’s status now than to worry about it later. Of course, a bank’s rating can change as well, from bad to better or from good to not-so-good. So it’s best to check back every so often.

If you want to check your bank’s current rating or your credit union’s rating, go to the Safe and Sound at Bankrate.com.

You can also check the ratings for all the banks in your city, state, region. For each bank, you can get a report that provides more details as to why the bank has a particular rating.

Here’s a list of bank closings for 2008 and 2009. You can see 2007 and earlier closing list here. As you can see, this has been going on for awhile. The publicity on these closings was practically non-existent in 2007, and fairly paltry in 2008. In fact if you click on that link, you will see that there were bank Closings all the way back to 2000, with Penny Pritzker’s Superior Bank as one of the early, avoid-the-rush sub-prime lender seizures.

In some cases, the FDIC takes over the bank, but in many of the cases, accounts are just transferred to more solvent area banks, which makes for a smoother transition for customers.

2009

May 01-American West Bank-Layton, UT

May 01-Citizens Community Bank-Ridgewood, NJ

May 01-Silverton Bank, N.A.-Atlanta, GA

Apr 24-First Bank of Idaho-Ketchum, ID

Apr 24-First Bank of Beverly Hills-Calabasas, CA

Apr 24-Michigan Heritage Bank-Farmington Hills, MI

Apr 24-American Southern Bank-Kennesaw,GA

Apr 17-Great Basin Bank of Nevada-Elko, NV

Apr 17-American Sterling Bank-Sugar Creek, MO

Apr 10-New Frontier Bank, Greeley, CO

Apr 10-Cape Fear Bank-Wilminton, NC

Mar 27-Omni National Bank-Atlanta, GA

Mar 20-Team Bank N.A.-Paola, KS

Mar 20-Colorado National Bank-Colorado Springs, CO

Mar 20-First City Bank-Stockbridge, GA

Mar 06-Freedom Bank of Georgia-Commerce, GA

Feb 27-Security Savings Bank-Henderson, NV

Feb 27- Heritage Community Bank-Glenwood, Ill

Feb 13 – Pinnacle Bank of Oregon-Beaverton, OR

Feb13- Cornbelt Bank and Trust Co. – Pittsfield, Ill

Feb 13- Riverside Bank of Gulf Coast – Cape Coral, FLA

Feb 13 – Sherman County Bank- Loup City, NEB

Feb 6 – County Bank – Merced, CA

Feb 6 – Alliance Bank-Culver City CA

Feb 6 – FirstBank Financial Services -McDonough, GA

Jan 30 -Ocala National Bank – Ocala, FLA

Jan 30 – Suburban Federal Savings Bank – Crofton, MD

Jan 30 – Magnet Bank – Salt Lake City, UT

Jan 23 – First Centennial Bank – Redlands, CA

Jan 16 – Bank Of Clark County – Vancouver, WA

Jan 16 – National Bank of Commerce – Berkeley, ILL

2008

Dec 12 – Sanderson State Bank – Sanderson, TX

Dec 12 – Haven Trust Bank – Duluth, GA

Dec 5 First Georgia Community Bank – Jackson, GA

Nov 21 – PFF Bank and Trust – Pomona, CA

Nov 21 – Downey Savings and Loan Association, F.A – Newport Beach, CA

Nov 21 – Community Bank- Loganville, GA

Nov 7 – Security Pacific Bank, Los Angeles, CA

Nov 7 – Franklin Bank, SSB – Houston, TX

Oct 31 – Freedom Bank- Bradenton, FLA

Oct 24 – Alpha Bank and Trust – Alpharetta, GA

Oct 10 – Meridian Bank-Eldred, ILL

Oct 10 – Main Street Bank – Northville, MI

Sept 25 – Washington Mutual Bank-Henderson, NV and Park City, UT

Sept 19 – Ameribank-Northfork, WV

Sept 5 – Silver State Bank-Henderson, NV

Aug 29 – Integrity Bank-Alpharetta, GA

Aug 22 – Columbia Bank and Trust-Topeka, KAN

Aug 1 – First Priority Bank-Bradenton, FLA

Jul 25 – First Heritage Bank, N.A-Newport Beach, CA

Jul 25 – First National Bank of Nevada-Reno, NV

Jul 11 – IndyMac Bank – Pasadena, CA

May 30 – First Integrity Bank, NA-Naples, FLA

May 9 – ANB Financial, NA, Bentonville, AZ

Mar 2 – Hume Bank-Hume, MO

Jan 25 – Douglass National Bank-Kansas City, MO

Welcome to the world of global finance 2009. As banks, insurance companies, hedge funds, and other financial entities deal with losses, we see a lack of aggressive posture being taken on dealing with these losses. Why? Once moral hazard is violated with a single entity, every other entity will look to violate it as well.

Immediate losses are forestalled in hopes that they will be covered or disguised. However, every loss ultimately must be recognized. By whom and how is the question.

At this juncture, more of the losses in our financial system are being directed toward the taxpayers. How? Via the wide array of government programs. What is the cost? A likely underperforming economy due to a lack of credit, and higher taxes to offset lower revenues.

The financial and political arenas have been intertwined in this mess right from the outset. The highly respected Bloomberg reporter Jonathan Weil opines on how President Obama is taking greater political risk in forestalling losses within the banking system. Weil writes:

Why doesn’t the Obama administration force insolvent banks and insurance companies to come clean about their losses first? It’s the “why” that’s so vexing. The who, what, when, and how are mere details, by comparison.

More than anyone else’s, it should be in Obama’s political self-interest to accelerate the worst of the financial crisis and get as much of the inevitable pain behind us as quickly as possible. Every day he waits is one less day he will have between the time we hit rock bottom and the next election. And yet, Obama and his minions are doing all they can to delay the reckoning, which only will make it worse.

In my opinion, Obama does not force the hands of these financial firms for three reasons:

1. his lack of understanding of the issues

2. his lieutenants’ connections to the firms

3. Congressional connections to those firms and payoffs made by Wall Street

While the taxpayers bear the enormous financial risk of these losses at this juncture, Obama and his troops bear the political risk in the 2010 and 2012 elections.

Why are Obama and team taking that risk? Weil offers:

Perhaps they’re scared the markets would panic if large, insolvent financial institutions started telling investors just how undercapitalized they are. There’s the distinct chance some of Obama’s advisers are beholden to failed banksters, because they used to work for them and may want to do so again someday.

Additionally, if Obama and team aggressively challenged the banks to address the losses currently, perhaps they may feel the risks to the financial system would spill over into the political arena. Thus, instead of truly inspiring confidence in the markets by dealing directly with the situation, we get the smoke and mirrors. To wit, Weil asserts:

Why else would the Treasury tell the 19 biggest U.S. banks to undergo “stress tests” of their financial health, and then put the banks in charge of performing the tests on themselves? Those reasons also might help explain why regulators pressured the board that sets U.S. accounting standards to weaken the rules on mark-to-market accounting, so the banks could hide their losses and show more capital.

Weil continues to provide a measure of integrity and transparency I wish we would see from our financial executives and political leaders.

LD

That said, for those involved in global finance, whether you like George Soros or not, you need to know what he is thinking. Why? George Soros can move markets via his own investment strategies. Additionally, there is little doubt that George is the epicenter in a massive flow of market sensitive information.

To that end, Soros gave a stinging indictment of the change in the FASB’s mark-to-market by stating in a Bloomberg interview,

the change to fair-value accounting rules will keep troubled banks in business, stalling a recovery of the U.S. economy.

“This is part of the muddling through scenario where we are going to keep zombie banks alive,” Soros, 78, said today in an interview with Bloomberg Television. “It’s going to sap the energies of the economy.”

Is this statement a self-serving offering by Soros? Who knows? Is it an attempt to further promote the U.S. as a lessened power? Perhaps. That said, there are others, myself included, who believe the relaxation of the mark-to-market, especially for outfits like Freddie Mac, Fannie Mae, and the 12 regional Federal Home Loan Banks (FHLBs) is nothing short of a charade.

Did Soros’ statement have an impact on the market? Not today. The dollar has been improving of late. However, over the longer haul, the cost of having a number of zombie-like banking institutions will be pressure on the dollar along with increased borrowing costs for the zombie institutions or Uncle Sam who will be backing them.

From a personal perspective, would you lend money to a zombie?

And now, here’s a must-watch little treat. Crank up your speakers . . .

LD