98 Banks Fail

At the beginning of this year, after reviewing the number of banks which failed last year and the state of the economy, I predicted that we would suffer between 125 and 150 bank failures in 2009. So far, after 3/4's of the year have passed, we have reached 98 failures. I assume that we will see a few more fail before the end of the year. See the artilce I attached under the pertinent articles section for further detail.

I note this, not to pat myself on the back, but to point out that regardless of how the Federal government may spin it, our economy is not improving. We are still suffering through a serious recession which is expanding, not diminishing. The government response -- utilizing a 700+ Billion Dollar bailout plan followed by a 700+ Billion Dollar stimulus plan, is neither bailing out nor stimulating the economy into productivity.

The banks are not lending any more than they were before the bailout and the number of American citizens who are losing their jobs and careers is not decreasing. In addition, the FDIC is being pushed to the breaking point and is about to go the way of AIG and Fannie and Freddie without additional capitalization.

When will it end and the economy turn around? In my opinion, when the government stops artificially propping up selected segments of business. We must let those that are not efficient, fail and be replaced by those which operate profitably. This is common sense business 101.

Will this hurt in the short term? Quite likely, but we're already hurting. Better to have the pain be short term and lead to a stronger and more stable economy. At least I believe this to be preferrable to the long term pain of an ailing economy which is artificially propped up by the government use of our tax dollars in an inefficient manner.