Tuesday, November 25, 2008

The Great Depression of 1995

More banks are in trouble since any time since… 1995?

The Federal Deposit Insurance Corp. said Tuesday the list of banks it considers to be in trouble shot up nearly 50% to 171 during the third quarter — yet another sign of escalating troubles among the institutions controlling Americans' deposits.

In the second quarter, 117 FDIC-insured institutions were on the list. Now, at 171, the number of institutions on the FDIC's "problem list" is at its highest level since late 1995.

Can anyone explain why the media and politicians incessantly compare the current problems with the financial sector with the Great Depression when they only have to go back little more than a decade to find equivalent circumstances?  Or go back a little more than two decades to find a situation that is much, much worse.  And who can forget the 70s? (well, I was in diapers at the time, but that’s a different story).

Is it really that bad and we are still on the leading curve?  Are politicians playing it up so that they can make a power grab?  Is the media desperate to paint Bush as incompetence incarnate so they can canonize Obama more quickly? 

How much of the fear and uncertainty is merely a feedback loop and if everyone would stop saying how bad it is thins would start to turn back around?

I’m no expert, but I’m favoring the later.

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