Many people are either scratching their heads in consternation or celebrating over the assertions by the government and its court economists that the economy in the U.S., and by extension – the world – is in a state of recovery.
It’s so nonsensical when you take into account the overall picture, that it must be looked at closely because of the potential consequences to those who may make key decisions in their lives based upon these assertions.
What I want to mostly look at in this article isn’t all the numbers to go over, as most of that you can get anywhere, what I want to focus on is the destructive political forces that are now politicizing even the economic statistics to create a false and hopeful picture where it doesn’t exist.
Just like the creative accounting that creates phantom profits, which only exist on paper, statistics are being adapted to desired outcomes rather than being used to accurately measure present realities.
So we are left with having to decipher, interpret and read between the lines to get accurate measurements, because politicians are attempting to create a positive outcome using statistics as a means to generating a self-fulfilling prophecy.
This is both wrong, dishonest and in the end, will come back hard as them as the economic realities hit people, contradicting the politicized statistics.
Keep in mind that politicizing statistics isn’t necessarily referring to changing them, but it can mean interpreting them to one’s liking, or more likely, only including those that fit the story that wants to be told i.e. statistical omission or under-reporting of them.
Just taking into account Alt-A and commercial loans in the banking sector underscores the extraordinary problems we still face, and that doesn’t include other important data like unemployment continuing to grow, among many other things.
Some in the media base a lot of their reporting on unemployment growth rates slowing down, but that really means nothing. Just like when we had the housing bubble and values and prices went up at ridiculous rates which were not mirroring reality in any way, and eventually had to fall. Many people warned of this but few, if any, listened. In the same way unemployment statistics obviously will eventually slow down for the same reason: they can only fall based upon the realities we face, just like housing prices and values can only rise at market rates if we’re in a healthy economy. Low interest rates from the Federal Reserve created the housing bubble, where people bought homes they couldn’t afford in hopes of turning around and selling the home and making a huge profit, not realizing that in the end, all ponzi schemes end, and someone is left holding the bag. They know it now.
Alt-A loans will be re-set over the couple of years, and that’s going to be a big problem, and the commercial loans business is crashing in around us with little being said as to possible effects it’ll have on the banking industry and the overall economy.
One example of this being worse than we are being told is the FDIC, with a wink and a nod, are allowing banks to keep bad commercial loans of books and not to seize properties, effectively allowing them to continue operating when for all practical purposes they are insolvent.
Again, this is one of those statistics that are real, but it’s kept out of the media and reporting by simply pretending it doesn’t exist, and the FDIC not doing their job of enforcement based on political reasons.
Some investors in real estate are actually counting on the unwillingness of the FDIC to enforce the rules in order to keep prices higher in some ETFs and REITs.
The inaction of the FDIC and the commercial banking units are also causing problems in that it’s locking up the markets because there are so few transactions going on, which is causing a lack of needed market information to determine prices. That’s caused a huge disparity in what buyers and sellers are willing to do, keeping the industry from going forward.
I’ve only went a little into detail on the commercial loans side to show you the depth of the problem and how it hasn’t even been dealt with yet, let alone loosening up so it can go forward. And this is only one small part of the overall banking and economic picture, and yet we’re being told a recovery has began. Don’t believe it, and be very wary of making decisions based upon the conclusions coming out of the government’s economic camp.
