KPIG Radio December 7

Stocks entered the final hour mixed on little economic data. The latest cost estimate of the TARP bankster bailout package has been revised lower by 200 billion as the Treasury Department now expects to recover all but 42 billion of the 370 billion originally committed as per an article in the Wall Street Journal. Great news but I won’t be breaking out the champagne just yet as substantial bank losses remain due to accounting gimmicks, specifically mark to model as opposed to mark to market asset pricing, commercial real estate losses and the Alt-A and Option ARM resets that combined are highly likely to precipitate credit bust 2.0 next year. Another 6 banks went to the receivers Friday; Greater Atlantic Bank, Reston, Virginia; Benchmark Bank, Aurora, Illinois; AmTrust Bank, Cleveland, Ohio; The Tattnall Bank, Reidsville, Georgia; First Security National Bank, Norcross, Georgia and The Buckhead Community Bank, Atlanta, Georgia. I guess them southern folks had some real banking problems over the weekend. Seems the NBER or National Bureau of Economic Research, they are the ones who decide when recessions officially start and end. Are about ready to call an end to the current recession, already the longest and most severe since the Great Depression of the 30’s. That said the committee is still looking for improvements to the labor market and aggregate output, they don’t seem to make a distinction between output achieved with unsustainable debt funded government stimulus and real organic economic growth but there you go. Fed Chairman Ben Bernanke’s confirmation hearing continue on Capitol Hill, so far they have produced some fairly pointed questioning. The most recent of which finds the chairman voicing a very similar set of concern relative to the economic recovery as the NBER. Seems neither thinks the recovery is a slam dunk.