Stocks marked solid gains into the final hour on little real news. The on again off again official support for the Greek debt crises doesn’t seem to have any conviction either way. What does have support is the idea that the world’s central banks don’t want significant defaults be they sovereign or corporate and at the end of the day whatever is necessary to prevent exactly that will be undertaken. As the examples of Greece, Dubai and of course us right here in America with the bank bailout illustrates.
Only one bank failed last week, 1st American State Bank of Minnesota. That said the general consensus is that many more will fail before the end of the year and when one considers the problems with commercial real estate, the resetting of the Alt-A and Options ARM Loans, foreclosures and delinquencies due to unemployment, the failure of the assorted loan modification programs and the rising popularity of strategic default its easy to see that this can easily become a reality.
So far the official extend and pretend response combined with extensive stimulus programs and outright bailouts has worked quite well. At least from a treating the patients symptoms is concerned, the underlying causes, too much debt, have remained essentially unchanged, some improvement on the individual side while the government condition has deteriorated substantially, ala Japan who 20 odd years later are still doing the extend and pretend thing as their official debt to GDP hits 200%
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. 
