The Corpus Callosum

If The Only Thing He Does…

If the only thing Obama does, is to not do the bad things that Bush did,
then he will be a success.  A disappointment, yes, but also a

Above is a clip of Olbermann, summarizing in about 9 minutes the worst
of the past eight years. Below the fold is one of the consequences. It is a
chart depicting the KBW Bank Index
performance over the past four years.  The Index is a weighted
index comprised of the 24 largest national and regional banks.  It
is now at a 13-year low — and that is AFTER a gazillion dollars (actually $2.8 trillion) in bailouts.


The prospects are not good.  Deutche Bank analysts are projecting the bank’s loan losses to double between now and the end of 2010.  Roubini expects the total losses on unsecuritized loans to be about $1.6 trillion. 

On the graph above, the author did not bother to depict the support
level going forward.  Perhaps that is because it is essentially

There is not much Obama can do to stop this, although Friedman’s ideas
would help.  The key to this approach is to force banks to move
all their off-balance-sheet garbage onto their balance sheets, then
come clean about what they really have, or don’t have. 

What can we do?  Don’t pay any attention to my advice.  But
if you do, then: stop doing business with large banks.  Stop using
credit cards.  Pay off all debt.  Do not have more than the
FDIC insured amount in any FDIC-insurable account.  Keep a modest
sum in a savings account separate from your main bank.  Do as much
business as feasible with local companies.  The idea is to
strengthen you community, even if it means weakening the national and
multi-national companies, and even if it means you are not always
getting the best prices or the best rate of return.  It is your
community that will rely upon in the future, so it is worthwhile to do
what little you can to keep it strong.

Cheer for our new President.  He’s a good person.  But don’t rely on the Federal Government any more than you have to.


  1. #1 Even Stephan
    January 19, 2009

    If the only thing Obama does, is to not do the bad things that Bush did, then he will be a success.

    Regression to the mean could work in his favor.

  2. #2 Paul Murray
    January 19, 2009

    I’ve used a VISA debit card exclusively for the past … 10 or 15 years. No line of credit. It’s awesome.

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