I hate to quote the New York Post. I really do. But this guy makes a good point….

IF you think banks have trouble now, just wait until they report financial results in January.

That’s when the balance sheet will really hit the fan.

The problem involves a rule passed a couple of years ago that will put the banking industry’s outside auditors in peril if they sign off on results that they really can’t verify.

The problem involves a rule passed a couple of years ago that will put the banking industry’s outside auditors in peril if they sign off on results that they really can’t verify.

And right now there is nothing verifiable – or even understandable – about the banking industry’s exposure to derivatives.

The auditors’ dilemma was caused by a rule change that now prohibits banks from indemnifying auditors against mistakes.

Why does this matter? Because the banks themselves obviously are not that sure about the value of the assets on their books. Given their uncertainty, they have chosen to err on the wildly optimistic side. But give that the auditors are going to be liable for any errors in the accounts, it is doubtful they will go easy on the banks. So beginning of next year might be a moment of truth.

And just to remind people of what we have pointed out before, we point you to this story from Newsmax….

Think the estimated subprime debt load carried by the big international banks is big, at $1 trillion?

How about this: Americans now owe nearly as much – a record $915 billion – on their credit cards alone.

And defaults and delinquencies in the credit card sector are piling up – which means big banks are on the hook, again. More sand in the gears for the global economy.

This shocked me….

As oil prices surged over the last few months, natural gas prices in the United States did something that could help to cushion the economic shock. They fell.

Now natural gas and oil never move in complete lock step. But I would have never guessed that natural gas prices fell somewhat from last year. I would have thought that duel fuel power plants would have kept that from happening.

I don’t have much sympathy for the big builders. Especially when they say things likes this….
“Perhaps as the presidential campaign heats up and moves to the front page, negative articles about housing will move off the front page,” he said. “Then, hopefully, the positive underpinnings of low interest rates, low unemployment and a decent economy Click Here to continue reading.

I guess you could call it a sign of the times we live in–the economic times we live in, I mean. I don’t carefully follow the price of all groceries when I do my weekly shopping, but I do keep a regular eye on the price of a gallon of milk. The recent trend has [to read more click here…]

I have a hard time writing about the current financial problems afflicting this country. Every day I have been reading about a new company that is losing billions of dollars for some reason or other. Wake me up when somebody manages to lose a trillion dollars or a major bank goes bankrupt. The only thing Click Here to continue reading.

Today everyone was freaking out about how fast the dollar fell. As Marco Man said…

Well, you can’t say that Macro Man didn’t warn you. More than two months ago, he suggested that Fed easing of 0.50% or more could generate a ‘dollar down bubble.’ After the initial Fed easing, he warned that the buck was toast. And so it’s come to pass, with the USD falling steadily since he first voiced his concerns. Until recently, however, the dollar’s decline has been relatively orderly, and not characteristic of the “throw caution to the wind” price action that one normally associates with bubbles. All that may have changed today, however, as the buck is falling hard against every currency under the sun, including erstwhile whipping-boy the yen. It looks like the real meat of the dollar down bubble has begun.

We wonders if the dollar is really in a reverse bubble right now. But regardless of whether Marco Man is right or not, the falling dollar is starting to make people sit up and take notice. This from AP….

Wall Street suffered its second big drop in a week Wednesday, with investors worried about spreading fallout from the credit crisis at banks and about a dollar that just keeps getting weaker. The Dow Jones industrial average fell more than 360 points – just about matching its plunge of last Thursday.

A passel of worries tormented investors, including the dollar, which swooned amid speculation that China will seek to diversify some of its foreign currency stockpiles beyond the greenback. Meanwhile, a record loss from General Motors Corp. owing to an accounting adjustment further dragged on sentiment.

Oil traded above $98 per barrel for the first time before retreating, and gold pushed higher, moves exacerbated by an anemic dollar.

The 13-nation euro hit a fresh record against the dollar – rising to $1.4729 – before falling back. The dollar fell not only against the euro but in Asia following a report that a senior Chinese political figure said China should diversify its $1.43 trillion foreign exchange reserves into the euro and other strong currencies.

On top of all this, people are getting increasingly concerned about the health of the banks. But right now, all those worries are still in the speculative stage.

I have never had much use for peak oil believers. Their arguments are generally not worth the time it takes to read them. But my arrogant dismissal of peak oil has been shaken by Stuart Staniford. Unlike most peak oilers, Mr. Staniford really gives you something to think about.
While I was reading Mr. Staniford’s Click Here to continue reading.