CNBC's Rick Santelli on the parlour game that is Quantitative Easing

Courtesy of Zero Hedge, will we ever see 'reality' again? Judging by CNBC's Rick Santelli's one-sentence epic rant Friday morning of the centrally-planned farce that we are living through... no. This exchange is in the clip above:

Liesman: "Why would you normalize rates?" 

Santelli: "Are we really that far down the hole that normalizing rates after this tremendous number - the huge drop in the unemployment rate - that you guys still wanna have the hammer-and-sickle on the flag"

So the short answer, it appears, is 'No'.

But perhaps it is Rick's seething anger in a second clip that exposes the reality of "the apologists" for the Fed and as he notes: "This whole thing is a Parlor Game and the country deserves better than Fed experimentation." 

Later in the day - an even more epic-er exchange.  In Liesman and Santelli II:

Liesman: "The Fed is doing the only thing it knows" 

Santelli: "The economy is better despite them." 

Anchor: "Where would we be today without the Fed?" 

Santelli: "We'd be significantly better now! What wouldn't have been significantly better is the one-year after the crisis - that would have been worse - but we would have been 'on the mend' Sam Zell-style, we would have hit a 'real' bottom."

Rick Santelli is so right.  The pain would have been sever, but malinvestment would have been cleared away and we would have had a genuine recovery by now.  Instead we are looking at a 'crisis' situation for years to come yet.

Both clips are well worth watching if economic policy interests you.

   

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Another whirlwind week ends with 'Irrational Fear'? It's Bank Failure Friday and... a priceless youtube clip.

Laurel Magri: lying, deceptive, manipulative whore.
UPDATE: Bank Failure #17: Freedom Bank of Georgia, Commerce, Georgia (the weekend can officially begin now)

The day after the DOW plunges to fresh 12-year lows we reflect on quite a week.

The grim news reads like a police blotter: GM said its survival is in doubt, bank shares took a beating, Citigroup fell below a buck and China defied expectations by failing to boost its economic stimulus program (and that's just yesterday's news).

Meanwhile layoffs were the story of the week. Adding to the list yesterday was the Toronto Star, the biggest Canadian daily, who issued pink slips to 60 employees, all from sales and marketing. 3,400 Canadians have now lost their jobs over the past four days.

Bank of Canada deputy governor Pierre Duguay came out and warned Canadians not to be spooked by "irrational fear" over the economy but then goes on to tell the House of Commons finance committee that "there will be more bad economic news coming".

[Remember that if you are laid off. You can meet with your bank manager after failing to make three consecutive mortage payments and say, "hey, chill dude... don't be spooked by irrational fear, man"]

But it's Friday so let's turn our attention to our neighbours to the south as we keenly await the carnage from Bank Failure Friday.

As faithful readers know, bank failures in the US always seemed to be delayed until late on Friday afternoons, prompting Friday to be renamed 'Bank Failure Friday' by many economic blogs.

And it appears it might be a banner year of Friday's.

The Wall Street Journal reports that the Senate Banking Commission wants to give the FDIC $500 Billion from the Treasury Department Seems the FDIC's deposit-insurance fund has fallen precipitously with 25 bank failures last year and 16 so far in 2009. Loading up for the coming barrage, perhaps?

Maybe the Commission caught American CoreLogic's just released report on households with negative equity. They report 8.3 million US mortgage holders are underwater. Many analysts expect that the number of households with negative equity could rise to 17 to 23 million by the end of 2010. That means more US homes foreclosed, more US banks failing, and more bad economic news for America's largest trading partner: Canada.

Updates from the FDIC as they come in, check back late this afternoon.

In the meantime you may recall the rant from Rick Santelli that we posted on February 19th. Santelli is a former derivaties trader who reports for CNBC from the Chicago Mercantile Exchange. On Feb. 19th, Santelli took issue with President Obama's plan to bailout homeowners.

This provided quite the backlash since Santelli, as former derivatives trader, embodies the Wall Street wormhole into which much of the bailout money has gone.

In response, Jon Stewart eviscerates CNBC and Santelli in this soon-to-be-classic 8 minute clip.

It's worth the time to check it out while we wait for the FDIC.



Bank Failure #17

From the FDIC: Northeast Georgia Bank, Lavonia, Georgia, Acquires All of the Deposits of Freedom Bank of Georgia, Commerce, Georgia

Freedom Bank of Georgia, Commerce, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Northeast Georgia Bank, Lavonia, Georgia, to assume all of the deposits of Freedom Bank of Georgia.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $36.2 million. Freedom Bank of Georgia is the seventeenth FDIC-insured institution to fail in the nation this year. The last bank to fail in Georgia was FirstBank Financial Services, McDonough, on February 6, 2009.

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