The folks at Institutional Risk Analytics provide a pretty clear, spin-free metric
To us, there is no “double dip” in the economy. We never recovered from the first decline in aggregate demand. Forget the bogus inflation and GDP statistics coming from Washington. Talk to your neighbors and family, the people in the community who own businesses. Ask them how their revenues for 1H 2010 are doing YOY.
This is why news that North Carolina some 40 endangered state-chartered banks should set off alarm bells. Barring some magical re-inflation of the real estate sector, some of those banks are going to fail — or be merged off to avoid failure.
The reality is that those sorts of institutions lent heavily to local developers, commercial real estate, and builders in general. Unless there is cash in the pipeline from those projects — remember, subs have probably been stiffed so that contractors and developers could limp along and avoid bankruptcy themselves — the banks cannot get paid.
This brings us back to general economic activity and business revenue in 2010. Ask around. Are people really doing more business?
