Oh, that's nice

US Recovery Is Far Off, Banks Are 'Basically Insolvent': Soros

The U.S. economy is in for a "lasting slowdown" and could face a Japan-style period of relatively low growth coupled with high inflation, billionaire investor George Soros said on Monday.

Soros, speaking to Reuters Financial Television, also warned that rescuing U.S. banks could turn them into "zombies" that draw the lifeblood of the economy, prolonging the economic slowdown.

"I don't expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown," Soros said, adding that in 2010 there might be "something" in terms of U.S. growth.
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The healing of the banking system and housing markets is crucial to recovery. "The banking system, as a whole, is basically insolvent," Soros said.

You always like to hear this kind of optimism from billionaire investors who not only looked at the problems and correctly predicted losses, but have somehow found ways to make money betting investing nowadays. Still though, "basically"? Seems more like we can strike that from the phrase and just state "the banks are insolvent". That's essentially why we have these long drawn out procedures in place for paying good money for bad assets. If we actually payed the real value of these assets, the banks would probably fail faster than you can say Greatest Depression. But what does George Soros know?

On the other hand, TV smart guy and financial whiz kid Jimmy Cramer says the Depression is over. Given his financial predictive record that John Stewart kindly melted down, froze, and repeatedly violated him with for a half an hour, you should be worried. He's about a week off from calling for a virgin sacrifice to fix the economy and two weeks out from saying the virgin sacrifice was performed incorrectly and that he can't be blamed for it going wrong and not working.

So let me see here. On one hand we have a billionaire investor talking about how things won't get better soon and a Nobel economist knocking the methods which we are getting out of the crisis on a daily basis. On the other hand we have Jim Cramer and Wall Street CEO's saying things are OK and all the plans are great. Yeah, this is a good feeling I have in the pit of my stomach. Totally not throw-up related at all.