It's been a year since Lehman Brothers went under. The underlying problems have not been dealt with and situation is worse.

Reality Receding
By James Howard Kunstler

"Now that everybody in the USA, from the janitors in their man-caves to the president addressing congress, has declared the "recession" over, is exactly the moment when what's left of the so-called economy is most likely to implode. If there were still shoeshine boys on Wall Street, they'd be starting their own hedge funds now, and CNBC's Larry Kudlow would be toasting them in the Grill Room of The Four Seasons. What we've seen in the vaunted rally for the last six months is the triumph of wishing over facts, combined with the most arrant market manipulation by floundering banks backstopped by a panicked government -- all pounding sand down a rat-hole of hopeless non-performing debt, while pretending that the machinery of capital finance still grinds on.

"Despite what a few elderly Mr. Naturals may say about abolishing "capitalism," we're not going to have an advanced economy without a coherent banking system, and by advanced economy I mean one in which the lights stay on. By coherent I mean a system that is able to deploy accumulated wealth for productive purposes, in the service of continuing civilization. (And, yes, I know that the followers of Daniel Quinn are not so sure that civilization is worth the trouble, but unless you support the killing-off of about six billion humans right away, things on Earth are not favorably disposed just now for a return to hunting-and-gathering.)

"I would hasten to cut through the fog of despair to reassert -- for the thousandth time -- that a true American perestroika is possible, if the public could overcome the plague of cognitive dissonance sweeping the land and form a consensus for action that comports with reality's agenda. But that is looking less and less likely. Instead, what we see is a rush into delusion, seasoned with grievance and gall. Spectacles like last weekend's march on Washington don't happen for no reason, of course. From where I sit, the uproar can be attributed to comprehensively bad American leadership, a crisis in authority and legitimacy that has left a functional vacuum in every executive office throughout the land -- from the White House to the state houses, to the lairs of the CEOs, to the towers of the deans and department chairs, to the glitzy sets of the nightly news deliverers, to the makeshift quarters of the NGO chiefs. In former times, clueless and impotent leaders stuck their heads in the sand. Nowadays, with pandemic narcissism abroad in the land, the heads are more usually inserted into the aperture that leads into the large bowel...."

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Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

"Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.

" “In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.” "

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Priceless: How The Federal Reserve Bought The Economics Profession

"The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

"This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.

" "The Fed has a lock on the economics world," says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. "There is no room for other views, which I guess is why economists got it so wrong." "

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