Here's a quick economic lesson, with a look at The Great Recession, lurking repos and why would anyone bank at Bank of America.

In case you missed economics in high school or college (we all did) here's a quick overview of how we got here.

This recession was not caused by George Bush's grudge war, now Obama's boondoggle-economically this war represents a 3% cash burden of our economy.

Side Note:  Medicare represents a 76% economic burden.

            More Marines die in motorcycle accidents after returning from the war and using saved up monies to buy crotch rockets that they don't know how to ride.

This recession like all the ones before it is caused by lack of savings by the citizens of the United States.  Our savings is what the Government works on money wise.  When we don't save there is nothing for them to borrow and then they have to go off shore to borrow money from other countries.

These recessions always follow times of great expansion. 

The roaring 20's was economically equal to what Vegas just went through the past deade.  A time of great economic growth where everyone had to have a house with lights modern appliances and a car.  Savings dropped and the great depression ensued.

Recovery was slow through the 30's and probably not really felt till after World War 2.  The time period of World War 2 represented the lowest point of individual savings in the history of America.  It was cured by the Government selling war bonds to encourage (force) borrowers to save money.  In the few years after the war savings returned to the highest level.  Most Americans had lived with out for so long that having money felt good and they just wanted to save it.

The 50's & 60's teetered along with the depression of the 30's and war years of rationing of the 40's fresh in everyone's minds and their desire to avoid that kind of economic pain overpowered the desire to have new things.

Late 60's and 70's represented a pretty good inflationary period.  Savings dropped as prices escalated.  Things (gas) cost more money and individual savings dropped.  We had a war almost, really skirmishes all over the world, and we had a President that locked himself in the closet till it was all over.

The result was a pretty good recession just like we have now.  Until June the recession numbers of the 80's were better.  Now we are the leader.  With out all the stimulus money to boost economic indicators we would have surpassed the Great Depression thus we are now in the Great Recession.

Reagan's boy Volker cured the 80's by raising interest rates so high that no one wanted to buy anything and thus were forced to save.  Creating money in the banks for the government to borrow and operate on and curing the recession. 

Fast forward to 91 gulf war recession, but really late 80's as baby boom children started finishing college and moving around the country settling down and acquiring.  Remember Vegas' real housing boom started 86-87-89 depending on who you talk to.  Even then we were doing interest rate buy downs from 12 & 13% to get buyers 8.5 & 9%.

More spending, more good years.  Not only did people not save for the next 12-15 years we actually went in debt.  By 2000 no one had any savings at all.  We were all living on extended credit.

As JFK said, ask not what your country can do for you, but what you can do for your country.

In other words how about saving some money so they can borrow it.  Well we have no money saved and Uncle Sam has to borrow off shore.

Pretty soon the banks realize they have no money on hand to lend to the government or anyone else for that matter and they freak out.

They quit lending, tighten credit lines, call in loans that are due, quit giving money out.  In essence forcing us to save by not giving us any money.  And like good heroin addicts on money we need credit to survive because no one has a secret stash.

So just like the sale of war bonds to increase savings, and Volker raising interest rates, the banks are now forcing savings by not lending money, calling in debts and taking back as much in assets as they can to increase their cash money position.

I love the fact the Bernanke has lowered interest rates to what is almost 0% because it doesn't matter.  No bank is giving out money so what does it matter.

Which leads us to where we are today.  The Great Recession.  Recovery comes when we have fat bank accounts of savings again and the banks feel comfortable.  And not till then is there recovery.

Which leads me to Bank of America, now the Bank of Opportunity according to their ads on TV.  Who's opportunity?  Theirs.

Bank of America could easily be identified as one of the top three culprits that pulled back credit first and was a major rolling stone in this landslide of the recession.  And on one cares.

Bank of Americas latest ploy to screw over the stupid customers that are loyal to them like lemmings headed to a water hole guarded by lions and tigers and bears.

When you use your Bank of America credit card they will now ROUND UP the change from your transaction and put it into a savings account for you.  If you are paying 2% or 6% or 12% or 22% for your credit card they are lending you money at that amount and putting it in your savings and paying you 2% to use it.

So first off Bank of America helped kill off most major development projects in Las Vegas by pulling back previously pledged monies to development projects.  They screwed over hundreds of companies on operating lines of credit and now they are ripping off their own customers to improve their bottom line.

Remember the part where they freaked out about how little amount of monies they had.  False alarm.  They only thought they were out of money, they just found a bunch of it and all is well.  Mean while they have literally bankrupt most Americans and were the leader in foreclosures of homes in America.

And they just paid out the largest bonuses to bank executives who helped them weather this financial crisis.  High Fives to all.

Speaking of Foreclosures, Nevada Legal news has began to publish a 60 day forecast of trustee's sales.  You know the ones that are a 20 day notice of sale-nothing against Nevada Legal News they do a great job, are wonderful people, are well organized- they are simply publishing what lenders are giving them to forecast the upcoming numbers.  And believe me the foreclosures are not slowing down.  The next three Mondays each feature over 1000 homes hitting the blocks for sale.  Most days run 500-700.  We are still on pace to break last years 77,000 foreclosures.

So if your worried you haven't had a shot at a $40,000 REO, don't worry there are plenty of them coming up.

In Las Vegas alone the estimated number of bank owned shadow listings is north of 50,000.  Remember these are homes that the banks have taken back but not listed with a REO agent.  The number of borrowers living in homes in Las Vegas in default that are attempting a loan mod or just quit paying is now estimated by the lending industry is double that number close to 100,000.

Employment is on the rise, tourism is down, and all economic indicators are headed south.  What do you do???

Well they say history repeats itself.  Find somebody that's 85 and ask them what they did.  The advice is a little late.  Pay cash, get rid of your debt, and save for a rainy day.   Good advice just a little too late for most of us.  I'll keep that in mind for the recession of 2025.