Chart of the Week: Banking Not Out of Woods

One thing US Person learned while "standing in line for law review"* is that ratified treaties like the Geneva Conventions, and the Convention Against Torture are part of the supreme law of the United States. But hey, that principle didn't stop Justice Department attorney John Yoo from sucking up and giving the Charlatan the legal green light for torture.  But he was sincere about his extremist legal theories according to an executive review of the internal ethics investigation, so that makes all the difference--no disbarment for Yoo. Hitler was sincere about hating the Jews, and passed the Nürnburger Gesetze to facilitate the industrialized extermination of six million.

But it's difficult to drive a vehicle while only looking in the rear view mirror. Perhaps that is why so many people have difficulty parallel parking. Most economic charts are similar to looking in the rear view mirror: they can only tell us where we have been. This chart shows the trend in banking failures from last year:

The slope of the short red line for 2010 is not encouraging. So far there have been 20 bank failures the largest number in 17 years. Experts expect that 2010 will be the year in which hundreds of banks fail.  The problem of Main Street bank failures could be even larger than the crisis which beset Wall Street in '08. This chart courtesy of InvestingContrarian.com attempts to look through the front window to see what the magnitude of bank closures could be by positing a correlation between unemployment and the number of bank failures:

Bank failures peaked six years after unemployment peaked in 1983. Unemployment is now just above that level with no clear indications that it will turn down soon.

*an urban myth