This link has been bookmarked by 1 people . It was first bookmarked on 18 Sep 2008, by Michael.
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18 Sep 08
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the Fed has no idea where interest rates should be and that micro-management of interest rates by the Fed is exactly what has been causing bigger asset bubble after bigger asset bubble.
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The banking system itself is insolvent. I listed 25 reasons in You Know The Banking System Is Unsound When.... Here are reasons 1, 24, and 25.
1. Paulson appears on Face The Nation and says "Our banking system is a safe and a sound one." If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.
24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.
25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.
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