highalpine

The U.S. Banking System's Terrifying Balance Sheet

Mr Salmon should at least get a small grounding in how banks work before he stands on a street corner with the "End Is Near" sign. Yes there are large problems to overcome. Yes, the marks on those assets (securities) have imperiled the banking system and have torn a hole in the capital base, and the govt is stepping in, but to follow Salmon's thesis (I can't use the term "logic") on the loan problem is laughable. Prior posts (Reese and Steve W) have it right. All the loans won't go bad. Those that do will have a recovery rate (on balance) of north of 60%. Salmon doesn't speak to the reserves already held against the probability of upcoming defaults, and lastly, he ignores the earnings on (modest though they be) the earning assets to support future losses.

Mr Salmon, stick to sports reporting. Your style and depth of comprehension is more appropriate for that pusuit.