phil from Edmond

U.S Now Land of Two Economies - U.S Bank Titans and the Rest of US

Anyone wishing a good read might find FDR's first inaugural address interesting. I like "Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men."

"True they have tried (to restore business activity), but their efforts have been cast in the pattern of an out-worn tradition. Faced by a failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully to restore confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish."

Financial Crisis: Remembering What Got Us There Is Critical

This article is excellent. Your point on European banks is important. Another fact to consider is that the AIG credit default swaps supported the European banks leveraged position. Another point I would suggest is how truly benign was the US trade deficit?

The Fed was of the opinion that the US was satisfactorily repatriating these dollars. But in actuality the returning dollars were stimulating the irrational housing market.

In Europe, the banks were lending heavily to Eastern European economies.

The Fed and the G20 thought they had a workable system and were successfully transitioning China, India and Eastern Europe into the capitalist system. They were wrong.

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

Maybe we will get to bankruptcy with AIG but it will be after foreign banks are paid off. The footnotes to AIG indicated that foreign banks were holders of a large amount of CDS and were using them to meet Tier 1 requirements. At 12/31/07, AIG expected these positions to be extinguished in 18 months.