philipmax

America's Banks: Are They Really Insolvent?

The banks are indeed in trouble. Every dollar in loss in magnified 8 times in capital loss, so it is very easy to understand that they are teetering.

On the bright side, with the cost of borrowing from the Fed reduced to zero, the banks are making huge returns on their loan portfolio. This should generate extraordinary income which will be used to offset some of these write-downs.
The hope that the profits will shore up the loss provisions, the problem remains that no one is sure of how deep these write-downs will be.

Avery pernicious attack of greed by the banking industry (bonus plans based on business written) combined with utterly lax (negligent) oversight by regulators united to create an atom bomb that threatens to destroy the capitalist based economy.