American & British Banks are Bankrupt!

• Does the title surprise you? It should not. But if you listened to MSM last year you seem to get the impression that the powers that be (PTB) know what they are doing and have a handle on the problem. This is far and away from the truth. The truth is : Insolvency ! Bankruptcy !
   
• No amount of shilling, propaganda and delusional optimism can shield us from what is about to happen. We are going to see a massive collapse of the financial system soon. GEAB and Celente give the timeline : by end of Q1 2009. (see my earlier postings)
   
• The truth is the bailout money is now exceeding all the capital of the banks! And it does not look like it is working. Politicians are already hinting of more bailouts to come. Esteemed economist Noriel Roubini says in Roubini Predicts U.S. Losses May Reach $3.6 Trillion :
    
  U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.
   
  “I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”
   
  Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007, according to data compiled by Bloomberg.
   
  President Barack Obama will have to use as much as $1 trillion of public funds to shore up the capitalization of the banking sector, following the $350 billion injection by the Bush administration, Roubini told Bloomberg News. Congress last year approved a $700 billion rescue fund, of which half remains to be disbursed. ….
    
  “The problems of Citi, Bank of America and others suggest the system is bankrupt,” Roubini said. “In Europe, it’s the same thing.”
   
• So they are effectively insolvent. It means they are bankrupt ! At least Professor Roubini has the courage to say it publicly. Not so for the other MSM analysts.
   
• Someone please explain to me why anyone will recommend or buy banking stocks? 
   
• Our friends across the ocean that can’t speak  proper English (Heh Heh), the British, are in no less deep a shit hole ! British banks are ‘technically insolvent’  :
   
  Britains biggest banks are “technically insolvent”, Royal Bank of Scotland said yesterday, as the global banking industry was rocked by another day of turmoil, including the announcement of $23bn (£16bn) of new losses from Merrill Lynch and Citigroup, the giant US institutions.
   
  Analysts working for RBS, one of several British banks to have received emergency funding from the UK Government last year, told the City that “the domestic UK banks are technically insolvent on a fully marked-to-market basis”.
   
• Them British fellas are catching on pretty fast. They are learning doubly quick from the FedRes :
    
  The urge to coverup what one ought not be doing is immense. That fact helps explain Plans To Allow Secret Printing By The BOE. The Bank of England will be able to print extra money without having legally to declare it under new plans which will heighten fears that the Government will secretly pump extra cash into the economy.
   
  The Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet – a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel’s Government in 1844 which originally granted the Bank the sole right to print UK money.
   
  The ostensible reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future, under its Special Resolution Authority. However, some have warned that it means: “there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses.”
   
• Yep ! Gordon Brown is getting callouses on his testicles juggling knives and axes with both hands and feet. Gordon Brown brings Britain to the edge of bankruptcy  :
      
  They don’t know what they’re doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious.
   
  Yesterday marked a new low for all involved, even by the standards of this crisis. Britons woke to news of the enormity of the fresh horrors in store. Despite all the sophistry and outdated boom-era terminology from experts, I think a far greater number of people than is imagined grasp at root what is happening here.
   
  The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic.
   
  The political impact will be seismic; anger will rage. The haunted looks on the faces of those in supporting roles, such as the Chancellor, suggest they have worked out that a tragedy is unfolding here. Gordon Brown is engaged no longer in a standard battle for re-election; instead he is fighting to avoid going down in history disgraced completely.
   
• Andrew Grice is also pretty descriptive ‘This is like giving the kiss of life to a corpse’ :
    
  The Government does not know whether the second bank rescue package it launched yesterday will work, senior ministers admitted last night. “The truth is that we can’t be sure whether it will be effective,” one told The Independent. “We have to look calm to try to instil some confidence in the system. But we don’t know what will happen next. No one can be sure that this is the end of it.”
   
  Another added: “We are in completely uncharted waters. The position is changing all the time.”  Gordon Brown and Alistair Darling claimed the second bailout did not mean the first package they unveiled last October had failed. That deal, they argued, was about preventing banks from going bust; yesterday’s was about ensuring they had the confidence to lend to businesses and the public.
   
  Ministers struggled to explain why, if the new package was not a “blank cheque”, they could not disclose how much it would cost taxpayers. Officials dismissed talk of a £200bn bailout, saying some measures had a low risk and figures were still being calculated. 
   
• “the second bailout did not mean the first… had failed” . Sure if you say so! Pigs can fly ! Their only problem is landing ! Water Boarding is not torture ! It is a recommended medical procedure to cleanse your GI tract ! Sure sure if you say so. Go ahead and cleanse your own GI tract. My gut and my ass look pretty clean the last time I checked!
   
• So are we in the 21st Century Great Depression or not ?? Ambrose Evans-Pritchard: Monetary union puts half of Europe in depression :
   
  Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch. Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.
   
  A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece’s social fabric is unravelling before the pain begins, which bodes ill.
   
  Each is a victim of ill-judged economic policies foisted upon them by elites in thrall to Europe’s monetary project – either in EMU or preparing to join – and each is trapped. 
   
• The 2nd bailout of this past week is a major alarm ! A big fire alarm went off worldwide. For those who do not understand : Major financial collapse worldwide ahead ! Much worse than in October last year. It looks like it will be even more rapid. Those who are asleep will be stunned, much like the world was stunned in November and December on how rapidly things can go to hell ! Jim Willie in Gold, Zombie Banking System, Lightening, Earthquakes and Hurricanes :
   
  WHAT COMES NEXT IN THE UNTIED STATES AND THE GLOBAL ECONOMY WILL INVOLVE CONSIDERABLE DESTRUCTION AND NOTABLE DISLOCATION TO FINANCIAL STRUCTURES, AS IN FINANCIAL MARKETS, PRICING SYSTEMS, AND NATIONAL ECONOMIES.  ….
   
• The Light at the End of the Tunnel ? It’s the Train coming at you !

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