I’d like to welcome The Market Guardian to our site, starting with a question and answer regarding our banking system’s solvency, or insolvency.
Is Our Banking System Really Insolvent?
Courtesy of at The Market Guardian
First off a bank with a positive cash flow is not insolvent, as it will be able to meet its liabilities as they come due. Insolvency is when a business has insufficient assets to cover liabilities. This whole crisis was created by mark to market accounting and in my opinion could be resolved at any time by permitting and requiring banks to mark their assets based on projected cash flows. Geithner WAKE UP!
There are a ton of people who plan to make a lot of money if they can force a fire sale of bank assets. These criminals are extraordinarily devious, cunning, manipulative, and selfish. I can’t think of any reason to cater to their interests. There will be a time in the very near future, after we’ve inflated the heck out of our economy and totally devalued our USD, that assets will have the be ‘written up’, yes UP. But of course, nobody talks about it. For some reason people are convinced that banks will never lend again, nothing is going to improve again, and our stock market will go to zero.
I read and article yesterday about European banks holding $24 trillion in toxic assets. That gives you a small hint at how big the problem is in the US. It is SO big that the US Government simply cannot afford to pick up the tab.
We need to bring the banks back to basics and remove the problems. Right now it seems the only way to do that is with the naughty word “Nationalize” them. WE need FULL TRANSPARENCY, shows us the money and get this over with NOW!
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I asked Braunie what he meant by "a ton of people [criminals!] who plan to make a lot of money," and he wrote back:
LOL… I was basically talking about the Hedge Funds. I despise the lack of regulation on them so I was referring to them as we all know they are short all the major banks.
Today, the hedge fund industry is comprised of over 9,000 hedge funds that manage over $1.1 trillion in assets. They have the ablility to short stocks in hefty amounts. In spite of this major presence in our financial markets and our economy as a whole, hedge funds are not subject to disclosure and transparency rules that apply to other financial intermediaries, and are permitted to operate almost completely unfettered by government oversight or regulation.
