Saturday, September 06, 2008

Gigantic Bank Run?

A comment from the comments page at The Big Picture post regarding the Funny and Freaky bailout:
Here Comes the Half Trillion Dollar Fannie/Freddie Bailout!
Cold Facts re US Banks & FDIC

A. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.

B. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.

Now this GSEs bailout?! Printing the American pesos is the last desperate measure. Next - CRISIS OF CONFIDENCE

Posted by: Sunny 129 | Sep 6, 2008 11:55:47 AM

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