FEDERAL RESERVE , and SHADOW BANKING , are BANKRUPT by out2theblack

REAL WORLD EVENT DISCUSSIONS

FEDERAL RESERVE , and SHADOW BANKING , are BANKRUPT

POSTED BY: OUT2THEBLACK
UPDATED: Thursday, March 16, 2023 06:44
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Wednesday, March 11, 2009 4:15 AM

"...There has been an incestuous relationship between the traditional banking system and the shadow banking system..."

Article : http://www.globalresearch.ca/index.php?context=va&aid=12648

Nouriel Roubini, the New York University professor said [2]:

"The process of socialising the private losses from this crisis has moved many of the liabilities of the private sector onto the books of the sovereign. At some point a sovereign bank may crack, in which case, the ability of the government to credibly commit to act as a backstop for the financial system – including deposit guarantees – could come unglued."

Please read the underlined words again. "Sovereign bank" means central bank. When a central bank "cracks" i.e. becomes insolvent, "all hell breaks lose", because as the professor correctly pointed out, "any government guarantees will ring hollow and will be useless".

If a central bank goes belly up, it is as good as the government going bankrupt. Period!

In another article, Roubini admitted that the pressure on "the financial land-mine" is totally unbearable. He wrote: "The US Financial system is effectively insolvent". It follows that if the financial system is bankrupt, it is a matter of time before the "sovereign bank" goes belly up. This is a given!

He stated further that:

"Thus, the U.S. financial system is de facto nationalized, as the Federal Reserve has become the lender of first and only resort rather than the lender of last resort, and the U.S. Treasury is the spender and guarantor of first and only resort. The only issue is whether banks and financial institutions should also be nationalized de jure.

"AIG which lost $62 billion in the fourth quarter and $99 billion in all of 2008 is already 80% government-owned. With such staggering losses, it should be formally 100% government-owned. And now the Fed and Treasury commitments of public resources to the bailout of the shareholders and creditors of AIG have gone from $80 billion to $162 billion.

"Given that common shareholders of AIG are already effectively wiped out (the stock has become a penny stock), the bailout of AIG is a bailout of the creditors of AIG that would now be insolvent without such a bailout. AIG sold over $500 billion of toxic credit default swap protection, and the counter-parties of this toxic insurance are major U.S. broker-dealers and banks.

"News and banks analysts' reports suggested that Goldman Sachs got about $25 billion of the government bailout of AIG and that Merrill Lynch was the second largest benefactor of the government largesse. These are educated guesses, as the government is hiding the counter-party benefactors of the AIG bailout. (Maybe Bloomberg should sue the Fed and Treasury again to have them disclose this information.)

"But some things are known: Goldman's Lloyd Blankfein was the only CEO of a Wall Street firm who was present at the New York Fed meeting when the AIG bailout was discussed. So let us not kid each other: The $162 billion bailout of AIG is a nontransparent, opaque and shady bailout of the AIG counter-parties: Goldman Sachs, Merrill Lynch and other domestic and foreign financial institutions.

"So for the Treasury to hide behind the "systemic risk" excuse to fork out another $30 billion to AIG is a polite way to say that without such a bailout (and another half-dozen government bailout programs such as TAF, TSLF, PDCF, TARP, TALF and a program that allowed $170 billion of additional debt borrowing by banks and other broker-dealers, with a full government guarantee), Goldman Sachs and every other broker-dealer and major U.S. bank would already be fully insolvent today.

"And even with the $2 trillion of government support, most of these financial institutions are insolvent, as delinquency and charge-off rates are now rising at a rate - given the macro outlook -that means expected credit losses for U.S. financial firms will peak at $3.6 trillion. So, in simple words, the U.S. financial system is effectively insolvent."

MUCH more detail at the above-cited Link...

http://endthefed.us/

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Wednesday, March 11, 2009 4:22 AM

SIGNYM

I believe in solving problems, not sharing them.

AH, I see you found my favorite "Dr Doom"!

Late, like your discovery of Karl Marx. But hey... better late than never!

Here's his website: www.rgemonitor.com
---------------------------------
It's the end of the world as we know it, and I feel fine.

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Wednesday, March 11, 2009 4:55 AM

OUT2THEBLACK

Quote:
Originally posted by SignyM:
AH, I see you found my favorite "Dr Doom"!

Late, like your discovery of Karl Marx. But hey... better late than never! The way I see it , Karl Marx was 'old news' since nearly 150 years ago...

You do such a lovely job playing the idiot...But of course , it's such a natural fit for you , you Marxist
commie-loving pinko !

If you were in possession of any memory or intelligence at all , you'd recall that I've been subscribed to RGE Monitor ,
and quoted from Roubini for a long , long time now...

Same for Chossudovsky's Global Research...Both are good sources of information for Folk
who can handle the Truth...Or , blind squirrels like SignyM...

http://www.globalresearch.ca/

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Monday, March 13, 2023 8:08 AM

JAYNEZTOWN

SVB collapse: HSBC announces rescue deal for Silicon Valley Bank UK

https://inews.co.uk/news/svb-collapse-hsbc-silicon-valley-bank-uk-resc
ue-2204137

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Thursday, March 16, 2023 6:44 AM

JAYNEZTOWN

Dick Morris to Newsmax: SVB Bailout, a 'Crony Payoff'

https://www.newsmax.com/politics/svb-joebiden-taxpayers/2023/03/13/id/
1112107/

Ric Grenell to Newsmax: Woke Politics Led to SVB's Demise

https://www.newsmax.com/draft-stories/siliconvalleybank-climate-woke/2
023/03/13/id/1112119/

Crypto-friendly Signature Bank was facing criminal probe over money laundering concerns ahead of collapse

https://www.dailymail.co.uk/news/article-11864299/Signature-Bank-facin
g-criminal-probe-ahead-collapse-money-laundering-concerns.html

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