Is the fairy tale is about to end?

Bank of America last night continued the earnings "fairy tale" of US banks. With free money from the government, front row seat at the market manipulation table and right to record toxic crap assets at any value they like with the changes to mark to market accounting rules.......how could BoA, Citigroup, Goldman Sachs, JP Morgan et al not make money (on paper only)? Funny how each of these banks are owners of the private institution that bailed them out.....The Federal Reserve....and have former executives running the US Treasury. This cartel arrangement stinks. The sooner we see the abolition of the Fed, bankruptcy of their member banks and removal of corrupt "Government Sachs" employees in Treasury the sooner we will see real economic recovery.

Comments from LeMetropole Cafe suggest the recent fairy tale may be about to end...

We know that using very aggressive (e.g. unrealistically low loan loss reserves) and several other one-time or questionable accounting tricks, that Bank of America's reported profit of $4.2 billion is an utter and complete fairy tale, if not outright fraud. Once the 10-Q is filed, I'll be able to go thru and recreate BAC's earnings using realistic accounting assumptions and stripping out one-timers. The question I have, in the context of BAC CEO Ken Lewis expressing disgust on CNBC that BAC stock is down 23% today, DOES KEN LEWIS REALLY TRULY BELIEVE THE NUMBERS HE HAS SIGNED OFF ON TODAY? If the answer is yes, he is the epitome of managerial incompetence OR the world's biggest liar...


There's definitely really bad news of some sort coming our way. The insurance companies are getting destroyed relative to the banks today. Also, the last time the dollar rallied in a big way alongside gold/silver, the stock markets tanked, and 1/3 mo T-bill yields approached zero was late last December/early January. This tells me there is some kind of de-leveraging occurring by funds globally, as they are dumping crap assets, need to buy dollars in order to make payments on their dollar-based liabilities, and running to safety. Probably one of the reasons the Fed did currency swaps with England and Europe recently.

The Turner Radio Network has obtained "stress test" results for the top 19 Banks in the USA.

The stress tests were conducted to determine how well, if at all, the top 19 banks in the USA could withstand further or future economic hardship.

When the tests were completed, regulators within the Treasury and inside the Federal Reserve began bickering with each other as to whether or not the test results should be made public. That bickering continues to this very day as evidenced by this "main stream media" report.

The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.

1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.

3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.

4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.

6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!

7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!

The debt crisis is much greater than the government has reported. The FDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter.

Put bluntly, the entire US Banking System is in complete and total collapse.