Are The Banks In Trouble?

By Mike Whitney

     “The new capitalist gods must love the poor – they are making so many more of them.” Bill Bonner, “The Daily Reckoning”

 

The hope of every central bank is that the real problem can be kept from public view. The truth is that the public—even professionals on Wall Street—have no clue what the real problem is. They know it has something to do with derivatives, but none of them realize that it’s more than a $20 trillion mountain of unfunded, unregulated paper that has just been discovered to not have a market and, therefore, no real value… When the dollar realizes the seriousness of the situation—be that now or sometime soon—the bottom will drop out.Jim Sinclair, Investment analyst

09/07/07 “ICH“- — -About a month ago, I wrote an article “Stock Market Brushfire: Will there be a run on the banks?” which showed how the collapse in the housing market and the deterioration in mortgage-backed bonds (CDOs) in the secondary market was creating difficulties for the banking system.  Now these problems are becoming more apparent.

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