Obama “Fixed” the Crisis. So Why Do We Keep Getting Depression-Type Numbers, Month After Month? – Wall Street Underground

By Nick Guarino | March 8, 2010

Look, this wipeout started a year ago. It was a no-bullshit wipeout. The world’s biggest banks collapsed. The world’s biggest economies fell. Some of the largest corporations on the planet went bankrupt.

Yet now they want to tell you everything is okay. They fixed it. In just a few months.

Bullshit! They didn’t fix a damn thing. All the money-losing derivatives are still there. Bigger, badder, losing more money than ever. The only change from last year is that they can now legally hide their losses. That is what the new government-approved accounting tricks, that are little more then institutionalized fraud, let them do.

Ask yourself this. In a year, what has changed? All they did was paper over the losses. They leveraged their portfolios even more. And still the losses, defaults and bailouts continue.

Remember how bad the mortgage crisis was? Remember the huge derivatives losses, because people weren’t paying their mortgages? Now the problem is ten times worse. They’re losing ten times as much money! More people are not paying then ever before.

Has the housing crisis abated? No. Have the derivatives losses been reversed? No. The banks are borrowing even more money, to cover up their mounting losses. They have been able to do this — till now — because enough fools believe this is a recovery.

They are committing the cardinal sin of finance. They are trying to borrow their way to profitability. Like using one credit card to pay off another. At the exact time, their losses are mounting like never before.

At the very end of last year, U.S. banks went to the market en masse. They issued stock and borrowed $150 billion more. They used some of those funds to pay back the TARP.

This gives new meaning to robbing Peter to pay Paul. In this case, the bankers have robbed their shareholders to pay Uncle Sam… and to give themselves HUGE, record-breaking bonuses in the new year!

Debt levels now are higher than they were a year ago, during the first crash. Home prices are way less than they were then. So is home equity. And now the wipeout has spread from individuals and corporations to sovereign governments.

These governments are critical pieces of the world economy. Of the global financial system. They will begin to fall like dominoes.

Round two of the debt wipeout is starting. This phase of the wipeout will be far worse than the first.

Bank of America just posted another $2.24 billion in losses. Its losses keep getting bigger and bigger. Do you think Citigroup is any different? Or Wells Fargo? Or any of the other big banks? How about AIG?

They have all gone back to the markets to borrow even more money. This time they hid it, by paying off the TARP loans. Like I said, they are borrowing from the public to pay off Uncle Sam… and cover their ever-increasing need for cash.


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