Is almost EVERY bank Insolvent?
August 03, 2009
– Comments (4)
If you think about it, practically every bank in America thrived in the past 10 years by loaning to various real estate ventures. Aside from real estate, whatever else is left is relatively small. Most banks loaned out some multiple of their capital base putting the entire banking industry at the mercy of a FED induced inflated real estate market.
Unfortunately, millions of productive Americans borrowed unsustainable amounts of money to purchase a home at FED induced bubble pricing....only to see there life savings evaporate when the FED orchestrated the crash by raising interest rates 17 times and tightened credit standards. The mafia never acted so aggressively.
Due to Fed behavior, it getting clearer and clearer that commercial real estate is crashing, often 50% or more in just a few years. We know that a huge percentage of commercial was financed between 2005 and 2007. In San Francisco, over 75% of the Class A space changed hands. In many other cities the percentage was extraordinary....espectially if we include condos, land development, and shopping centers.
Many of these CRE deals were packaged and sold to smaller community banks in the form of Trust Preferreds and, in part, the reason so many community banks sprouted up all over the nation seemingly over night. Now practically everyone of those deals are in trouble.
Corus, Coloinial, and Guaranty are banks ostensibly insolvent but the FDIC refuses to shut them down in violation of the law. It is very likely that thousands of other banks around the nation are in a similar finanical position simply because aside from real estate, there was not much else to lend to.....
None of this is too hard to see. We built an economy on a credit bubble. We infected the nation with a debt burden and interest rate that is no longer servicable at current revenue runs. Plain and simple. The debt is defaulting and so is the asset base of our entire nation.
If we don't restructure the debt soon at much lower interest rates or principal levels, our economy will come to a grinding halt. New home sales have already decreased by over 80%. Hospitals will shut down. Patients will die. School districts will go broke. Municipalities will shut down. Crime will rise. Families will go hungry on an issue that was very preventable.
The Fed knows this, yet are lying to you as they let insolvent banks continue to operate and kick families out of their homes, shut businesses down, and destroy the economic fabric of our nation for a problem the FED created by recklessly lending money in insane quantities and temporary terms without giving a damm whether the borrower could ever afford to repay.
If we restructure the debt, the loans would perform and the banks would be solvent. Now ask yourself, why is the Fed INTENTIONALLY/RECKLESSLY destroying America? Because as more and more debt defaults, the asset base of America will evaporate. After all, what do you think makes up the assets of practically every pension fund, insurance company, and bank in our country.
And for those of you relying on the stock market, how long do you think high frequency trading can maintain a market with declining earnings and over 700 reported PE?
If we don't put a stop to this Zombulation madness, pretty soon there will be no economy to Zombulate....for any of us.
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