Late Night: Banks

Via Josh Marshall at TPM:

The Times has a piece in tomorrow’s paper coalescing the growing number of experts who believe that many of the big banks are insolvent and that — whatever you want to call it — the government is going to have to step in and really resolve the crisis, through some process of seizing the failed banks, cleaning them up and selling them back into private hands.

Not good… not good at all. Count me as part of the public who thinks we have more of a mess on our hands than we know. The first sentence from the NY Times piece Josh notes is a doozie: “Some of the nation’s large banks, according to economists and other finance experts, are like dead men walking.”

Geez… This is so not good:

Nouriel Roubini, a professor of economics at the Stern School of Business at New York University, has been both pessimistic and prescient about the gathering credit problems. In a new report, Mr. Roubini estimates that total losses on loans by American financial firms and the fall in the market value of the assets they hold will reach $3.6 trillion, up from his previous estimate of $2 trillion.

Of the total, he calculates that American banks face half that risk, or $1.8 trillion, with the rest borne by other financial institutions in the United States and abroad.

“The United States banking system is effectively insolvent,” Mr. Roubini said.

Needless to say the banking industry isn’t happy about these claims. Gee… Do they think we’re happy about the mess they have made of the economy?

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About Pamela Leavey

Pamela Leavey is the Editor in Chief, Owner/Publisher of The Democratic Daily as well as a freelance writer and photographer. Pamela holds a certificate in Contemporary Communications from UMass Lowell, a Journalism Certificate from UMass Amherst and a B.A. in Creative Writing and Digital Age Communications from UMass Amherst UWW.

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