Western Rifle Shooters Association

Do not give in to Evil, but proceed ever more boldly against it

Friday, September 12, 2008

I'm Sure They Have It All Under Control

Added today to our blogroll in honor of the end of the USSRA's first week of business is Mish Shedlock's Global Economic Trend Analysis blog.

The pending Lehmann Brothers debacle is a good reason to start your Mish reading with an article he published last July, entitled "You Know The Banking System Is Unsound When....".

Read the whole 25-point indictment (including the embedded links), but I'll give you the punch line:

25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.

What cannot be paid back will be defaulted on. If you did not know it before, you do now.

The entire US banking system is insolvent.

Anyone think the Freddie/Fannie bailout has made things better since that article on the banking system was published in late July?

Anyone believe that the US banking system can go belly-up without taking down the rest of the world?

And for those readers who are wondering what all of this economic bravo-sierra has to do with shooting and freedom, do you think a global banking collapse will make it less likely or more likely that you will be forced to use all that cool mall-Ninja gear in deadly earnest, either to repel boarders or, worse yet, those who claim that they're "here to help you"?

Tempus fugit.


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