Best Collapse EVAH!
Denninger continues his deep rectal examination of the FDIC, started here, with these entries from over the weekend:
One of Three Down: Is the FDIC Still Solvent?
Treasury, FDIC, and More: How Many Lies?
Sunday Lesson: Why "Normal" Will Not Return
Mish Shedlock weighs in here on the same theme: As of Friday, August 14, 2009, FDIC is Bankrupt. Money graf:
...We believe the main reason for this observation lies in a de facto relaxation of accounting standards, even before the FASB 157 amendment on March 15th earlier this year. Basically the relaxation allows banks to only write-off parts of their losses due to market impairment and they may themselves decide a fair price that the asset could have been sold for during normal market conditions to keep in their books. Allowing banks to control how they mark-to-market their assets, will likely backfire and when they ultimately end up failing, imply greater closure costs for the FDIC. From the graph [below] one can infer that the average yearly DIF costs/bank assets have increased at an alarming rate to almost reach 31% in 2008 and 2009...
Read 'em all and pass 'em on, along with this piece from Saturday's UK Telegraph, courtesy of Ambrose Evans-Pritchard. Key quote:
...Mr Janjuah said governments might put off the day of reckoning into the middle of next year if they resort to another shot of stimulus, but that would store yet further problems. "If what I fear plays out then I will have to concede that the lunatics who ran the asylum pretty much into the ground last year are back in control"...
Don't place your safety and that of your tribe in the hands of crazy people.
Things are getting worse.