FOX NEWS

Tuesday, August 18, 2009

SOME LIGHT AFTERNOON READING

Some words of wisdom, frustration and perhpas despair from Karl Denninger. This is well worth the read.

Market Ticker

"Let's juxtapose two stories. First, from Bloomberg:

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

Ok. Now how about this one?

WASHINGTON (MarketWatch) -- Delinquency rates for loans and leases at U.S. banks increased to a record 6.49% in the second quarter from 5.58% in the first quarter, the Federal Reserve announced Monday.

So let me see if I get this right.

At 5% of non-performing loans a bank is at risk of being insolvent.

But the entire banking system in The United States had its non-performing loan ratio increase from 5.58% in the first quarter to 6.49% in the second, a record, and higher than the 5% level at which the survival of a bank(ing system) is threatened with collapse.

Hmmmm.... So should we take from this that the entire US Banking System is about to collapse?..."

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