Indeed, Citigroup would easily be seen as bankrupt if its SIVs were brought back on the balance sheet and all of its assets marked to market. The same applies to dozens of other banks as well. The entire US banking system is insolvent. And if you read between the lines, that is exactly what Bernanke said yesterday.

Although a little prone to hyperbole (or maybe just excess vitriol? And who doesn’t like a bit of hyperbolic spice in their news anyway.), I’m starting to think that Shedlock may be right. And endless succession of people saying it’s getting better as we watch it get worse. I hear squawking about “you gotta have faith in the market, and the market will come back.” I’m pretty sure I was told lies as a child by Peter Pan (the government), who believed in Neverland (the market), and as long as I believed too, with a little fairy dust (credit), I would be able to fly to ever new heights (profit!). I guess I’m a bit prone to the hyperbolic signal amplifier myself, if I’m now comparing the Peter Pan and George W. Bush. In any case, only time will tell. I hope for the best but I never forget the worst (there’s a reason you never forget to not stick your hand in the fire).

This entry was posted on Wednesday, January 14th, 2009 at 21:04.