Wednesday, February 11, 2009

Welcome to Banking Hell

Today, the CEOs of the major banks arrived in Washington, D.C. on Amtrak to testify before Congress they are sorry about past malfeasance and really are trying to lend out money to get the economy rolling—which I doubt anyone believed.

Here's the situation: there is $330B in TARP bailout money left, there is about $850B of newly created base money sitting in bank reserves they could fall back on, an unknowable but estimated $2-3T of toxic assets, and a taxpaying public growing more outraged by further bailout money for the financial industry. So, that's nearly $1-2T or so of vaporized wealth that banks somehow need to wiggle out of. And that's just for mortgages.

I had no doubt the original TARP would breeze through Congress. Now, finally, things may be getting interesting.


East.Bay.Miser said...

I didn't know they rode Amtrak. I suggest the next set of CEOs to testify bike in on American made road bikes if they can be found.

SF Mechanist said...

Yeah, maybe the Oil CEOs when they run outta money. That would be fun... if only it were closer to home we could all join them and make an event of it. =)