“24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.
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.”
These are the ones that got me. First, I dont understand why he doesnt just subtract the uninsured deposits outa the total, and then state how a few billion is protecting 4+ Trillion. It wouldnt loose any effect of demenstrating how dangerous it all is, and doesnt leave any of the “bulls” to say, “But that is miss leading”. All J6pk will hear is the “BUT…..” and wont understand the real problem.
Second what the hell kinda loan allows debt to be paid back with more debt? What super genious got rich selling this snake oil?
Lastly, how many of those deposits are backed by perfectly safe prime loans from pre bubble times? My parents could pay off their house tomorrow if they so choose, I really dont know why they dont. But they will never default on that loan, Hell they could sell the gold/silver coins and end it. Not everything is gonna blow up.
