Now we see real reporting instead of the puff piece on Bloomberg yesterday:
In a move that confirmed the suspicions of many analysts, the agency called off plans to start a $1 billion pilot program this month that was intended to help banks clean up their balance sheets and eventually sell off hundreds of billions of dollars worth of troubled mortgages and other loans.
Many banks have refused to sell their loans, in part because doing so would force them to mark down the value of those loans and book big losses. Even though the government was prepared to prop up prices by offering cheap financing to investors, the prices that banks were demanding have remained far higher than the prices that investors were willing to pay.
Translation:
The banks are still carrying these "assets" at well-above their actual market value. This means their balance sheets are showing them to be healthier than they really are.
Read on...
This is a fairly straight forward and understandable explanation of a large part of the current financial/credit crisis. The bank regulators are allowing American banks to do exactly what the Japanese did with their banks for more than 10 years. BTW the North American financial press excoriated the Japanese for doing this for more than 10 years. Now the financial press and the main stream media are colluding with the government, the banks, and the regulators to hide this information from the sheeple. The game is rigged. The banks are insolvent. Denninger says when the banks finally and inevitably explode everyone is going to lose every cent they have in the bank. Peacenik is digging a hole. You should too.
