10 March 2009

Banks Exposure to Risky Derivatives Surges

So the latest regulatory filings show that the big 5 banks exposure to risky financial instruments has exploded, which means that their potential losses have exploded, and so the possibility of being insolvent has increased.

I'm particularly concerned about when the lines cross, which is JPMorgan, and Citi, though it probably applies to Bank of America too, because this graph does not include the derivatives and other financial time bombs that it acquired when it bought Merrill Lynch.

Of course, Geithner and Summers just think that these assets are "artificially" depressed, and so the banks really are solvent.....Tools.

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