Bankrupting Leverage: Are We A Zombie Nation? »
Posted By paisano1 8 months, 3 weeks ago in NewsGiven the excess of leverage, they will likely zero out as well. Even if all bank debt for money-center banks is converted to equity, state-sponsored capital injections will likely be enormous. For Fannie and Freddie, there is no such thing as disposable debt holders. Our credit worthiness depends upon us honoring their debts. All their losses go straight to Uncle Sam. The losses will be mammoth. Generally what we need is to build a bon fire and burn to the ground ten or 20 or 30 years of manic lending. Debt must be welshed on in numerous trillions. Alan Greenspan recently approved of bankruptcy for money-center banks (nationalization), but said bond holders of seized banks require a guarantee. The view from the tundra does not support this guarantee.
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