Hello,
Creditwrench has just posted in the CreditWrench forum of CreditWrench under the title of T system in crisis Let the bank runs begin!.
This thread is located at http://www.creditwrench.com/consumers/showthread.php?t=3861
Here is the message that has just been posted:
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Is the American banking system in a crisis situation as this author suggests?
*Let the bank runs begin!*
*By Patrick Wood, Editor
September 15, 2008
*
*The immediate aftermath of the Lehman Brothers bankruptcy will be a massive and manic flight to liquidity and withdrawal of funds and credit from banks, S&L's, insurance companies and brokerages, _leading to more failures_.
*
*Nothing can stop it at this point.*
*The stunning magnitude of debt owed by Lehman Brothers** - $613 billion -- _comes to light because of their public bankruptcy filing_. No wonder that Barclays, Bank of America and other potential buyers took a few sniffs at Lehman's books and walked away.
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*The Lehman Brothers bankruptcy is the largest in the history of the world.
*
*Banks around the world who lent money to Lehman must absorb immediate and huge losses of capital and liquidity**. Even if they eventually recover some of their money, _they won't have access to it until the bankruptcy is completed_.
Insurance companies (like AIG) who issue insurance contracts against financial failure and non-performance are next on the chopping block. Policyholder claims could quickly overrun their ability to make good.
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*Investors have figured this out already.
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*_They paid almost $70 per share for American International Group (AIG) last October_. Today, some of those could have sold their shares for under $6.00 per share, _a drop of over 90% in one year_.
And who will rescue Washington Mutual (WaMu)?
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*WaMu is the largest savings-and-loan in the United States**, _and is currently unable to raise additional capital_. Lenders and insurance companies are backing away.
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*Investors loved WaMu last October when they paid over $37 per share. They could have sold the same shares recently for $2.01 per share, _for a loss of 94%.
_*
*There are a host of other financial institutions that are on the ropes as well.
*
*American investors and politicians laughed at Fortis Bank** _when it released this report on June 28, 2008_:
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*BRUSSELS/AMSTERDAM - Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion. "We have been saved just in time. The situation in the US is much worse than we thought", says Fortis chairman Maurice Lippens. _Fortis expects bankruptcies amongst 6000 American banks which have a small coverage curre_ntly. But also Citigroup, General Motors, there is starting a complete meltdown in the US"
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*_American sentiment is rapidly changing_: Six thousand banks is a long way to go!
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*When chickens discover a blemish on an otherwise healthy chicken, _they will immediately attack it and peck it to death_.
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*The global financial market players are just as merciless**.
*
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