From Bob Chapman's International Forecaster:
Super Losses, Super Layoffs, Super Bailouts
Posted: July 23 2008
Financial sector statements dont add up, FDIC reserves pounded hard from IndyMac debacle, bailouts will soon come at the expense of the consumer, bond market watch, realities of a debtor nation, financial institutions given protection from shorting
So far this week we saw Wachovia get socked for an $8.86 billion loss with a layoff announcement of 10,750 employees, while Washington Mutual got hammered for a $3.3 billion loss and increased its beleaguered loan-loss reserves by $3.74 billion to $8.46 billion as it announced expense cuts and asset sales. This is nothing. This is just the beginning. This is just window dressing to protect incumbents. Together with the science fiction and fantasy we got last week from the banking sector, these latest financial statements from the banking sector should receive a Nebula Award from the Science Fiction and Fantasy Writers of America. Gene Roddenberry could not have dreamt up financial statements that were more phantasmagoric.
All these bank losses, as terrible as they are even in their understated amounts, are pathological accounting lies aimed at keeping the sheople from going ballistic on the incumbent scum-bags in Congress so that these corrupt reprobates and sociopaths can continue in office and maintain their rape, pillage and slaughter of the sheople of the US unabated on behalf of their evil, malevolent and rapacious Illuminist masters.
The stock markets, the bond markets, the derivative markets and the entire financial system would collapse if people knew the real truth about the balance sheets, income statements and debt-to-equity ratios of virtually all the major commercial and investment banking fraudsters of Wall Street. So the devastating truth will be withheld most likely until the final quarter which ends in December, because a good portion of the earnings results for the third quarter are going to be announced prior to the US general elections which would normally be held in early November, barring some false-flag attack. Until then, the huge whitewash reservoir behind the "creative accounting" dam will be sucked dry. We're not sure if there is enough whitewash left on the planet to cover up the losses for Q3, however.
Wait until the Pick-and-Pay loans all run their course. Ugly does not even begin to describe what is going to happen to many large banks when this jumbo variety of toxic waste comes home to roost on their financial statements. We doubt that the FDIC has enough funds to cover even the first ten to twenty banks that fail out the many hundreds that are expected, especially if a large bank like Wachovia goes under in the early going. Already, IndyMac has wiped out 10% of the FDIC's reserves. Depending on how the IndyMac liquidation goes, that percentage could go higher. And remember, IndyMac was not even on the FDIC's watch list. If that doesn't scare you, nothing will.
What will happen if the FDIC runs out of money? Will they get a big government bailout like the rest of the fraudsters? Of course not. That would benefit the banks' customers instead of the banks themselves. We certainly could not have that now, could we? Will the FDIC bailout money come from the source it is supposed to come from, meaning from the fraudsters themselves, most of which are now insolvent and bankrupt? It's a stupid question, of course, but we had to ask it for rhetorical purposes.