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Pastimes : The Philosophical Porch

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To: Crimson Ghost who wrote (4300)	8/3/2009 9:01:46 AM
From: Rarebird	Read Replies (3) of 26251

By pumping up the banking system and trying to keep the corrupt game going, the government has used up a lot of capital in defending the economy. When all that injected capital is destroyed, will there be the will to inject even larger amounts of capital in the future? I suspect that Treasury Secretary Timmy Geithner will not be able to persuade the Congress of the need for more capital, especially since it will be clear that the previous round was misused and failed to provide more than a temporary patch for a financial balloon that will be continuing to deflate. There are financial institutions which have gotten too big to fail. But, there are financial institutions which have grown too large for their governments to save as well. Goldman Sachs and Morgan Stanley are two that occupy the top of the list. The latter has an exposure of more than 100 Trillion Dollars in toxic derivatives - that's too big for the US Government to backstop if the market gets another leg down in Financial Armageddon. I'm still looking at August 5 as a critical turn date.

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