Im shocked the stocks are worth anything. It’s only the promise of government invervention on either the bailout or nationalization level that is keeping them afloat.
They issued trillions in paper and converted that paper *into* their assets. They have *no* actual assets against the trillions in redemptive paper they’ve issued.
They are catastrophically insolvent.
300 billion into the Citigroup blackhole meant 300 billion in cash was converted at the teller window in exchange for a 300 billion in their outstanding liabilities.
The Government can pour trillions into them. It’ll vanish the next day out the withdrawel window, and in exchange they’ll have fulfilled not a 10th of their outstanding obligations.
Phelps Calls Treasury’s Toxic Asset Plan a `Non-Starter’