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That's a nice list of figures but in a declining economy it's like giving me today's weather forecast and telling me that this means it's going to be the same in a week or two. Nobody really knows where this is going. That's why the government, as we speak, is preparing another contingency bailout of Citi. If the economy picks up, they may well recover. If it doesn't or AIG finally stops defying gravity, they'll crater.

You aren't getting it. They wrote off $50 billion that they haven't actually lost in cash terms, because they were being conservative about where it is actually going. The losses have to materialize on an epic scale just for the write-offs they took since July of 2007 to be justified. Meanwhile their carry is up to $57 billion a year.

The government will go on with bailout after bailout seeking investor confidence until they get some. If that takes 3 months and another trillion or two, that's what it takes. If if take 2 years and another $10 trillion or two, that's what it takes. But the value of monetary claims isn't going to go to infinity against real assets. The government will not let it. And a matched book financial institution earning twice on assets what it pays on liabilities isn't going to go broke. No matter how many doom mongers scream that it must, for as long as they please.