Banks are desperate for cash, and contrary to public statements( lies ) of Treasury Secretary Geithner, Bernanke, Obama and others, these banks/firms are bankrupt. Toast. Tapioca.
They are selling anything on their books for anything they can get because they desperately need it now....and...they think that prices will crash in the future. It is a race for the door before the whole thing crashes, only they all know it, and we are being spoon fed big bowls of shinola and told it is sunshine. ( I know it’s hard to believe that our political and financial elites would do such a thing, but what can I say? )
If they had to liquidate today, you are absolutely correct, they would be bankrupt regardless of what the government says.
The paradox here is that by pretending, for the sake of the country, that they are solvent, in as little as 12-36 months, the profits generated every day that passes will be enough to plug the capital hole on the balance sheets, making up for the losses.
In other words, it’s like a teenager who has trashed his parent’s house. If the parents show up and lay down the law, there will be consequences. If, instead, they go spend the night at a hotel, show up the next morning like nothing happened and the house is put back together, the problem is solved (well ... the house problem is solved - you still won’t trust the teenager, or bank, because you know they’re prone to misbehaving).
Every day, more dollars are getting pored back into the balance sheets. It is merely a matter of time before the capital has been replaced and all is well with the world. Except for the dollar, which I maintain cannot stand the assault of $9+ trillion in deficits over the coming decade.