You can do the same calculations for nearly every major financial institution in the world. The amount of bondholders and equity coverage varies somewhat, but in virtually every case, bondholder and shareholder capital of these institutions are more than sufficient to absorb any losses without the need for public funds, provided that the objective of government policy is to protect the people and the long-term viability of the economy, rather than defending the existing owners, bondholders, and managements of these institutions. Make no mistake – that choice is what the oncoming crisis is going to be about.
This is from the latest Hussman Weekly Market Comment. The full thing, as usual, is well worth a read. He also explains why leveraging the European Financial Stability Fund (EFSF) with ECB money is a bad idea.
Should we really be surprised that protests in Wall Street about Wall Street has started? The surprise is that it took so long.