When the government takes hallucinogenic drugs....

Joint Statement from Treasury et al.


A few excerpts that demand a response:

"The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses."

Commentary: The gov't stands behind the banking system as long as Chinese and foreign bond holders will buy US gov't bonds. What they really mean is "please Mr. Hu Jintao buy our bonds or else we will monetize our debt, devalue our dollar, and you will get back only cents on the dollar."

"We announced on February 10, 2009, a Capital Assistance Program to ensure that our banking institutions are appropriately capitalized, with high-quality capital."

Commentary: Partly finished condos and repossessed houses in Phoenix with no carpets and plumbing are really high-quality assets.

"Currently, the major U.S. banking institutions have capital in excess of the amounts required to be considered well capitalized."

Commentary: If you lower the standards enough, and include assets valued at three times market value.
Ever consider what would happen if the US gov't couldn't bail out some of the bigger institutions??
Imagine this: Patient - Doctor, I'm sick. Doc - What have you got to pay me for the examination? Patient - I've got three chickens and 10 pounds of potatoes. Doc - Throw in another 5 pounds of potatoes and you've got a deal.