Monday, April 6, 2009
US banks insolvent, system 'a Ponzi scheme'
America the Tarnished
Paul Krugman, The New York Times: These days America is looking like the Bernie Madoff of economies: for many years it was held in respect, even awe, but it turns out to have been a fraud all along.
Financial Post: The US economy is in for 'a lasting slowdown' and won't recover this year, while 'the banking system as a whole is basically insolvent,' billionaire investor George Soros told Reuters Financial Television Monday... Mr. Soros also said the US dollar is under pressure and may eventually be replaced as a world reserve currency, possibly by the IMF's Special Drawing Rights, a synthetic currency basket comprising dollars, euros, yen and sterling.
With guest William K. Black, former Director of the Institute for Fraud Prevention:
Moyers: So you're suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?
Moyers: You're describing what Bernie Madoff did to a limited number of people. But you're saying it's systemic, a systemic Ponzi scheme.
Black: Our system...
Moyers: Our financial system.
Black: Became a Ponzi scheme.
Moyers: Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?
Black: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent... that we'll run screaming to the exits. Video here.
Image source here.