Is the Fed Now Losing Control?

I want to share this … found while researching for my tax policy paper. This chart is frightening. There is more on the post.

FT Alphaville » Blog Archive » Losing control.

Bank writedowns

“Itâ??s Bloombergâ??s chart of the day and has been reproduced by Paul Kedrosky on his blog, Infectious Greed. Kedrosky writes:

“The following more or less supports what some have been saying for a while â?? that major banks in the U.S. and the U.K. will end up being entirely nationalized before this crisis is over â?? but itâ??s still a striking way of looking at the data. The gist: Government recapitalization and other fund-raising has largely been in service of banksâ?? prior subprime losses, while corporate and consumer loans are just starting to hit bank balance sheets. It wonâ??t take much to tip banks over into insolvency again.”

This is frightening stuff. Not least because the Fedâ??s own balance sheet is not looking healthy.”