Team Fraud is screwed. Continued hyperinflationary bailout of a technically insolvent banking system (built with help from an ever-accommodating Greenspan-Bernanke Federal Reserve) is fast reaching a point where new stresses cannot be met with copious loads of helicopter money without profound negative impact.
So, with the lender of last resort all in a globally connected Ponzi scheme has reached a point of discontinuity wherein but two possibilities exist: systemic seizure or monetary tsunami. Both portend a profound acceleration in the collapse of the normal relationship between finance and the physical economy.
The U.S. Treasury, not being blind to this, is booting from its trough (i.e. TARP) those banking enterprises whose foreign creditors cannot prospectively soon overwhelm American credibility. Thus, too, today's meager banking equity support operation should be seen for what it is: little more than an act of putting lipstick on a pig. It cannot possibly last. CNBC's Shemp Monkey cannot beat his crazy drum with the insane stick long enough to keep Citigroup from collapsing.
The real pigs — FNM, FRE, AIG, GMAC — remain basket cases still in need of life support. These lie at the epicenter where the issue of solvency of U.S. Treasury debt is raised. Their vulnerability fast is becoming THE issue affecting dollar index and gold probabilities mentioned yesterday.
Look over any chart typically presented here. Do you see any technical improvement? Anywhere? So, beware an imminent abandonment of financial assets whose continued viability absolutely requires unending bailout! Treasury is acting as though it is about to come under attack.
Will Citigroup Survive 2010?
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