[lbo-talk] the Grundrisse and credit

[nathan tankus]

Chuck Grimes said..."In an intuitive fashion the slogan, The banks got
bailed out, we got sold out, captures the essential point, but that
doesn't quite grasp that much of the financial sector would have gone
bankrupt, except for the massive injection of Treasury and Fed
subsidies. "

Almost, the thing is though, they are still bankrupt (as in they have
highly negative equity). In normal cases banks that have too little
(or negative) equity get put into receivership (called nationalization
by alarmists) by the FDIC. If this doesn't happen, these banks can
still clear checks and function normally with negative equity because
of deposit insurance and the market expectation that the feds won't
foreclose on them. In short "The banks keep on getting bailed out, we
keep on getting sold out"
-- 
-Nathan Tankus
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