A glimpse of reality for the banks bulls:
By Daniel at 9 July, 2009, 9:26 pm
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July 9 (Bloomberg) — The Federal Deposit Insurance Corp. is unwilling to give CIT Group Inc. access to its Temporary Liquidity Guarantee Program because the commercial lender’s credit quality is deteriorating, according to people familiar with the regulator’s thinking.
The FDIC, which has backed $274 billion in bond sales under the TLGP since Nov. 25, is concerned that guaranteeing CIT debt would put taxpayer money at risk, said the people, who declined to be identified because the application process is private.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQKFt7NGGm2U
In the residential market today $5 million homes may be selling for $1 million.
The owners lose the down payments, banks lose the bulk of the popped bubble.
Multiply this by millions at all price points.
That’s the reality whatever the accounting and modeling.
And you want to tell me banks are making money hand over fist because of the yield curve and raising credit card rates on Joe Schmoe?
tarn
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