Are We Broke Yet?

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ARE WE BROKE YET?….Yesterday, Nouriel Roubini estimated that U.S. banking losses related to the financial meltdown will eventually come to about $1.8 trillion. Of this $1.1 trillion comes from loan writedowns and $700 billion comes from losses on securities. Since current total bank capitalization also amounts to about $1.8 trillion, this “leaves the U.S. banking system borderline insolvent if our loss estimates materialize.”

Oddly enough, I almost find this comforting. First, since this is Roubini talking, this is probably a worst-case scenario. At least we’re only borderline insolvent! Second, U.S. banks are still operationally profitable, which means that by the time all these losses are recognized the system will probably once again have a net capital position of half a trillion dollars or more. Third…..

Well, there is no third — a banking system can’t survive on only a few hundred billion dollars in capitalization. This is pretty sucky news, and obviously it’s suckier for some banks than for other. If Roubini is right it means the mother of all deleveragings still has a long ways to go, and if the Fed and the Treasury agree with his estimates, Citigroup and Bank of America might not have long to live.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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