Banks, Solvancy, and Fraud

And US and European banks are already insolvent. When Greece defaults and the crisis spreads to the periphery that will become more obvious. US money market mutual funds will break the buck—again—and this time they will not be rescued (Dodd-Frank makes that difficult). Further, US banks are beginning to lose civil lawsuits on their rampant fraud—securities fraud, mortgage lending fraud, foreclosure fraud, insider trading fraud. Fraud is essentially the only business that big US banks know—the only thing keeping them in business. If that line of business is taken away, they are toast.
---Randy Wray via Naked Capitalism

Vitus: A bit hyperbolic maybe, but, we think, basically true. Vitus emphasis.