Banking System Insolvent Says Senator Corker

[Post Summary]

Nor is the ear filled with hearing.
—Ecclesiastes

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Other than the LaRouche Political Action Committee, apparently I am the only other person on the entire world wide web who found newsworthy remarks made by Senator Bob Corker (R-TN) on the floor of the U.S. Senate on January 21, 2009.

Indeed, I had to search the Congressional Record to find anything even remotely close to conveying the potency of the message Senator Corker delivered. I take this as an indication of how potentially explosive Senator Corker's remarks could prove were they given fair play in the mainstream media.

Which makes what you are about to learn all the more juicy.

Here's a taste of what the U.S. Senate (and many others in the private sector) already know...

"... over the last 6 months we have wrestled with ways of dealing with the credit markets in our country. I wish to tell my colleagues it is my belief the boards of banks throughout our country are in boardrooms today and are in conversations throughout the country talking about the fact that their banks are actually insolvent. They know they are insolvent, but because of the way gap financing accrues to banks who make whole loans, they are able to actually meter those losses out over quarters into the future, knowing that today they are insolvent.

"... I talk to investors on Wall Street who are involved in these institutions in major ways. They know they are insolvent. They know we are just pushing this down the road.

"... It is my belief we have a number of banks in this country—large banks, banks that we know and respect—that need to be seized, that right now need to get down to a base level where normal investors would be willing to invest in these banks. The longer we put this off, the longer we are going to be away from actually solving the root cause of this problem.

"... I hope what we will do as a body—and as a country—is tell the American people we realize many of our financial institutions are insolvent. We realize the problem could be trillions of dollars, and until that issue is dealt with in a serious and real way, anything else we do for the economy is for naught."

Banks need to be seized? What a novel idea! There's more ... all of it worthy of a free press ... all of it touching upon critical matters begging thoughtful discourse and constructive dialog.

Truth of Senator Corker's message is undeniable. Outside of resolving the banking system's insolvency "anything else we do for the economy is for naught." This, of course, is the diplomatic way of saying every other consideration — including stimulus packages, as well as efforts to update regulatory regimes so they might adequately control contemporary financial structures — is an exercise in futility until such time as the banking system is reorganized in bankruptcy...

—Tom Chechatka