There are much better writers than I to cover this, but I don't see any posts about it. So here goes ...
I woke up this morning to read this:
FDIC seeks to triple Treasury Dept borrowing power
The Federal Deposit Insurance Corp is seeking to more than triple its credit line with the U.S. Treasury Department to $100 billion, a move to give it more financial power to handle U.S. bank failures, the agency said on Monday.
The FDIC and Congress are working to boost the agency's current $30 billion borrowing power in legislation being crafted by U.S. Rep. Barney Frank, chairman of the House Financial Services Committee.
link
What? This FDIC needs to TRIPLE it's credit line with the Treasury? Why? Sheila Bair just told us in November the FDIC was fully funded to handle the banking meltdown.
Then later in the day, I read this:
Bank shares fall on nationalization worries
Bank of America Corp's (BAC.N) shares fell 8.5 percent to $5.49, while Citigroup Inc (C.N) fell 3.3 percent to $3.53. The broad KBW Banks index .BKX was down by about 4 percent at midday.
"Investors are betting on a nationalization of Citi and BofA, which will force their stocks down to zero or close to zero," said Tom Sowanick, the chief investment officer for $22 billion in assets at Clearbrook Financial LLC, in Princeton, New Jersey.
link
Are these 2 stories somehow correlated?
Here's what we know:
1, Due to all the "synthetic derivatives" in the banking system trillions (possibly quadrillions) of dollars suddenly evaporated in Q4 2008.
Ilargi explains it very well over at The Automatic Earth. Wall St is holding a handful of lost bets and are asking the American taxpayer to float then losses. The money is gone! No matter how much we throw at TARP, no matter how much the Treasury feeds them, the money is gone- it never existed.
- Yesterday
In a sobering appraisal of the nation's banking system, President Barack Obama signaled Monday that he will need more money to bail out the battered financial industry. Even so, he said, "some banks won't make it."
- Geithner
With its new plan, the administration is "going to do our best" to apply the Japanese lesson, Mr. Geithner said.
Still, he noted, pain is inevitable. "Japan had a huge bubble beforehand," he said. "And it was going to be a wrenching, protracted adjustment process no matter what."
The signs are pointing to something. Is it possible that "something" is the nationalization of one of the giant banks is right around the corner?