The US banking sector is not healthy.

[Hawkowl]

"There is a fundamental misunderstanding about the Wall Street bailouts amongst the public, and quite a few policy makers at Treasury and the Federal Reserve: Somehow, they “fixed” the banking system. All it took was few trillion dollars in liquidity and a few $100 billion dollars in recapitalization, and all is now fine (I suspect some people at the Fed know the Truth).

"In fact, they did nothing of the sort. The banking system was not saved; The massive injection of liquidity temporarily salved the day-to-day operations of banks, but they did not repair what ailed our financial institutions. Indeed, pouring billions into nearly identical management teams that mismanaged the risk, over-leveraged exposure, and drove banks off the cliff in the first place was an invitation for another crisis.

...Temporary nationalization is the play: Uncle Sam provides debtor-in-possession financing to keep operating. All of the bad holdings, mortgages, derivatives and other liabilities are pulled out, and auctioned off. This includes the REOs, the CDS/CDO book, defaulted mortgage obligations. Remember, there is no such thing as toxic assets, only toxic prices. At some valuation, these are worthwhile investments — just not 100 cents on the dollar. Let healthy buyers pay 15-30 cents.And anything that is worthless is written down to zero."

http://www.ritholtz.com/blog/2011/08/big-banks-under-capitalized-overexposed-opaque/

[truedelphi]

1. When you have a system that wracked up a Quadrillion bucks worth of

Gambling debts, and some of those debts were "insured" by institutions that would be broke were the entire bill to all come at once, why what can be done?

Iceland seemed to understand that the answer is to let those who screwed the pooch pay the piper.
But Iceland is still a democracy, and the US is only a banana republic (Without the bananas.)

Since Mr Obama and indeed 95% of those who hold elected office appear to be under the command of Mr Geithner and Mr Bernanke, and they (for whatever reasons) all agree that they MUST BAILOUT any of the larger failing insitutions, it might have to be pitchfork and/or guillotine time. Or perhaps peaceful resistance time. Or something.

But to continue on with what is going on is madness.

That is: If We the People plan on continuing to be living in homes, having utilities, and cntinuing with our day to day lives.

If we don't come up with some plan to take back control of our world, a plan that will quit allowing the Oligarchy to destroy our world, then we ourselves as well as our children are going to become like the Haitian people and live all District Nine-ish in flimsy tents that barely would hold the belongings we'd take on a camping trip.

[dixiegrrrrl]

2. District Nine indeed.

Hope a lot of DU folks saw that film.

And, as you say so clearly, madness to continue, yet there seems to be no other plan in mind for the banks but to continue as financial vampires.

[Yavin4]

5. When All of Your Friends and Associates Are Bankers Then It's Not a Bailout.

You're just helping your friends in their time of need. Bernake, Geithner, Summers, et al. don't have any friends that are truly poor and suffering.

[DCKit]

3. Not healthy, but they're still paying the salaries and taking multi-million $$$$ bonuses.

Insane.

[bemildred]

4. I hope they die, all the megabanks, the sooner the better. nt

[Raster]

6. Unfortunately their death throes will affect all of us....

...and we've allowed that to happen.

[bemildred]

7. Their life has affected us plenty too. nt