Return of the Zombie Banks
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Return of the Zombie Banks
They're too big to FAIL
What is a "Zombie Bank?"
Term comes from Japan's lost decade (1990's) banks were kept "alive" after their real estate bubble collapsed. A zombie bank is a term for a financial institution whose liabilities (debt) outweights it assets = has a net worth less than zero....
In other words - they are broke!!!!
Life Support
They can be kept artifically alive by: A) Eating out of the taxpayers wallets, see "bailouts".B) Government guarantees.C) All of the above!
TWO OF THE BIGGEST
US ZOMBIE BANKS:
CITIGROUP
How much is too much? $$$
EACH of these two banks received 45 B in bailout monies:
$45,000,000,000.00!
Our government is guaranteeing up to 90% of
these zombie bank's bad debt
Zombie Bank of America
$306 B in bad debt
Zombie Citigroup
$250 B in bad debt
That is more than either of these banks are worth!!!
Why should YOU care?
A portion of the money you earn is going to fund these
failed institutions.
Institutions that will in turn be very reluctant to lend you money as a newcomer to credit...
...even though they used your $$$ to help prop them up?
What do You think should be done to zombie banks?
A) Knock them in the head... let them fail!
B) Continue to feed off taxpayers.
C) You really do not care - it doesn't matter to you.
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