Lyndon Larouche 22 Luglio 2008

July 20, 2008 (LPAC) - Did the U.S. banking system nearly collapse last week? On Monday, July 14, spurred by an open run by depositors to pull their funds out of the failed (reopened by the FDIC) IndyMac Bank, the banking crisis was once again in the headlines. During the day, bank stocks plunged as shareholders rushed to sell, and there were indications that the runs were not limited to IndyMac. Two banks, Washington Mutual and National City, took the unusual step of issuing press releases saying they were okay. WaMu, a $320 billion thrift based in Seattle, issued a statement saying it had "excess liquidity" and that it "exceeds all regulatory 'well-capitalized' minimums for depository institutions. National City, based in Cleveland and with $155 billion is the twelfth-largest bank holding company in the nation, said it was "experiencing no unusual depositor or creditor activity" and touted its own capital levels.

The next day, the SEC issued an emergency decree that blocked "naked" short selling in the securities of Fannie Mae, Freddie Mac and 17 other major financial institutions, including Citigroup, J.P. Morgan Chase, Bank of America, Merrill Lynch, Lehman Brothers, Morgan Stanley, and Goldman Sucks. Such activity "threatens the stability of financial institutions. As a result of this and what appears to have been a major intervention by the Plunge Protection Team and the Fed, U.S. bank stocks had their best day in 16 years.

Reports flowing into LaRouchePAC indicate that there is a high degree of nervousness in the population and among bank employees, over the state of the banking system, with fears that such anxiety could easily turn into panic. It is becoming increasingly obvious to citizens that the situation is rapidly deteriorating, and the assurances of the bankers and the regulators ring more hollow by the day. It would take very little for the situation to turn into a full-fledged banking panic.

Source >  Lyndon Larouche