Recipe for Banks in Trouble

1. Extract cr@p assets - in the process of being done under TARP etc
2. Recap (Temasek, HM Govt, Buffett, MUFG, US Treasury... wherever, whoever) - on the way
3. Force inflation on the economy - coming next, hence steepening, below:



That's basically it.

===========

From William Pesek of Bloomberg on the "United Socialist States of America" on Sept 22nd:

First, here's a memo that the U.S. Treasury team, of which the New York Federal Reserve president was a member, might have written a decade ago.

To: Asian Finance Officials

From: U.S. Treasury

Subject: Worsening Regional Crisis

As economies reel amid instability and as investors flee, it's important that Asian policy makers heed this 10-point plan:

1. Raise interest rates to support currencies;
   
2. Cut government spending and debt;
   
3. Don't blame speculators and hedge funds;
   
4. Let property prices slide. It's a correction, not a crash;
   
5. Don't save those who made bad decisions. Moral hazard is bad;
   
6. Increase transparency in the corporate sector;
   
7. Subsidies of any kind are always and everywhere bad;
   
8. Get banks to write down bad loans immediately;
   
9. Avoid blaming the media for your problems;
   
10. Follow the free-market policies that drive U.S. prosperity.

Now for the message emanating from the U.S. Treasury these days:

1. Disregard all of the above.

Classic.

(And then there's this one from Sept 19th - "Back in the US... Back in the US...")
.
::