Summary: Which do you care to believe? The claims that there are no liquidity problems, or Bank of America, which is trading down more than 6% today and has credit protection blowing wide. Remember in 2008 that we were told that both Bear Stearns and Lehman were just fine, right up until they blew up. In the latter case we have a forensic report on the bankruptcy that discloses the fact that Citibank, along with many others (including with essential certainty the NY Fed) knew full well the company had no valid collateral for repos for quite a long time before they blew up. They said nothing, but you can bet those who knew traded on it. Is it happening again? We'll explore not just here but the same implications in Europe - and what, politically, must be done right now.
