20 slides with comments on zombie banks

1. Return of the Zombie Banks

2. They're too big to
FAIL

3. 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....

4. In other words - they are broke!!!!

5. 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!

6. TWO OF THE BIGGEST
US ZOMBIE BANKS:

7. CITIGROUP

9. How much is too much? $$$
EACH of these two
banks received 45 B
in bailout monies:
$45,000,000,000.00!

10. Our government is
guaranteeing up to 90% of
these zombie bank's bad debt

11. Zombie
Bank of America
$306 B in bad debt

12. Zombie
Citigroup
$250 B in bad debt

13. That is more than either of
these banks are worth!!!

14. Why should YOU care?

15. A portion of the money you
earn is going to fund these
failed institutions.

16. Institutions that will in turn be very
reluctant to lend you money as a newcomer
to credit...

17. ...even though they used your $$$
to help prop them up?

18. What do You think should
be done to zombie banks?
A) Knock them in the head...
let them fail!

19. B) Continue to feed off taxpayers.

20. C) You really do not care -
it doesn't matter to you.