(To Mish's salient observation I can only add commentary made by Citizen Harrison a few weeks back: they sold the car crash and bought the cancer, but the cancer is bigger than the patient. - AM)
From Citizen Mish
from 07-23-2008 -
Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.
Note: The H8 Report (federalreserve.gov/releases/h8/current)for the week ending November 12, Assets and Liabilities of Commercial Banks in the United States not seasonally adjusted, page 2, shows 7.141 trillion in deposits and cash assets of $873.1 billion. Cash on hand started soaring in October along with the TARP bailout plan and other swap options.