Dexia: ONE BANK In Need of a $238.9 Billion Infusion

The European banking system is in worse condition than America's banks were in 2008 or are now. Dexia is single bank needing a $238.9 billion infusion.

Dexia: ONE BANK In Need of a $238.9 Billion Infusion

The news today: Dexia (described as in a state of "gripping liquidity strains"; otherwise "insolvent" might be the appropriate adjective), has a plan to sell to the French and Belgian taxpayers $238.9 billion of bad assets "that can't be sold under current market conditions." It is said that during the last 15 years Dexia "over-expanded its book of speculative assets and is exposed to Greece..."

We have come a long way from the spring of 2008 when the American Administration declared $30 billion would bail out the entire U.S. banking system. America reached out generously and temporarily "saved" the banking system with a commitment of more than $12 trillion. The American banking system is once again knocking on the door of the disabled. If the major banks were required to mark their bad assets to market and account for their legal liabilities it is unlikely any of them would stand.

Today, the European banking system is in worse condition than America's banks were in 2008 or are now. Dexia is ONE BANK, needing a $238.9 billion infusion. There are at least twenty more European banks who will need similar or greater infusions and many more who may survive on less.

The American taxpayer was duped and mulct to little avail. The nominal derivatives positions of the "saved" banks are larger than ever before. Morgan Stanley and Bank of America seem to be the obvious early candidates for difficulty. Both are leaders in size of derivatives ownership. We not only have the risk of European banking and Sovereign counterparts but also that of our "saved" American banks.

We doubt the Euro zone governments and taxpayers, especially the strong member states, will acquiesce to donations to the banks as happened here. It is also unlikely that the Tea Party, Democratic Party or the administration will fully step in to save the American banking shareholder and bondholder again.

We think this time the "saving" will be concentrated on the depositor and on the system rather than on the owners and the management. This is hopeful as a system could evolve that provides real banking again, the gathering of funds and responsibly lending out those funds. The hedge fund behavior of the banks would re-emerge where it belongs - in the hands and risk of hedge fund investors, not depositors nor taxpayers.

That it will take another banking crisis, this time worldwide, to bring the system in line and functioning within proper constraints is sad; but there could be light at the end of the tunnel if, this time, the crisis is handled with fairness and caution.

Even our paralyzed government will not use taxpayer money to buy a third crisis.

Dexia (ONE BANK): $238.9 billion. 

For archival information visit or write to

Massive 'Darth Vader' isopod found lurking in the Indian Ocean

The father of all giant sea bugs was recently discovered off the coast of Java.

A close up of Bathynomus raksasa

SJADE 2018
Surprising Science
  • A new species of isopod with a resemblance to a certain Sith lord was just discovered.
  • It is the first known giant isopod from the Indian Ocean.
  • The finding extends the list of giant isopods even further.
Keep reading Show less

Is it ethical to pay people to get vaccinated?

It could lead to a massive uptake in those previously hesitant.

Ian Forsyth/Getty Images

A financial shot in the arm could be just what is needed for Americans unsure about vaccination.

Keep reading Show less

Every 27.5 million years, the Earth’s heart beats catastrophically

Geologists discover a rhythm to major geologic events.

Credit: desertsolitaire/Adobe Stock
Surprising Science
  • It appears that Earth has a geologic "pulse," with clusters of major events occurring every 27.5 million years.
  • Working with the most accurate dating methods available, the authors of the study constructed a new history of the last 260 million years.
  • Exactly why these cycles occur remains unknown, but there are some interesting theories.
Keep reading Show less
Surprising Science

Galactic wind from early universe detected

Researchers discovered a galactic wind from a supermassive black hole that sheds light on the evolution of galaxies.