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.

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

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

Douglas Rushkoff – It’s not the technology’s fault

It's up to us humans to re-humanize our world. An economy that prioritizes growth and profits over humanity has led to digital platforms that "strip the topsoil" of human behavior, whole industries, and the planet, giving less and less back. And only we can save us.

Think Again Podcasts
  • It's an all-hands-on-deck moment in the arc of civilization.
  • Everyone has a choice: Do you want to try to earn enough money to insulate yourself from the world you're creating— or do you want to make the world a place you don't have to insulate yourself from?
Keep reading Show less

Can the keto diet help treat depression? Here’s what the science says so far

A growing body of research shows promising signs that the keto diet might be able to improve mental health.

Photo: Public Domain
Mind & Brain
  • The keto diet is known to be an effective tool for weight loss, however its effects on mental health remain largely unclear.
  • Recent studies suggests that the keto diet might be an effective tool for treating depression, and clearing up so-called "brain fog," though scientists caution more research is necessary before it can be recommended as a treatment.
  • Any experiments with the keto diet are best done in conjunction with a doctor, considering some people face problems when transitioning to the low-carb diet.
Keep reading Show less

Why 'upgrading' humanity is a transhumanist myth

Upload your mind? Here's a reality check on the Singularity.

  • Though computer engineers claim to know what human consciousness is, many neuroscientists say that we're nowhere close to understanding what it is, or its source.
  • Scientists are currently trying to upload human minds to silicon chips, or re-create consciousness with algorithms, but this may be hubristic because we still know so little about what it means to be human.
  • Is transhumanism a journey forward or an escape from reality?
Keep reading Show less