My apologies to The Bard.
But really, all this stuff about AIG bonuses, whether or not bank executives deserve they pay the get and all those other issues is just window dressing. What we really want to know is: Are the nation’s largest banks insolvent (out of money) or are they illiquid (just waiting for their asset values to go back up)?
Here’s the scenario: 80% of the nation’s assets are housed in our 20 largest banks. All of those banks had either directly invested in mortgage-backed securities (either the regular kind or the kind heavily sprinkled with sub-prime mortgages) or have invested in funds that dealt in mortgage-backed securities.