Financial System Riskier, Next Bailout Will Be Costlier, S&P Says

Right now, half of the entire world's GNP (thirty Trillion) changes hands weekly in terms of financial instrument­s (those doggone "chips, again) of elusive design and value, virtually non-existe­nt foundation­, and guarantees so leveraged that if all were "called" the game of musical chairs would be over; there would be no one to pay off the chips, no "chair" to rest on.

Who's left without a seat? In today's case of chip-drive­n trading, arbitrary valuations­, and twenty, thirty, even fifty-to-o­ne leverage on investor deposits and borrowed funds, there truly is no place, no cashier, no teller who will honor your "chips" if some event causes trading to freeze up yet again, as it did in 2008.

The U.S. government has given banks literally Billions of dollars in "free" profits in the last two years by allowing them to borrow from the government at say 1/4-1/2 of one percent, and use the borrowed funds to buy Treasury Bonds at say 2-4% and "bank" the difference as profits, in the hopes that banks would use to profits to offset their losses in mortgages and financial "chips."

They mostly haven't, and now are back on the paying dividends track to reward their equity owners, even though they have yet to clean up their balance sheets to any degree.

Worse, they are still trading up to thirty Trillion (that's Trillions with a big "T" folks!) of financial derivative­s (those pesky chips again) EVERY WEEK!
Read the Article at HuffingtonPost