Today we have seen the Anglo Irish Bank become nationalised.
Barclays has lost near 25 % in the last hour of trading on the London stock market.
In the USA ;
""....in the case of Citigroup, the losses have become so large that they make it almost mathematically impossible for the government to inject enough capital without taking a majority stake or at least squeezing out existing shareholders."
http://www.iht.com/articles/2009/01/16/business/16banking.php
Similar problematic situations are arising in the German and Spanish banking sectors.

The other British Banks are also looking for more funds to help them ride the next wave in the downturn.
Where are these new funds going to come from?

In the case of Barclays they wont get much from their shareholders after they way the majority of them were let down over the last time an injection of capital was required and was given preference to new investors.

looks like it will be the good old, never let you down, reliable tax payer yet again. If this is to be the way forward then nothing but full nationalisation has to be the outcome.
However there is still very little being said about the amount of debt involved in the toxic debt.
Figures on the amount vary from $56 trillion to near 10 times that amount $576 trillion. Absolute mind blowing amounts of any thing let alone money.
Who is going to be the first to open Pandora's box and see whats inside?
Maybe its the UK government. Hints have been dropped that Darling is considering introducing a "Bad Bank" to buy up all the toxic debt in British Banks.
Someone better nip over to Heidleberg and pick up some machines before there all sold.

Nilsey105,

What you write is interesting, thanks.

The entire financial system seem to be in state of flux. As we move from one era into another. An era of very tight credit and overall scarcity, at least compared to profligacy and rampant consumerism finnaced by debt. I see the economy shrinking back to where it should have been minus the stimulus of the credit bubble. If this happens it's going to have profound implications for the UK, as Britain's manufacturing base is so small, having been replaced by the shiny 'new economy.'

Another fundamental and 'structural' problem with the whole philosophy behind these massive stimulus packages is their collosal inflationary potential. OK one can argue that what we're seeing now is prices falling and deflation so we don't have to worry about inflation, what we're trying to do is stop everything grinding to a halt, once we get the economy moving again that'll be the time to worry about inflation. Only we could have the worst of both worlds. Inflation and deflation at the same time, what some people call stagflation.

The American economy is arguably in almost as bad a state as the UK's. They are going to have to borrow massively to finance these enormous stimulus packages, which at present, supposedly ammount to almost a 1000 billion dollars. Some people think another 1000 billion on top is necessary. That's an awful lot of borrowing, or they could just print the money!

But this level of borrowing is bound to have an impact on the value of the dollar and US treasury bonds. Will the rest of the world keep financing US debt at these unsustainable levels, especially when it appears that they will never really be able to pay back their debts, not without restructuring the US economy?

The dollars is going to come under enormous strain as the debt mountain expands like dough, yet another credit bubble growing and growing. With the dollar losing its value why would anyone lend to them?

I think Britain's on the route towards national insolvancy, the banks are going to drag us all down with them, especially if we keep pouring billions, moving close to trillions into a bottomless debthole. Soon borrowing will become impossible and then the government will simply begin to print money. Only this will undermine confidence in Sterling and the economy and only make things worse, a spiralling, vortex of collapsing confidence and vast losses. This is the terrible and ghastly climax of Thatcherism, the virtual destruction and ruin of the British economy.

OMG CJ
how could you have such thoughts at a time like this. LMAO.
Oh VALIUM your after and not the VIAGRA lol

Nilsey105, this is possible, but RBS (and others) pay the treasury a huge wack, but then again, "austerity and social change" are important cornerstones when large constructs like this financial crisis, are played out.

It is hard to workout which way things will swing, but the election of Obama indicates a move to the right. Blair was supposed to offer "hope" (LOL) after the Thatcher construct, but Blair was more rightwing than even Thatcher could ever dare, so Obama will likely make things much tougher for Amerikans.

Here in the UK, Brown and his NWO handlers have shown no "goodwill" towards the tax paying public. Only a minor delay with the super-carriers, Trident hasn`t been cut (US benefits) and pointless...utterly USELESS ID CARDS...all this with the MSM openly crying "bankruptcy".LOL

BTW, NR needs a sack of cash if its going to play a significant role...maybe there should be a Southern Rock?LOL