Bank Capital Insufficient, Annihilistic Deleveraging and Sell offs

If Pimco is correct to say that US bank capital is insufficient, then we will see a lot more sell offs in the stock and bond markets. That's why I said at the beginning leveraging was evil and now the deleveraging is hellish! The less capital the banks have, the more would be the sell offs in the markets. Yes, the shortfall must come from somewhere and if you can't sell to get capital to hang on, you will fail! There is no question of gain or loss, no question about the value of the assets and the price for sale! Sell and get the money to keep your head above water is the only thing in your mind.

That is why I can't buy low at this stage! Stock prices have become very attractive and in normal times, I would jump to them! But the poor sad story is that the markets are still undergoing a process of "annihilistic deleveraging" caught by the Bear Flu released by Wall Street! The markets are sick so sick that no vaccines, no medicines and no painkiller can soothe them. I pray to see the end of this process but it won't come until...

No, it won't come until the banks have sold all their assets? Well, at least not until there is nothing to sell or no buyer in the market. But there must be buyers when the price falls to zero? Not until the sellers can't sell and when will this happen? My answer when the sellers are frozen by winding-up or other similar actions and can't dispose of their assets or when the sellers have sold enough to fund their capital. What is the quicker passage? My answer let the banks fail or freeze all the assets, preserve their value from being destroyed by the "annihilation" of the deleveraging process.

But is there an easier solution? The Fed can print more money and inject capitals into the banks. That is what they have been doing and why not continue to do it? I mean inject capitals into the banks not loans. The US government can nationalize or privatize (whatever label you use) those problematic banks and then sell them out to the public investors later. We have one crisis coming after another and isn't this the time for such drastic actions????

What are you talking about? We have been crying because of the evil inflation and asset bubbles coming from printing paper money. Can you think of some other ways?

Well, we can think about it; sure we are thinking... But in the meantime, the unending annihilistic deleveraging must go on. This is the new party of the 21st century!