Is There a Financial System Left To Speak Of?

December 21, 2007 (LPAC)--In case you need more evidence that the financial system is, in fact, already disintegrated, let this be another warning to you.

Yesterday, the nation's largest bond insurer (a "monoline" as they are called), MBIA, has been put on a "negative ratings watch," by Fitch Ratings Service. In total, Fitch has placed "173,022 bond issues (172,860 municipal, 162 non-municipal) insured by MBIA on Rating Watch Negative,"according to Warren Buffet's Berkshire Hathaway news service, Business Wire.

As one "market analyst," Karl Denninger, recently noted on his blog, "I'm sure you've heard that Goldman has 'hedged' off their risk, and this is why they made so much money while the other folks in the room lost. What you didn't probably understand is that so far this is all accounting fiction - nobody has actually given anyone any money on those hedges.

"But now, those hedges are worthless.[ed- They always were.] The risk, which was believed to have been laid off, was not really laid off. These companies [read: MBIA] never had a prayer in hell of actually performing on their obligations. Never."

Despite what the mass-media financial press would have you believe, this is no "credit crisis." The entire system is insolvent, period.