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Now, if an instition were Solvent - i.e. able to pick itself up by the bootstraps - then why would it need the Treasury to pick it up. This is no different than the Credit Crisis of last year, and now we are going to see a complete unraveling of the Banking instition, down to the very core -- the depositors.

We then see that Loan losses totaled $66.9 billion, which is roughly what I predicted they would be about a week ago. Net interest margins rose, but let's take a look at why. A net interest margin is basically the yield from a loan (the interest) less the expenses. For a toxic asset, the expenses are quite high, so your net interest margin would be a negative number. However, in an ideal world, you would want to have a pretty high net interest margin on each loan. The reason this number is going up is because the banks that ARE lending are making more money because the Fed is giving out money for next to nothing (0.5%). So of course they are making more money, as they were already making money at higher rates.

The worst news in my opinion is this: At the end of June, there were 416 insured institutions on the "Problem List," up from 305 on March 31. Ladies and gentlement, this is the mother of all bad news because we are already unable to prop up the failed banks that have failed thus far, how would we handle another 416? The news isn't great, and despite all of their rhetoric to try and instill confidence in the FDIC, I have not been fooled.