U.S. regulators directed five of the country's biggest banks, including Bank of America and Goldman Sachs, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.This is all nutty propaganda that has nothing to do with a view by government that a crash is imminent (This is about a 2010 document). The report goes on to say:
According to documents obtained by Reuters, the Federal Reserve and the U.S. Office of the Comptroller of the Currency first directed five banks — which also include Citigroup, Morgan Stanley and JPMorgan Chase — to come up with these "recovery plans" in May 2010.
They told banks to consider drastic efforts to prevent failure in times of distress, including selling off businesses, finding other funding sources if regular borrowing markets shut them out, and reducing risk. The plans must be feasible to execute within three to six months, and banks were to "make no assumption of extraordinary support from the public sector," according to the documents.Does the Fed and Comptroller not have any clue as to what happen during the 2008 financial crisis? Most other funding resources were shutdown, and there was no market for even selling bank T-shirts, never mind selling off entire bank businesses.
The 2008 collapse occurred because the Fed stop supporting the former financial and economic structure. If the Fed stops again, the collapse will occur again and continue until prior malinvestments are liquidated or the Fed starts printing again, but there is no way, given the current fractional reserve system, that banks coul prop themselves up via a liquidation of assets during a crisis period that would result in nosediving prices of capital goods. It's either liquidation at pennies on the dollar or Fed money printing.
These "plans" to prevent collapse ignore the fundamentals of the business cycle and have no chance of working in a crisis.
As for the current situation, Fed money printing continues extraordinarily slow at roughly a 2.3% annualized rate over the last 13 weeks based on nsa M2 money supply. If this continues, an economic and stock market crash could occur in the not too distant future---certainly before the election. Be prepared.