Can Federal Reserve halt the decline of the solvency of Merrill Lynch – that will determine the depth of depression in 2010?
Marla Guthrie
Jul. 18, 2008

The financial solvency of Merrill Lynch is in big question. The larger-than-expected writedowns of $9.4bn shocked and rocked the markett. Rumors on the street say there comes the run on the Titanic. Can that really happen?

The financial catastrophe right now is accelearating and will not stop till a big bank faces run. That is where the will and power of the Federal Reserve Bank and US Treaury will be tested.

Merrill today waited until after the market closed to report a $4.6bn loss in the second quarter and announce asset sales aimed at raising $8bn in much-needed capital.

That showed the trouble in the horizon.

If the Titanic falls in 2010, can Federal Reserve rescue it with fopur hundred buillion dollars. Federal Reserve has access to close to trillion dollar give or take two hundred billion. FDIC can support three large bank runs. Beyiond that things are in unchartered zone.

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