Biggest Banks Face Moody’s Cuts as U.S. Support Ebbs

The media and Obama are telling us the economy is recovering, jobs are being created, stock markets are at all-time highs, real estate is recovering, and the banking system is recapitalized.

Not so fast--even Obama-apologist Bloomberg News is revealing things are not so rosy with the banking system.  The economic cheerleaders will be proven wrong--again.

http://www.bloomberg.com/news/print/2013-08-22/moody-s-mulls-downgrade-of-biggest-banks-as-u-s-support-wanes.html

The Federal Deposit Insurance Corp.’s favored approach for winding down banks in a crisis, known as single-point-of-entry, may lead to higher recoveries for bondholders by keeping operating units open, Fanger said. Firms may be required to hold a minimum amount of debt, which also could help recoveries because losses would be spread among more investors, he said.

There would be “more bondholders to share the burden,” Fanger said.

"Losses spread among more investors" is code-speak for depositors will also take a haircut.