Many years ago, when Dad and I used to look at official data and analysis, we knew they were flawed. So we developed our own. That’s how we figured out that the capital of savings and loans was grossly overstated and that thousands of S&Ls were headed for a massive bust. Our awareness of the flaws was also a key factor in helping us warn consumers prior to the failures of giant insurance companies during the 1990s. (See the review of our work by U.S. Government Accountability Office GAO.) It was critical to helping us warn you of nearly every major financial failure in the debt crisis that began more than two years ago. (See my blog for our forecast track record.) Plus, it’s one of the main ...

The time has come to issue one of my sternest warnings to date: Bank of America and Citigroup could fail despite the most radical government rescues of all time.

Right now, after recent close calls with instant death, these two megabanks are on life support, receiving massive transfusions of government capital. But they’re still hemorrhaging, and no one in Washington has found a cure.

Already, they have received capital injections of $90 billion ($45 billion each).

Already, this bailout is larger than the total combined capital of PNC Bank, Suntrust Bank and State Street Bank — all among America’s ten largest.

Yet, ironically, that $90 billion is still a drop in the ocean compared to their massive exposure to risky assets.

The shocking facts revealed in the banks’ own balance …

Last week, the U.S. Congress finally passed an unprecedented financial bailout package aimed at thawing out frozen credit markets, but the market's response was telling — the Dow Jones Industrial Average plunged 474 points from peak to close on Friday. Not exactly a vote of confidence. The start to this week showed no improvement either, as investors woke up to another Black Monday. Stocks plunged in a global stock market rout, with the Dow down over 800 points at its low. The problem? Washington's plan may be too little too late! The U.S. economy is probably mired in recession ALREADY, and Wall Street's NIGHTMARE is already spilling over to Main Street America. The unprecedented volatility we're seeing in financial markets is like nothing ever experienced before. Triple-digit swings in the Dow have become common! ...